In a world of nearly 200 countries, Ireland is consistently ranked in the top 10 or 20 in terms of prosperity and high living standards. Although we have our problems, Ireland has found a way to turn its lack of traditional natural resources to our advantage.
Some countries, such as Norway and the Gulf States, use their rich natural resources to create employment and fund services and a good quality of life for their citizens.
Ireland however, has very little oil, gas or mineral wealth. There are no diamond mines beneath the rolling hills of Connemara. Nor did we ever colonise other countries and exploit their resources to enrich ourselves.
No, for us, trade is the source of our economic growth. Our attractiveness as a place to invest and our ability to enter and keep international free trade agreements with other countries is the foundation of our economic model.
It is what has consistently raised our living standards over decades and created hundreds of thousands of jobs for our citizens.
Trade is good for workers, good for business, good for producers and good for consumers.
A more inclusive society that rewards work better must be one of the legacies of the pandemic
This was confirmed by an independent examination conducted by Copenhagen Economics, which was commissioned by the Department of Enterprise, Trade and Employment to produce a report into the costs and benefits for Ireland arising from four recently concluded EU Free Trade Agreements (FTAs) – Canada, Korea, Mexico and Japan.
The study, which I’m publishing today, has several interesting findings.
Firstly, it shows that real wages will increase by up to 4.4 per cent by 2030 as a result of these trade agreements, with the largest increases found for low-income workers.
I am particularly heartened by this finding. One of my top priorities as Minister for Enterprise, Trade and Employment is to improve terms and conditions for lower paid workers.
This independent report demolishes the notion that well-designed free trade agreements exert downward pressure on wage or labour standards.
Covid-19 has caused us to reconsider who an essential worker is and expand our definition to include cleaners, retail workers, transport workers, drivers and security guards.
A more inclusive society that rewards work better must be one of the legacies of the pandemic. Our commitment to free trade compliments our other policies in this area, including maternity and paternity benefit, parental leave, the extension of social insurance benefits for the self-employed and our plans to introduce a statutory sick pay scheme and a living wage.
Being welcoming of talented and skilled people from other parts of Europe and the world is also key to success for a modern and diverse economy and society.
Free trade agreements also make it easier for enterprise by removing red tape, cutting down tariffs and removing quotas and regulatory barriers
The Copenhagen report shows that Ireland’s GDP will be 2.3 per cent higher in 2030 than it otherwise would have been without trade agreements with these four countries. This increase in GDP is driven by an increase in Irish exports and imports, both by just over 3 per cent.
Trade deals open up new and exciting markets for businesses. Instead of a potential market of five million for their goods and services, Irish companies have access to hundreds of millions of customers all across the globe.
Free trade agreements also make it easier for enterprise by removing red tape, cutting down tariffs or eliminating them completely and removing quotas and regulatory barriers.
CETA, the free trade agreement between the European Union and Canada, which has recently garnered some attention, sees one of the most comprehensive tariff reductions ever agreed by a free trade agreement with the EU.
Overall, 98.6 per cent of tariffs will be removed on Canadian imports to the EU and 98.7 per cent on exports from the EU to Canada.
Although it hasn’t yet been formally ratified by Ireland, the agreement has applied provisionally since 21st September 2017. It is currently being examined by the all-party Oireachtas Committee on European Affairs and will be subsequently put to a Dáil vote.
By increasing our imports, Irish customers have more choice at the supermarket or shop and they can expect it to cost less when they get to the till too
Tariff-free, low bureaucracy trade is particularly important for SMEs, given that trade barriers tend to disproportionately burden smaller firms. More modern trade agreements include sustainability clauses to ensure that countries party to them respect the Paris Climate accords, International Labour Organisation conventions and uphold agreed standards.
Finally then, trade agreements are really good for consumers. By increasing our imports, Irish customers have more choice at the supermarket or shop and they can expect it to cost less when they get to the till too.
We must never forget the benefits and importance of trade to Ireland. It is this commitment to free trade, enterprise and our strong support for multi-lateralism through membership of the European Union and the World Trade Organisation that underpins our entire economic model.
This will be more important than ever as we rebuild after the pandemic. Ireland must continue to champion free trade.
Anything that might suggest that we are moving away from free and open trade, enterprise and Europe, is to our detriment both economically and socially and should be vehemently avoided.
Leo Varadkar is Tánaiste and Minister for Enterprise, Trade and Employment