Leo Varadkar (Dublin West, Fine Gael)
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As the Deputy will be aware, the European Union and the United Kingdom reached an agreement on their future relationship on 24 December 2020, which provisionally entered into force on 1 January 2021. The Agreement delivers on the EU’s and Ireland’s objectives with businesses having access to zero rate preferential tariffs and quotas on goods traded between the EU and UK once the usual rules of origin for the EU-UK Free Trade Area are met. This is vitally important for the agri-food sector, for example, which would otherwise have faced very significant additional costs and barriers when trading with the UK.

In 2018, my Department, in conjunction with Copenhagen Economics, undertook a comprehensive study to consider the impact of Brexit on Ireland’s trade and economy. Following agreement in October 2019 on the Withdrawal Agreement and the Political Declaration for the Future Relationship between the EU and the UK, my Department commissioned further economic modelling to reflect the benefits of the terms of the Agreement and Political Declaration/Protocol on Northern Ireland.

This Analysis forecast that growth levels over a decade would be 3.2 to 3.9 per cent below where it would otherwise be, depending on whether a "best-case" or "worst-case" scenario was modelled. This outcome showed a reduction by almost half in the adverse impacts on the Irish economy that had been forecast for a trading relationship with the UK based on WTO terms, and the study identified a lessening of the negative impacts envisaged for the more generic FTA modelled in the previous Copenhagen Economics analysis.

As regards undertaking a specific appraisal of trade data for the first two quarters of 2021, I believe it is too early to commence a meaningful impact assessment of the concluded EU-UK Trade and Cooperation Agreement (TCA) at this point as certain parts of the TCA and the Northern Ireland Protocol have grace periods or temporary derogations attached to them. Furthermore, a framework for regulatory cooperation in financial services between the EU and the UK is to be agreed by March 2021 and the EU is assessing the UK’s data privacy regime before deciding whether to grant a data adequacy decision in favour of the UK. In addition, further changes will be introduced by the UK on 1st April and 1st July in term of SPS certifications and inspections regimes. Therefore, we will not have sufficient statistical data available to assess the totality of the impact of the TCA until such temporary derogations and all elements of the Agreement are fully in force, including any further easements or derogations that may be agreed under the TCA structures. However, I am fully committed to such post-implementation evaluation at an appropriate point, as soon as sufficient statistical data are available. That assessment will have to take account of the impact which stockpiling ahead of 1st January and dampening in demand due to the pandemic, may have on such data, esp. as between the UK and Ireland.

In the meantime, in advance or a macro-economic assessment, I should note that my Department and the Enterprise Agencies are in constant contact with industry bodies including through the Enterprise Forum which I chair and the Retail Forum, chaired, by Minister Damien English, to identify where sectoral and regional impacts of the TCA are emerging at an operational level. In addition, Minister Robert Troy, in light of his responsibilities for trade promotion, has engaged in extensive outreach with business groups to address the many logistical challenges that the TCA has presented us with. We have a large number of Brexit supports including planning vouchers, consultancy and mentoring supports, the Enterprise Ireland Ready for Customs Grant of up to €9,000, as well as financial supports for adapting and restructuring business models and grants for research into new markets to assist companies respond to the new TCA dispensation. In addition, Budget 2021 provided contingency funding for COVID-19 and for all Brexit outcomes and the Government is committed to assisting firms on a dynamic basis in responding to Brexit, especially those firms that are in the most severely impacted sectors.