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Minister Creed's Speech at UCD Brexit Halfway there seminar, 28 March 2018

Good afternoon Ladies and Gentlemen.

I am delighted to be back here again in this famous Debating Chamber to talk to you about Brexit. I want to thank Professor Evans - whom I know very well - and his team for organising this very worthwhile opportunity for us all to take stock of where we are.

I know that among the student cohort here this afternoon we have many who are studying agriculture and agri-food, and I am sure many of you in years to come will be involved in directing policy in my Department. I wish all of the students here today well with your upcoming exams.

[As alluded to already] hopefully the events of recent weeks render the title of today’s event somewhat out of date, following last week’s agreement in principle on a transition period. As a result I hope we are only about one third of the way through to when the UK will leave the EU, but we will not really know that until the Withdrawal Agreement has been finally approved sometime in early 2019.

Before going any further I want to say that I was very interested to hear Dr Michael Wallace’s very informative take on how UK agriculture will progress post-Brexit.

Brexit – general

I think it is fair to say that very few policy, business or financial decisions will be made over the coming months and years that will not be affected by Brexit in some way, either directly or indirectly. For obvious reasons, my concerns revolve around the agri-food and fisheries sectors, where it is universally accepted that there will be very significant impacts if a hard or ‘no deal’ Brexit ensues.  Many research studies, including the most recent from Copenhagen Economics, confirm this.

As has been said on many previous occasions, Brexit is a British policy, not an EU policy or an Irish policy, and we believe it is bad for the UK, bad for Europe and bad for Ireland. It presents challenges to our peace, and challenges to our prosperity.  However, we are where we are, and we must now get on and deal with the matter in a way that causes the minimal possible disruption.  I think we are achieving some success in this respect.

A major part of the reason for the success has been the ‘whole of Government’ approach coordinated by my colleague, Tánaiste and Minister for Foreign Affairs and Trade, Simon Coveney. This has facilitated a high degree of consistency and clarity in preparation for the exit negotiations which has stood us in good stead, and has allowed us to feed very effectively into the work of Michel Barnier’s Task Force as it has conducted the exit negotiations.

Negotiations

Indeed, we are now at a very interesting juncture in the process. You will know that the European Council took a huge step last weekend in agreeing the current draft of the Withdrawal Agreement which, among other things, contains the agreed arrangements for a transition period up to December 2020 and the draft Protocol on Ireland/Northern Ireland.  This is now being presented to the UK as a negotiating document.

The UK has accepted that the full set of EU Regulations [referred to as the acquis] will continue to apply to them during the transition period. However, as I have already alluded to, a transition period is not a given because the final Withdrawal Agreement still has to be negotiated to its conclusion and then placed before the European Parliament, the EU27 Member States and the UK Parliament for ratification late this year or early next year.

From an Irish perspective it is good to see that agreement has been reached on some elements of the draft Protocol on Ireland/Northern Ireland, notably those related to the Common Travel Area and North-South cooperation.  While the exact set of actions necessary to avoid a hard border on the island have not yet been finalised, both the EU and UK negotiating teams have committed to discussions over the coming weeks in order to progress this issue.

Last Friday’s European Council also agreed guidelines on a framework for the future relationship negotiations, which was also be negotiated by the EU with the UK over the coming months. I welcome the fact that the EU intends to take an open and constructive approach to these discussions, and that they will be aimed at achieving an ambitious free trade agreement, in recognition of stated UK red lines in relation to its departure from the Single Market and Customs Union. It is intended that the framework for the future relationship negotiations will also be agreed later this year, and they will provide the basis for the detailed negotiations that will take place following UK departure from the EU in March 2019. 

Impacts for Brexit on agri food

Now to come to the topic that Alex asked me to speak about, namely, the implications of Brexit for the Irish agri-food and fisheries sector.

At the outset I want to say that it is my aim and that of my Department to emerge from the overall Brexit process with the closest possible relationship between the UK and the EU. This is particularly necessary in the agri-food and fisheries sector, given the highly integrated nature of trade between the UK and Ireland that has been built up over many decades.

This sector is of critical importance to the Irish economy.  Its regional spread means it underpins the socio-economic development of rural areas in particular. The sector employed over 173,000 people in Ireland last year, accounting for about 8.6% of all employment. The total value of our agri-food exports across the world increased for the eight consecutive year to reach €13.6bn. Some 38% of this was exported to the UK. Within these figures almost 50% of our beef, 22% of our dairy products; over 60% of our prepared consumer food and almost 100% of our mushrooms went to the UK. Some 47% of our agri food imports come from the UK.

Referring specifically to Fisheries, there is no doubt that Brexit poses serious potential threats to our Seafood industry and to the EU’s industry in general. Based on the comments from some UK quarters, a hard Brexit could result in the UK attempting to prohibit access to their fishing zones and setting unilateral quotas.

You will have seen from the response to last week’s Withdrawal Agreement discussion that the Fisheries issue occupied much of the political commentary within the UK. This will continue to be a very important issue when the EU/UK future relationship negotiations begin. My position and that of the EU 27 is absolutely clear – we cannot accept any change in the current and long standing reciprocal access and sharing arrangements to the detriment of Irelands and the EU’s fishing communities.  This position is clearly articulated in the transition agreement and the EU’s negotiation guidelines for the future relationship. We would all like higher quotas but the way to achieve that is to grow the stocks through sustainable management for the benefit of all.

The integrated nature of our agri food trade is demonstrated by the fact that Ireland’s biggest export market is the UK and the UK’s biggest export market is Ireland.

The most immediate impact of Brexit on the sector was the drop in the value of sterling, resulting in serious financial losses for many sectors, particularly the horticulture and forest product sectors. In order to help mitigate against this and other impacts, and to assist in reducing costs and improving competitiveness, I introduced a range of measures in the two most recent Budgets. These were aimed principally at helping reduce farm gate and business costs. 

The measures cover the introduction of low-cost loan schemes for farmers and SMEs, as well as new agri-taxation measures and increased funding under the Rural Development and Seafood Development Programmes.

I have also provided significant additional funding for Bord Bia to support its investment in market insight and development of market prioritisation initiatives, and to Teagasc for the development of their new National Food Innovation Hub in Fermoy.

Markets

I am also of the view that an equally effective way of mitigating the potential effects of Brexit is to expand our international trade opportunities and reduce our exposure to the UK market.

Consequently the identification of alternative markets for Irish food and food products within the EU and elsewhere has been a key priority for me and my Department and we have renewed our efforts in this regard against the background of Brexit. 

The task requires a focused effort on developing new, economically viable markets and, while our record to date has been very impressive, we have to raise the bar even further.  We are, however, fortunate in that we have an excellent industry-led strategy for the growth of the sector in Food Wise 2025, which provides a clear road-map for its development. 

To that end I have just returned from a trade Mission to Canada and the USA, having already led successful trade missions to Saudi Arabia and the United Arab Emirates in Feb/March 2017, to the USA and Mexico in June 2017, to Japan and Korea last November and most recently to the US and Canada from 25 February to 3 March. And I plan to undertake further missions in 2018, including to China in May.

Of course we don’t want to give up on our hard won UK market, and for that reason I have had meetings with the CEOs of the three major UK retailers (Tesco, Sainsburys and ASDA) to impress upon them the value of their continued relationships with the Irish agri-food sector.

I should point out that while exports to the UK increased by over 7% compared with 2016, the actual proportion going to the UK dropped marginally from 39% to 38% due to the increased growth in our overall worldwide markets.

Closing

I welcome the decisions made last Friday on the Withdrawal Agreement and the Guidelines for the Future relationship, and I want to reiterate my focus on the asks we set out from the very start of the negotiations, namely

  • Continued free access to the UK market, without tariffs and with minimal additional customs and administrative procedures;
  • Minimisation of the risk from UK trade agreements with third countries; and
  • Maintenance of current access to fishing grounds in the UK zone in the Irish Sea, Celtic Sea and north of Donegal and protection of Ireland’s quota share for joint fish stocks.

Thank you for the invitation and I look forward to participating in the Question and Answer Forum later.

Thank you.