SINCE I took office in June — as Minister for Foreign Affairs and Trade with special responsibility for Brexit — I have been keenly aware of the importance of engaging on the important topic of Brexit.
Through this new monthly column in the Evening Echo, I will be sharing with you, the people of Cork, the latest news, updates and insights on Brexit, the negotiations, and the impact for you, your families, and your work.
With just over a month left to make sufficient progress on a number of issues before December’s European Council, we are at a critical juncture in the Brexit talks. The pressure is on because all parties involved are keen to move as quickly as possible to the second phase and discussions on the EU and UK’s future relationship.
The reason that we weren’t able to move to that second phase sooner is simply that that sufficient progress by the UK hasn’t yet been made. Some progress has been made, but not enough. As you will probably know, this first phase of discussions has focused on citizens’ rights, settling the UK’s financial commitments, and Ireland. Very good progress has been made on citizens’ rights, while on the financial settlement — a difficult issue — there is still a way to go.
On Irish issues, the Government’s position and priorities have been clear for a long time. We want to protect the peace process, including by avoiding a hard border on this island.
We want to maintain the Common Travel Area with Britain, protect North-South co-operation, and safeguard the EU citizenship and other rights of people in Northern Ireland.
We want a transition phase for Brexit that preserves the status quo in terms of membership of the Single Market and Customs Union and that is as long as is necessary for an orderly Brexit. If this means that more than two years is needed for that transition or implementation period — and in my view, that is very likely to be necessary — then longer than two years is what we’ll need.
In terms of the future relationship between the EU and the UK, we want the closest possible future relationship. Let me underline that — the UK will have no closer ally within the Union when we move to Phase Two than the Irish Government, if it seeks that closest possible future relationship on the basis of what is realistic and deliverable.
Having said that, we will need the UK to make serious and significant commitments in respect of the border if we are to move to phase two in December.
Ireland and the UK have a remarkably close trading relationship with 14% of all our goods and 17% of our services exported to the UK. At the same time, the UK is the largest source of our imports in goods and the third largest provider of our services. Over 45% of all our food and live animals are exported to the UK. Ireland is the UK’s fifth largest trading partner, even ahead of China.
So it is not an overstatement to say that Brexit poses unprecedented economic challenges for Ireland. At the same time, it is important to note that the rest of the EU accounts for 35% of Ireland’s exports, more than double our exports to the UK.
Staying at the heart of the EU, with unfettered access for businesses in Ireland to the Single Market, is therefore central to our sustainable economic development and will play a major part in mitigating the economic effects of Brexit. Let me be crystal clear about one thing in particular — there is zero chance of Ireland following the UK into the departure gates of the EU.
We believe it is in the best interests of the UK, economically, to stay in the Single Market and the Customs Union — or a union or customs partnership along similar lines — and that it is not too late for the UK to change course on this.
Such a change would also help immensely in resolving many of the challenges we are facing on protecting the Good Friday Agreement and avoiding a hard border.
Our shared future has to be free of tariffs, free of non-tariff barriers, not only starting from a position of regulatory convergence but — ideally — maintaining that conformity. And if this means the UK setting aside its ambitions around new trade agreements around the world, we all have to make the case that that is a price worth paying.
There is no logic to leaving the world’s largest free trade area in the EU, and bilateral EU trade deals with more than 50 other countries, in the supposed pursuit of free trade.
But we are not in denial either. Brexit will mean change and we need to ensure that the Irish economy, and our businesses, are ready for this change.
The Government’s own preparations have been unrelenting. All our efforts are aimed at strengthening the economy to deal with headwinds, and Brexit certainly fits that description.
This means sustainable fiscal policies, measures to strengthen competitiveness, and protecting jobs and businesses most affected by Brexit.
At the micro level, our focus is on helping businesses to innovate and to remain competitive. This was the logic behind our new €300m Brexit Loan Scheme and the separate €25m Response Plan specifically for the agri-food sector.
Trading through Brexit will be challenging, but — as another Corkman once said — if we fail to prepare we can prepare to fail. Brexit is one of the biggest political, diplomatic, and economic challenges this country, and the Cork region, has ever faced.
But if we stand strong in articulating what we can accept, and get ourselves ready to manage inevitable change, we will have a bright future as an English-speaking island of stability and confidence right at the heart of the world’s largest single market.
In the first of a series of monthly columns, Minister for Foreign Affairs and Trade Simon Coveney discusses the challenges of Brexit and how negotiations have gone to date.