The Position Paper stated that the Irish government's priorities are: ‘minimizing the impact on our trade and economy, protecting the peace process and the Good Friday Agreement (between Ireland and Northern Ireland), maintaining the Common Travel area with the UK, and securing Ireland's future in a strong European Union.’

The EU's chief negotiator, Michel Barnier, the EU institutions, and other EU member states have shown ‘great understanding’ of Ireland's position and concerns, and stressed that Ireland's priorities are ‘a central element of the EU's overall negotiating objectives.’

Negotiations on a future EU-UK relationship will likely take longer than the two years provided for the withdrawal process under Article 50 of the Lisbon Treaty. As a future relationship cannot be formally finalized until after the UK has left the EU, ‘transitional arrangements should be agreed in order to provide certainty and continuity to citizens and businesses and to ensure an orderly transition from exit to a future EU-UK partnership.’

The Position Paper argued that an EU-UK Free Trade Agreement (FTA) ‘should be comprehensive and ambitious and as wide as possible in its scope.’ Any FTA should ensure that the integrity of the EU single market is protected, and should promote regulatory conformity. It also suggested that an agreement should include a robust dispute resolution mechanism and associated enforcement process.

The government said it will ‘be firm in arguing that such an agreement must protect the key sectors of the Irish economy given the unique circumstances on the island of Ireland and the importance of our economic relationship with the UK.’

To mitigate the risks presented by Brexit for the Irish economy and trade, the government is taking a five-pronged approach.

The government will look to exploit any opportunities arising from Brexit. It will continue to promote Ireland's attractiveness as an FDI location, and has decided to bid for the relocation to Ireland of the two EU agencies currently based in the UK. It will also attempt to leverage its position within the EU27 negotiation team, ‘to shape the EU27 approach to negotiations which includes aiming for the closest possible future relationship between the EU and UK.’

The government intends to prudently manage the public finances, and has set a lower debt target and will establish a rainy day fund after it balances the budget. Individual Sectoral Brexit Response Plans will be developed by all government departments to mitigate emerging sectoral challenges.

It will explore existing EU measures that could assist Ireland in mitigating the effects of Brexit on Irish businesses and economic sectors. It will make the case to the EU that Ireland may require further support ‘that responds to the fact that the UK's withdrawal represents a serious disturbance to the Irish economy.’

At a Council meeting on April 29, the EU27 agreed its negotiating principles for Brexit. It said that the Council ‘stands ready to initiate work towards an agreement on trade, to be finalized and concluded once the United Kingdom is no longer a Member State.’

As regards ‘the unique circumstances on the island of Ireland,’ the Council agreed that ‘flexible and imaginative solutions will be required, including the aim of avoiding a hard border, while respecting the integrity of the Union legal order.’

The Minister for Foreign Affairs and Trade, Charles Flanagan, said: ‘We have got off to a very good start to our efforts to deliver the best result for Ireland and our citizens but we cannot rest on our laurels. There is a long way to go and the detailed work of my department, and across government, continues.

‘The Position Paper sets out the government’s approach to the upcoming withdrawal negotiations. It demonstrates clearly that we are ready for the negotiations ahead. It builds on the four headline priorities already identified while also setting out the government’s position on the EU’s wider priorities, including on the question of the UK’s financial liabilities and EU citizens’ rights. It also looks ahead to the future relationship negotiations and the issues that will need to be addressed in this second phase of the negotiations.

‘We are already one month into the two-year process provided for under Article 50. Once negotiations get underway, we must focus on delivering early progress on the key withdrawal issues and to move positively towards opening discussions on the future relationship between the EU and the UK as soon as possible.’

This article first appeared in Tax-News on 4 May published by Wolters Kluwer TAA Limited.