WASHINGTON – With the UK exiting the European Union, Ireland could potentially become a stronger, more active bridge between the U.S. and the EU trade markets, Ireland’s Minister for Foreign Affairs and Trade Simon Coveney said Wednesday.
Ireland has an annual $100 billion trading relationship with the U.S., with neither country claiming a significant surplus or deficit. Irish companies employ about 100,000 Americas, while American companies employ about 150,000 Irish.
Despite a potentially stronger relationship between the U.S. and Ireland, Coveney expressed overwhelming concern about Brexit’s impact on Ireland while speaking at the Center for Strategic & International Studies. He said Brexit offers very little upside, explaining that the worst-case scenario is that UK-EU negotiations break down, potentially paralyzing trade between Ireland and the UK.
Ireland and the UK represent $75 billion in annual bilateral trade, with 10 percent of the Irish workforce directly employed through the relationship. Were Brexit negotiations to collapse, it would trigger World Trade Organization rules. Coveney said this could mean a 60 percent tariff on beef between Ireland and the UK and a 40 percent tariff on dairy products, which would essentially freeze trade.
Coveney said that UK citizens are coming to terms with the Brexit campaign’s false promises for a “glorious new future for Britain” after the exit. He said it won’t be possible for the UK to leave the EU, retain the benefits of membership and gain new benefits through trade agreements outside the confines of the EU.
“That is not going to happen, and it’s very clear now that that can’t happen because the EU cannot effectively reward a country for leaving the EU by continuing to apply all of the benefits of EU membership and ignoring all of the other things that that other country wants to do with other third countries, in terms of trade agreements and so on,” Coveney said.
He said the Brexit negotiations, which are scheduled to continue Sunday, will be “difficult.”
“We are on the EU side, even though we are on the opposite side of the table from a good friend,” he said. “What I would say to Britain, and I say it all the time, is that Ireland is the closest friend you have here in these negotiations, and that’s true.”
The negotiations, which began in late June, are expected to be broken into two phases, with the first deciding the “divorce issues.” Those issues include the fate of EU citizens in Britain and vice versa, as well as Irish citizens’ rights. The second phase will concern trade and transition agreements.
Coveney said that the impending Brexit leaves Ireland in a vulnerable and extremely exposed position, and he lamented possible disruption to the peace agreement between the Republic of Ireland and Northern Ireland. Negotiations will be key for maintaining the Belfast Agreement in its entirety, he said.
“That isn’t some kind of voluntary agreement between two governments. It is a legal treaty that has been submitted to the UN, and it is something that both governments as co-guarantors of that agreement have a responsibility legally to implement,” Coveney said, adding that the peace process has taken decades of diplomacy, handshakes, dinners and discussions to maintain.
Brexit, he continued, is not just another political storm that will come and go, but rather a fundamental policy change that will permanently alter relationships and agreements.
“So Ireland is faced with the reality of something we have virtually nothing to do with, but the consequences will have a significant impact on Ireland’s place in the European Union and Ireland’s relationship with the UK,” he said.