Bernard Durkan (Kildare North, Fine Gael)
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177. To ask the Minister for Enterprise, Trade and Employment the extent to which Brexit continues to have a negative or positive effect in this jurisdiction; and if he will make a statement on the matter. [19111/22]

Robert Troy (Longford-Westmeath, Fianna Fail)
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Since the Trade and Cooperation Agreement (TCA) came into effect in January last year, businesses have felt the realities of the UK’s decision to leave the EU. In large measure, Brexit was not the calamitous event that we all feared. Businesses have navigated their way steadily through the new trading relationship which includes increased administrative burdens and non-tariff barriers. It is a tribute to the determination and resilience of the business community that so many have made it through these unchartered waters, adapting their business models and supply chains, allowing them to continue to trade and support the economy.

Despite the challenges posed by the COVID-19 pandemic and Brexit, our export-led trading sector has proven to be very resilient. 2021 was a record-breaking year for Irish goods exports – rising to €165 billion, the highest level on record, and over €3bn higher than previous year. While last year imports from Great Britain declined, our exports to Great Britain performed very strongly - up over €2billion. The introduction of further checks and controls for trade to Great Britain can be expected to have an impact in due course on these exports as the UK only postponed these checks and controls to allow technical discussions on the Protocol on Ireland and Northern Ireland to continue on finding durable and realistic solutions. I have no doubt that Irish businesses can prove their resilience once again and my Department, and colleagues across all Government Departments, will continue to help companies diversify and discover new markets and reap the benefits of free trade agreements and work with them to adapt to new realities, both in relation to Brexit but also COVID.

We have also seen a significant pick-up in trade between Ireland and Northern Ireland. It is clear that some readjusting of supply chains is taking place, to be expected in the context of Brexit. As an open, trading economy, the continued growth of our export businesses and diversification in our trading partners is an important driver for jobs and growth - both in Ireland and with our trading partners.

While recognising the importance of our current markets, our focus is on deepening our reach into these markets while also opening up new trade markets between Ireland and the rest of the world. My department is working intensively with its enterprise agencies to help companies to diversify and discover new markets and to adapt to export challenges posed by both COVID-19 and Brexit.

With regard to foreign direct investment, IDA has approved over 100 Brexit related investments since the Brexit referendum in 2016 with an associated job creation potential of over 6,500. IDA’s 2021-24 strategy, Driving Recovery and Sustainable Growth, positions the Agency to leverage FDI opportunities arising from Brexit. The Agency seeks to capitalise on the expansion potential from new-name Brexit investments secured since 2016 as these companies build out their Irish operations.

Financial Services continues to account for approximately two-thirds of the investments approved by IDA to date, driven by the end of passporting from the UK across the EU, in addition to Ireland’s existing strengths as a location for financial services firms. The December 2021 EY Brexit Tracker continued to show Dublin as the top destination for Brexit related investments from financial services firms, based on projects; Dublin ranks third, based on jobs.

Given that the UK is no longer part of the EU Single Market or Customs Union, inevitably our trade with our nearest neighbour, and biggest trading partner, is not now as frictionless as it had been before. The TCA outlines the conditions under which UK goods can benefit from the zero-tariff rate when imported into Ireland or elsewhere in the Union. The conditions stipulate those technical issues such as preferential “Rules of Origin” now need to be considered. It has brought new challenges for products that incorporate an all-island approach to its production.

The UK postponed import checks on goods from Ireland due to come into effect from 1 January 2022. For this reason, the full impact of our new trading relationship with the UK has not truly been felt yet as full customs controls are not yet in place. This temporary reprieve for goods from Ireland allows for the ongoing technical discussions between the EU and the UK on the Protocol on Ireland and Northern Ireland. These discussions continue and are focused on finding durable and realistic solutions under the Protocol to difficulties that present for businesses and citizens in Northern Ireland. The further introduction of checks and controls for trade with Great Britain can be expected to have an impact in due course on our exports but I have no doubt that Irish businesses can prove their resilience once again and my department, and colleagues across all Government Departments, will continue to help companies diversify and discover new markets and reap the benefits of free trade agreements and work with them to adapt to new realities, both in relation to Brexit but also COVID.

Businesses were actively assisted in their Brexit preparedness by Government in terms of advance Brexit contingency planning, involving a range of State Agencies and Bodies, providing a broad range of support for businesses and traders throughout. Government continues to stand ready to assist with these and other challenges associated with Brexit with the continued availability of supports as businesses continue to adapt to post-Brexit realities.