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Minister Creed's opening speech at UCD/Matheson Brexit Seminar, UCD, 04 October 2018

Theme: “Cultivating new opportunities: the agri-food and beverages perspective on Brexit and China”

Good morning Ladies and Gentlemen. I thank Imelda and Tim for your kind invitation and welcome.

I am delighted to be here with you this morning to speak on the topic of cultivating new market opportunities in China for the agri food and beverages sector, particularly in a post-Brexit environment.

There is no doubt that Brexit is a reality that will touch every industry across Ireland, but it is of particular significance for the agri-food sector given the importance of the UK market for Irish agri-food exports.

I would therefore like to commend UCD and Matheson for facilitating this important conversation, and for their efforts in supporting the development of the Irish Agri- food sector.

However, before dwelling specifically on Brexit I would also like to say a few words about the Irish agri-food sector and its growing links with China.

The agri-food sector is an extremely important contributor to Ireland’s national economy. It is heavily export-oriented. Total Irish agri-food exports came to almost €13.6 billion in 2017, representing just over 11% of total Irish goods exported.

We boast some of the best agri-food products and brands in the world, and we export those products to 180 countries. Brexit, of course, presents a unique challenge in that context, but it also reminds us of the need to continually strive to develop new markets and to grow existing ones.

In recent years much of our attention in terms of market diversification has been on Asia - where we have seen the value of exports nearly quadruple since 2009 - and particularly in China.

Indeed, an intensified focus on market diversification is a central component of the suite of measures deployed by myself and my Government colleagues in response to Brexit. I therefore look forward to seeing the results of this seminar, which I believe will help to inform future policy conversations.

Going forward, I will continue to apply the most up-to-date market analysis provided by agencies such as Bord Bia when prioritising my Department’s activities in relation to market development, much of which points to ‘emerging markets’.

Exports to these markets in Asia, Africa, the Middle East and Central/South America account for over 20% of total agri-food exports.  

This growth has been led by Asia, with exports of €1.6 billion in 2017, €1b of which went to China.  We particularly value this relationship with China and wish to develop it further.

I have engaged in an extensive programme of Trade Missions in recent years, to these emerging markets, with China featuring most prominently as a destination favoured by our industry.

In May 2018, I led a trade mission to China during which I had productive meetings with the Minister for Agriculture and Rural Affairs, Han Changfu, the Minister for Marketing Regulations, Zhang Mao and the Vice Minister for the General Administration of Customs, Zou Zhiwu.

This was my second visit to China in as many years. In Sept 2016 it was the destination for my first trade mission since being appointed as Agriculture Minister.

Indeed, I will be meeting with Minister Han Changfu here in Ireland next week who is coming at my invitation.  While he is here we will sign an action plan on co-operation between both countries from 2019 to 2021.  This continued partnership and collaboration  continues to strengthen the strong  economic ties between our counties.

Minister Doyle will travel to China at the beginning of November to attend the China International Import Expo (CIIE) in Shanghai. He will also then attend the large Seafood Expo in Qingdao.

Our agri-food exports to China have increased from around €200 million in 2010 to nearly €1 billion last year. This has been a truly remarkable achievement and underlines the importance of the Chinese market, which is now the third largest destination for Irelands agri-food exports.

All indications are that demand from China for agri products is likely to continue, with consumer demand for premium imported beef forecast to rise significantly.  This is driven by increasing urbanisation, higher disposable incomes and health awareness.  The import of frozen boneless beef into China, the category for which Ireland will have market access, has grown nine-fold within the last five years.

So this represents an enormous opportunity for Ireland to fulfil the prediction made by Premier Li when he said he was sure that Chinese consumers would welcome the opportunity to experience high quality Irish beef.

Now turning to Brexit.

There is no doubt that Brexit has caused the wider agri food sector, including my own Department and agencies, to sharpen and accelerate our efforts to reduce the sector’s exposure to the UK market.

As you are probably aware the Ireland/UK agri-food market is a very highly integrated market. This level of integrated trade is evidenced by the fact that

Ireland’s largest export destination for agri food and beverage products is the UK, with exports valued at approximately €5.2 billion in 2017; while Ireland is the UK’s largest export destination, valued at €4.1 billion. 

This trade is facilitated by, and takes place within, an orderly, friction-free agri-food trading system, underpinned by the EU’s Customs Union and Single Market of approximately 500 million of the most affluent consumers in the world.

The most immediate impact of Brexit on the sector has been the difficulties caused by the significant drop in the value of sterling against the euro. 

The possible longer term impacts relate to the potential need to conduct import controls on animals, plants, and products of animal and plant origin being imported on a daily basis from the UK, the certification of Irish agri-food exports to the UK, and the possibility of a hard Brexit resulting in the imposition of tariffs on trade.

The challenge has been to take effective steps to mitigate the immediate impacts and to intensify market diversification efforts to reduce our exposure to the UK market. These challenges are being addressed and will continue to be addressed through budgetary measures aimed at enhancing competitiveness and market diversification.

We have to accept that if the UK leaves the Single Market and the Customs Union, our trading relationship with the UK will not be the same, and that any final arrangement, outside of these structures, will involve friction and additional costs along the supply chain.

Therefore the best interests of the agri-food sectors in both countries lie in a trading arrangement post-Brexit that is as close as possible to that prevailing currently. That is what Ireland wants from the negotiations, and it is also what the EU wants.

Following months of negotiations, the priority now is to finally agree the conditions for withdrawal, including the text necessary to give legal expression to last December’s agreement that there would be no border on this island and that the Good Friday Agreement would be protected.

On the backstop, our position remains clear.  While our preference is for an overall EU-UK relationship that would resolve all issues, it remains essential that a backstop is agreed which provides certainty that a hard border will be avoided in any circumstances.

There is no doubt that we are now entering a critical stage of the negotiations. Recent weeks have been difficult, and there remains a considerable degree of uncertainty around the prospects for a Withdrawal Agreement, both in terms of the backstop and the political declaration on the future EU-UK relationship.

This uncertainty is magnified by the polar opposite views on Brexit, particularly on Prime Minister May’s Chequers proposals, being expressed by the different factions within the Conservative Party at their annual conference this week.

However there are some positive signs in that regular negotiations are continuing between Secretary of State Raab and Michel Barnier and it is also pleasing to see that Prime Minister May has confirmed, in Salzburg,  that she will bring forward further proposals on the backstop.

This needs to happen urgently if progress is to be made by October European Council – the date initially set by both sets of negotiators for conclusion of the Withdrawal Agreement and the Future Relationship Framework so that they can be referred to the European Parliament, Member State capitals and the UK Parliament for ratification before Exit Day of 30 March 2019.

Preparedness and contingency planning is well advanced both at Government level and within my own Department, with communications around preparedness being stepped up.

The Government has launched a new Getting Ireland Brexit Ready public awareness campaign, which will provide information on the latest preparedness and support measures being taken by Government.

My Department’s most immediate planning relates to the phased recruitment of staff for SPS and fisheries controls up to 2021, and the implementation of Phase One of the staffing project that is anticipated for 2019. The latter involves the recruitment of additional staff for SPS and fisheries controls, as agreed by Government on 18 September. The necessary arrangements to commence this recruitment process are currently being put in place.

We are also feeding intensively into the wider ongoing process around the infrastructural requirements at ports and airports, and will continue to liaise closely with the Office of Public Works, in particular, in this regard.  

Notwithstanding the current focus on preparation for this scenario, contingency planning for a disorderly Brexit in the event of the UK exiting on March 30th 2019 is continuing.

Ultimately, the objective is to bring about future trading arrangements that are as close as possible to those prevailing currently. This imperative will continue to inform the Government’s approach to Brexit.

Again, thank you for the opportunity to address you.