Brexit, Ireland-US relations, Ireland and the Future of Europe
In a speech to the American Chamber of Commerce Ireland in Cork today, EU Agriculture and Rural Development Commissioner Phil Hogan said: "Cork is one of Western Europe's great maritime trading cities, with a long and proud history of doing business with the US, the UK and continental Europe. Since 1973, Cork has arguably enjoyed the best of all possible worlds: a common travel area with the UK, full membership of the EU and single market, and a magnet for US investment and business. Today, the tectonic plates underpinning those certainties are shifting. The UK has voted to leave the EU. The US has elected a president with a strong nationalistic and inward-looking business focus. And the European Union is steaming ahead with further economic integration. Your challenge as business leaders is to plan for the future by triangulating these new circumstances."
Scroll down for the full text of Commissioner Hogan's speech.
Commissioner Phil Hogan, Speech at American Chamber of Commerce Ireland Cork Business Lunch:
22nd September 2017, Cork City, Ireland
- Check Against Delivery –
Ladies and gentlemen,
I'm very happy to be here with you in the real capital today. I owe this great city a lot – this was where I went to university and where I took my first steps into agricultural politics as chair of the UCC Macra na Feirme branch.
Cork is one of Western Europe's great maritime trading cities, with a long and proud history of doing business with the US, the UK and continental Europe. Since 1973, Cork has arguably enjoyed the best of all possible worlds: a common travel area with the UK, full membership of the EU and single market, and a magnet for US investment and business.
Today, the tectonic plates underpinning those certainties are shifting. The UK has voted to leave the EU. The US has elected a president with a strong nationalistic and inward-looking business focus. And the European Union is steaming ahead with further economic integration.
Your challenge as business leaders is to plan for the future by triangulating these new circumstances.
I propose to go through them one by one, and we can then use this as a springboard for further discussion.
Let's begin with Brexit. Prime Minister May is at this exact moment about to go on stage to deliver an important Brexit speech in Florence.
Whitehall has been flagging this as the next major milestone in the UK's strategy. Some people would be surprised to learn that there has actually been a UK Brexit strategy!
From the European Commission's point of view, if the Florence speech is to prove a true and helpful milestone, Prime Minister May needs to answer the following questions:
First, what sort of permanent relationship does the United Kingdom want with the EU? Is it still the relationship she spelled out in her Lancaster House speech and her speech to last year's Conservative Conference, in other words a you-go-your-way we'll-go-ours separation?
Second, what sort of transitional arrangement will the UK ask for? Will it want to temporarily continue its membership of the EU market, for example, to give business time to get ready for life outside? Is it ready to pay for access after Brexit day? For how long does it want the temporary relationship to go on?
Third, what are the UK's answers to the three questions the EU has been asking since March – how will you treat EU citizens (in the transition period and after)?
Are you ready to meet your financial commitments (in other words the "divorce bill" as well as the cost of any transitional access)? And how do you plan to deal with the Irish border ? Remember, these are the three questions that MUST be answered before the talks can move onto transitional arrangements.
The EU has been constantly asking for clear answers to these questions. But so far we've been disappointed. For example, it's amazing that the UK's Foreign Secretary can publish a 4.000 word article about the UK's Brexit future and not mention the Irish border.
You’d think that the Foreign Secretary would have ideas about how to manage the UK’s only future land border with the EU. If Mrs May is as vague on the three questions as Mr Johnson was, then the signs will not be good.
But we're more optimistic and have the impression that the Prime Minister will try to move things forward. There seems to be a new feeling in the air in Westminster -- some members of the Cabinet have sketched their desired transitional arrangements, and so has the Labour Party.
The UK asked for the latest round of negotiations to be moved back to make room for the Prime Minister's Florence speech, so there must be an intent to bring clarity; the Prime Minister seems to have tightened her link to the UK's negotiating team by moving Mr Davis’s chief negotiator. So there are signs that the UK is about to become more businesslike.
This reflects the fact that the British government is now listening to the business lobby, which has woken up and is making its voice heard.
The best solution could be an interim arrangement with the EU to continue benefiting from the single market and the customs union for as long as is needed until an alternative EU-UK deal is reached, as business leaders have proposed.
Let me now turn to the EU-US relationship. It remains unclear where the US stands in relation to many trade and business issues, largely because of the gap between what President Trump says and what President Trump does.
From the EU side, we remain ready to do business when we receive the signals from Washington.
In the official document accompanying his State of the Union speech last week, President Juncker noted that "the United States is currently the EU’s biggest export market and a key ally, and we will continue to work together for a positive, ambitious and mutually beneficial transatlantic trade agenda.
The launch of a Joint Action Plan on trade with the United States was agreed in May by President Juncker and President Trump.
However, in relation to the TTIP agreement, talks have now effectively stopped. Following German elections, the EU needs to clarify if there is a sufficient level of shared ambition and common ground before deciding whether and how to proceed with new negotiations. But I wouldn't get my hopes up at present.
President Trump has made noises about repatriating American businesses from abroad, even referencing Ireland on occasion.
But there is no evidence to date that this rhetoric will be matched by action. Ireland remains a logical and very attractive European base for American business.
(Ireland - Future of Europe)
Finally, let me turn to the future of the EU. President Juncker's speech last week had an optimistic and cautiously ambitious tone. When it comes to the Eurozone, he noted that the "wind is in our sails".
I firmly believe that Ireland should continue to place itself at the centre of the EU and the Eurozone. Of course, many challenges remain, Brexit foremost among them. But there are also many opportunities on the horizon.
Ireland is already becoming the favoured post-Brexit base for many multinational operations, particularly in financial services. And I am certain this trend will continue.
Contrary to some newspaper headlines last week, our competitive corporate tax rate will remain as long as we wish it to remain.
We will retain a veto on this red line issue, a point reiterated by President Juncker in his interview with the Irish independent.
And the government has in my view taken the correct approach by deploying strong diplomatic and business outreach to build new trade relationships. This will lead to new opportunities, not least in Ireland's competitive agri-food sector.
Ladies and gentlemen, I hope this has given you a flavour of the current political and economic environment, viewed from both an Irish and a Brussels perspective. If you have any follow-up questions, I'll be happy to take them now.