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Michael Creed, TD, Minister for Agriculture, Food and the Marine UK Food and Drink Federation Policy Convention 13 June 2018, British Museum. London

Ladies and Gentlemen, I am delighted to be here with you today in London,  at your annual Policy Convention. I want to thank Ian and his team for this opportunity to engage with you, the members of the UK Food and Drink Federation. So many of you,  I know,  have direct and indirect interactions with the food and drinks sector in Ireland.

This is actually my third visit to London in the last six months. There must be some significant issue attracting me here so regularly.  I wonder what it could be!

However, I want to forget about all of that for a moment. If  you can indulge me briefly, I’d just like to talk about  Ireland for a while. I want to tell you something about our ambitions for the development of our own agri food sector,  and how they are being realised.  

Ireland’s economy is  is often characterised as a small and open. That’s a fair assesssment. Our economy relies to an exceptional extent on international trade.  In terms of  “openness” our economy  is ranked fifth in the world. That  brings great benefits, and,  of course some risks.

The vagaries of weather, geopolitical events, and supply and demand dynamics across the globe,  have an impact  on our economic performance.  These are risks  that open, trading countries understand, but don’t control.

On balance,  however, the assessment in Ireland is that our best interests  lie in being able to trade with others as freely as possible. There are ups and downs, and we act to protect our most vulnerable sectors, but our commitment to international  trade is unambiguous.

Ireland’s largest exports in value terms are pharmaceuticals, organic chemicals, and optical, technical and medical, apparatus. Electronic equipment is up there too.

Agri food is our largest indigenous industry. We cherish it, because it creates employment in rural areas, sustains rural communities, shapes the landscape that is a central part of our cultural heritage, and protects the environment.

I can talk about our romantic attachment to the land – I know that others like to see us that way sometimes. Perhaps there’s even a grain of truth in the cliché, and we have encouraged it over the years. But the reality for the Irish Government, is that based on cold, hard economics, it makes sense to develop the agri food sector.

We export almost 90% of the food and drink we produce, to almost 180 countries world wide.  Between 2010 and 2017, the value of Ireland’s agri food exports increased from just over €8 billion, to about €13.6 billion. That’s a 70% increase, during the worst recession in living memory.

We have a strategic plan, developed collaboratively with stakeholders in the agri food sector, called Food Wise 2025.  Its ambition is to increase the value of our exports to €19 billion by 2025. It’s a real challenge, but we have a plan and we are working hard, with industry, to deliver it.

Less than a month ago, I was in China to lead a trade mission involving 40 Irish companies.  I was in the happy position to announce that the Chinese authorities had granted access to the market for Irish beef. I can speak from my own personal involvement in this market opening initiative.  Access was extremely hard won and took many years to realise. Without the EU legal framework underpinning Ireland’s production system, theprocess would have been even more complicatedand taken longer.

During my visit, two Irish meat companies signed contracts totalling €85 million, and two of our agri tech companies signed contracts with Chinese distributors.  We also had discussions with potential Chinese investors in Ireland. 

The story for Irish agri food in China has been a remarkable one, with annual exports increasing in value from around €200 million in 2010, to more than €800 million in 2017.

Earlier this year, I was in the US, our very good friends and trading partners.  The value of our relationship with the US goes far beyond that flowing from trade alone.  I hope that the current difficulties between the US and its allies and trading partners can be resolved soon. I know that you do too.  The value of Irish agri food exports to the US exceeds €1 billion per annum today.

Later this year I will be leading an industry delegation to Indonesia and Malaysia to develop opportunites for the Irish agri food sector, and I have more plans for international trade missions next year. I could say much more on our commitment to international trade, but this has been the pattern during my tenure as Minister over the past two years.

Since 2008, Irish Governments have been working hard to increase Ireland’s profile as a producer of safe, high quality food. Building a global footprint for the sector has been a major policy priority . The gains aren’t linear – there can be slips along the way - but we are making real progress in expanding our global footprint.

Of course Ireland is engaged in this international outreach as a fully signed up member of the  European Union! Apart from our expanding global footprint, our food industry has tariff free , frictionless access to a market of more than 500 million of the most affluent consumers in the world.

We are part of somewhere between 50 and 60 free trade arrangements, forged over many years,  between the European Union and third countries.  And even where we don’t have free trade arrangements, we are working to access markets, but the process is long and complicated.

We have a strong voice in the creation of the legal framework that governs the Union, and we work with other Member States to build alliances and compromise. The results are often imperfect, but far better than the potential for conflicting rules if each member state ploughed its own furrow.

Over the years we have worked closely with the UK in the EU  arena, based on common language, philosophy and interests in many areas. My civil servants tell me that their UK counterparts are highly skilled and competent, that they negotiate effectively, and have influenced legislative and other outcomes at EU level  in a significant way.

And based on my experience,  I have the highest regard for UK Ministers, and I know that that view is shared by my predecessors.

In Ireland, we are using our position as a member of the European Union as a platform to build our own international profile – Ireland’s international profile -  and increase our global exports. 

We value our national identity – ask anyone who was in Twickenham on St. Patrick’s Day - but we want to be part of a bigger picture.  We believe that we are stronger as a member of the EU, and 92% of our people do too, based on the most recent polls.

The UK has made a different democratic choice. It is one that we fully respect. As we approach another critical juncture in the Brexit negotiations,  another challenging period it must be said,  it is so important that we keep the lines of communication open and listen to our constituencies. This is vital, if we,  the policy makers and negotiators, are to remain foccussed on the potentially serious  commercial realities of a bad outcome.  By the way, no deal and consequently no transition, is a the worst outcome – for everybody!

It is a real pleasure for me to be here in the British Museum, an institution which has been such a strong representation of British culture and history for over 250 years.  When I found out I would be speaking here, I did some research, and noted,  with interest,  that this institution  has a strong Irish connection.  One of the founding fathers of the Museum was an Irishman, Sir Hans Sloane. He was  a doctor from Killyeagh in County Down. He bequeathed his vast volumes of collectables and papers to the state in 1772. The collection was so voluminous,  that parliament established the British museum to house it all and make it available to the public.

For me, this is but another example of how connected Irish and British societies have  been, are and, I hope,  will continue to be.  This  connection infuses  all aspects of business, culture and society in the UK and in Ireland, and will  ensure that our peoples and economies will remain hugely interdependent into the future, long  after Brexit is distant memory.

However, we cannot underestimate the current challenges. The Irish and UK food and drink industries are closely intertwined, given the proximity of our markets, our shared food culture, and the very high level of integration in our supply chains.  

The UK is Ireland’s largest market for agri food products, with exports valued at some €5.2 billion in 2017. And Ireland is the largest export destination for UK food products,  with a value of €4.2 billion in the same period.

So in terms of this industry,  this is a symbiotic realtionship.  Therefore I want to challenge members of the Food and Drinks Federation today. Make your voices heard in this debate.  You are the torchbeareres for the proud traditions of a great British Food and Drinks Industry.  Your  members are the creators of the jobs and export opportunities  that drive economic development. The ebb and flow of trade is your lifeblood.  Everybody pays for additional  cost along the supply chain – farmers, processors, retailers  and ultimately consumers.   It is in your best interests, and ours too,  to ensure that trade remains as frictionless as possible. 

You are a major player, and I know that your influence is significant.  I offer no advice on how you  choose how to exercise that influence over the coming months. That is a matter for your members! I do, however, urge you to play an active part, because these negotiations are the most significant thing to happen your industry since the accession of the UK , Ireland and Denmark to the EEC in 1973, and the clock is ticking.

I want to assure you that the Irish Government is  fully committed to maintaining the closest possible trading  relationship with the UK  into the future.  We cannot,  however,  ignore the current challenges in the Brexit negotiations.

The bases of the  mutual trading relationships currently enjoyed  are the EU Single Market and the Customs Union.  These frameworks have been developed over many years. In practice,  they mean that Irish and UK companies can trade in a highly streamlined and cost efficient way.

The common EU regulatory environment provides the confidence to consumers in Ireland, the UK and across the whole of the EU, that food products from different member states are produced to highest standards.

We have to accept that the benefits of these  arrangements are significant, but equally that they are challenged in a very fundamental way, indeed that they may unravel, as a result of Brexit.

This is something we must work to avoid, but in doing so, we cannot simply dismiss the legal and constitutional framework that has facilitated our trading arrangements over many decades.  That’s just not realistic.  So let me refer briefly to some of the more difficult issues facing us at present.

Firstly , the issues related to Northern Ireland and Ireland must be resolved if progress is to made in the coming weeks.  The UK Government has committed to ensuring that there will no return to a hard border in Northern Ireland and that north south cooperation provided for in the Good Friday Agreement and which facilitates the current all island economy,  must be maintained.

We are glad that the  UK Government has, in recent days,  presented its proposals in this regard. These relate to Customs arrangements only. Of course the avoidance of a hard border on the island of Ireland will also require regulatory alignment. 

This isn’t an EU negotiating position , but is rather part of the agreement reached between the UK and EU in December. This need for regulatory alignment is acknowledged in the recent UK paper.

I hope that progress can be made on these issues in the coming days.

Moving to the broader future EU-UK relationship,  I also want to be frank. Whether you were in favour of Leave or Remain, the objective reality is that the UK’s departure from the EU has the capacity to disrupt trade.  We cannot ignore the challenges which the UK Government’s current negotiating red lines of leaving the Single Market and the Customs Union present.

While I appreciate that  the Prime Minister has committed to achieving a future trading relationship that is as frictionless as possible, - and that is our objective too, - the reality is that trade outside the EU Single Market and the Customs Union,  is likely to result in additional friction in trade in food products. 

By way of example, a recent study by KPMG for the Government of the Netherlands suggests that Customs and sector specific formalities such as Sanitary and Phytosanitary checks post Brexit could cost between €413 and €1,163 per consignment of meat. So there is significant potential for additional cost as a result of non-tariff barriers. Someone along the supply chain will have to pay for these costs.

There are serious issues at stake in this negotiation.   It will be farmers, businesses and consumers in Ireland, UK and the EU who bear the brunt of a bad outcome.   We need realistic and complete solutions to the challenges that face us, and we need them very soon. I hope that negotiators can make progress this week.

Once again,  I appreciate the opportunity to engage with you here today. I am certain that there are diverse views on the issues I have discussed.

However, we have a common interest in maintaining the closest possible trading and business relationships  in the years to come. I am confident that we can do that, with sufficient determiniation and commitment on both sides.

 

ENDS