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Ambassador Mulhall’s statement to the Northern Ireland Affairs Committee, House of Commons, 8 February 2017

Chairman and members of the Northern Ireland Affairs Committee

The last time I addressed you, I had very much hoped that I would not need to see you again on this topic, but thank you for the invitation to explain our position now that the Art. 50 process is about to be initiated.  

As you will know from my earlier remarks here, we never wanted the UK to leave the European Union and we regret that this has come to pass. 

While this situation was not of our making and we hoped it would never happen, the UK's exit from the EU poses very real challenges for Ireland. 

Indeed, I believe it is widely recognised that Ireland will be uniquely affected by the UK's exit. This is because of the special circumstances that apply to us. The fact is that we have the only land border with the UK. What’s more Brexit will bring to an end a very productive Irish-UK relationship as EU partners, one that has served us well for 44 years. This is a regrettable development. But we need to deal with the world as it is in the wake of the June referendum result and not as we might like it to be. 

Our aim is to minimise the downside impact of the UK's exit on Ireland, on North-South relationships in Ireland and on our currently-thriving relations with our nearest neighbour. 

At the same time we naturally seek to avail of any upsides from this situation such as the possibility of attracting some of the economic activity that may need to find a post-Brexit location within the EU. This is a pragmatic response on the part of the Irish government to managing the downsides of Brexit and responding to the reality that some companies will feel a need to move. For those who do plan to move, we believe that Ireland is the best place for them to operate for we can provide an ideal setting with our highly-educated English speaking population, a location within the EU Single Market, and an environment proven to be conducive to investment. 

Notwithstanding this potential upside on the investment front, whatever way we look at it Brexit represents a significant problem for Ireland and we will spare no effort in coping with its consequences for us.  

With regard to the impact on Ireland, several aspects concern us. 

First, we want to preserve the mutually-beneficial trading ties we have built up with the UK and, within that frame, to maintain and develop the business links between North and South in Ireland.

North-South trade amounted to more than €6 billion in 2014 when NI had a substantial surplus, of some €2.7 billion. Exports south of the border amount to 36% of NI's exports while sales to NI represent 2% of our total exports. 

Because of the importance of our bilateral trade, we welcome PM May’s commitment to seek the closest possible trading relationship with the EU after it leaves the Union. 

Our second concern relates to the border in Ireland. It is, I think, universally acknowledged that the open and virtually invisible border that exists at present confers benefits on both parts of Ireland and on all communities in Northern Ireland.

I am not aware of anyone who thinks that a hardening of that border would be an acceptable outcome. The Taoiseach and the Prime Minister as recently as last week made clear their determination to maintain the current, mutually-advantageous border arrangements. This will mean avoiding barriers to the movement of people and goods. 

I acknowledge that the arrangements with regard to customs will be complicated to tie down, as they will be affected by the shape of the new overall trade and customs regime to be agreed between the UK and the EU.

From our point of view, we wish to see the UK developing a customs arrangement that keeps EU-UK trade 'as frictionless as possible' as your White Paper puts it.  This will support our aim of avoiding barriers to the further development of economic links between North and South in Ireland.

Our third concern relates to the Common Travel Area (CTA) between Ireland and the UK, which existed long before our EU membership, and which we want to see continue to operate as it does today after the UK leaves the EU. 

We were glad to see a commitment to maintaining the CTA included as one of the Prime Minister's 12 key objectives in her recent Lancaster House speech. The CTA is of course more than just a free travel zone – between East and West and also, crucially, between North and South. It also guarantees the right of Irish people to live and work in the UK and reciprocal privileges for British citizens in Ireland. Both governments are fully committed to maintaining these arrangements.

In addressing these issues, we are very conscious of the interplay between Brexit and political developments within Northern Ireland. The facts of the matter are that a majority of people in Northern Ireland voted Remain and that the two parties that comprised the former NI Executive adopted opposing views in the referendum.

Nevertheless, in the latter part of last year good progress had been made in developing a shared approach between the Irish Government and the Northern Ireland Executive in terms of how the challenges of Brexit for the island might be managed. It is very important that, following the current Assembly elections, a new power-sharing Executive will resume this vital engagement with a view to securing the best possible outcome for the island of Ireland.

It is essential that Brexit does not affect the Good Friday Agreement, and that the people of Northern Ireland can have confidence that this will be the case. 

Given the commitment of the two Governments to the objectives I have set out, we are confident that they can be achieved, though this will of course depend in part on the wider EU-UK negotiations. Our Government has, since the referendum outcome, been in systematic and intensive contact with our EU partners and with the European institutions. This continues. We have sought, I believe successfully, to sensitise them to the particular circumstances of Ireland and the need for creative solutions to the problems created by Brexit.  We are encountering great goodwill and support. It is very positive that the chief EU negotiator, Michel Barnier, has made clear that addressing these issues will be a priority.

Ireland will remain a member of the EU into the future and we therefore have a vital interest in the future success of the EU. This means that we will be on the EU side of the table during the coming negotiations. As I have said before, this will not be a bilateral negotiation between our two countries. This is not to deny the very great continuing importance for Ireland of the British market, and of course our most positive relationship with the UK.  That will continue.  It is why a close relationship between the EU and the UK, which places the minimum possible barriers to continuing trade and co-operation in so many areas, is a key objective.

We want agreement on a new EU-UK relationship that reconciles the UK's requirements arising out of last year's referendum with the collective interests of the remaining member States of the EU including Ireland. 

Finally, some voices have been heard in Ireland suggesting that we might be tempted to follow Britain’s lead with regard to our EU membership.  Our Minister for Foreign Affairs dealt with this issue conclusively in a recent speech when he said that:

Ireland is fully committed to the European Union. … Debate is always healthy and there can be no taboos.  But the arguments we have heard are flimsy and misconceived . . . The Irish economy depends enormously on our membership of the Single Market and of the Customs Union. This is true both for inward investors and indigenous companies. It is simply inconceivable that we would have been remotely as successful outside the Union  The volume of Irish exports to the twenty-six other Member States of the Union is now more than twice that to Britain.

This is a challenging brief, but one to which we will apply ourselves with care and determination in the months and years ahead, if we are to avoid damaging consequences flowing from the Brexit decision including for the future of the border in Ireland. 

Thank you for your attention.