Irish Exporters Association And The Lisbon Treaty

Trade

A new deal for Europe John F. Whelan argues that the Lisbon Treaty is a new deal for Europe Looking back over the past 36 years, the EU is not the same institution Ireland joined back in 1973. Then, it was a rather small club with institutions and electoral systems designed for a league of nine connected countries. Each country still maintained its own currency, trading rules, immigration rules and agricultural policies. However, the EU and its member states and citizens have accepted the need for change over the decades since then in the pursuit of better living standards, better security of employment, easier trading and freedom of movement of people, goods and services, and capital. Each significant change required big compromises by member states. Perhaps the most remarkable one was that taken 17 years ago when Ireland and ten of our European neighbours officially accepted the idea of a common currency. The last decade, and the current period of unprecedented economic recession and very high instability in stock markets, has demonstrated the robust nature of the monetary Union and the many benefits for both countries and businesses in the Euro area. The single currency has led to an increase in price transparency which has helped Irish exporters targeting EU markets. It has also eliminated exchange rate risk for a large part of our trade and reduced international transaction costs. It is in the current harsh economic and financial environment, that the benefits to a small open economy of being in a large single currency area are most clear. The old ‘Punt’ would have suffered dramatic volatility in the current environment with consequent damage to our export industry, which despite the global recession is trading relatively well, when compared to other countries. A bold step was taken back in 1999, with potential consequences far greater than that at stake in the Referendum being held on October 2 on the Treaty of Lisbon.

Why does Europe need the Treaty of Lisbon?

The EU has moved from a grouping of 15 countries to 27 over the past five years. The current EU and EC treaties need to be updated with simplified systems and streamlining of the many institutions to enable the larger 27 member EU structure to function efficiency. The Lisbon Treaty is a new deal for Europe for the following reasons:

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services of general interest, research, space, territorial cohesion, commercial policy, humanitarian aid, sport, tourism and administrative cooperation. • Withdrawal from the Union: the Treaty of Lisbon explicitly recognises for the first time the possibility for a Member State to withdraw from the EU. John F, Whelan

• A more efficient Europe, with simplified working methods and voting rules, streamlined and modern institutions for an EU of 27 members and an improved ability to act in areas of major priority for today’s Union. • Effective and efficient decision making: qualified majority voting in the Council will be extended to new policy areas to make decision making faster and more efficient. • A more stable and streamlined institutional framework: the Treaty of Lisbon creates the function of President of the European Council elected for two and a half years, introduces a direct link between the election of the Commission President and the results of the European elections, provides for new arrangements for the future composition of the European Parliament and includes clearer rules on enhanced cooperation and financial provisions. • The Treaty of Lisbon improves the EU’s ability to act in several policy areas of major priority for today’s Union and its citizens. This is the case in particular for the policy areas of freedom, security and justice, such as combating terrorism or tackling crime. It also addresses to some extent other areas including energy policy, public health, civil protection, climate change,

“Since 1973 exports have grown from a relatively small €1.3

billion to €154 billion last year. Our biggest customer is Europe taking 47 per cent of all our

exports. The ‘Four Freedoms’

which are the primary focus of the EU, has been at the root of our export growth.”

Should Ireland withdraw from the European Union?

A further ’no’ vote on October 2 would A further ’no’ vote on October 2 would bring this into consideration. The many benefits Ireland has derived from EU membership need to be fully appreciated when considering whether Ireland should withdraw from the EU. And of course for each benefit there is some compromise and loss of sovereignty, we need to weigh up the costs and the benefits and decide. Since 1973 exports have grown from a relatively small €1.3 billion to €154 billion last year. Our biggest customer is Europe taking 47 per cent of all our exports. The ‘Four Freedoms’ which are the primary focus of the EU, has been at the root of our export growth. The freedom of movement of goods has ensured tariff free movement of our exports across Europe. The freedom of movement of services will enable our services exports to take a major leap forward, when the EC services directive comes into effect across the EU on January 1 2010. The freedom of movement of capital has already supported Irish industry with major investments from the UK, Germany and France over the past three decades. And the freedom of movement of people has been at the heart of the Celtic Tiger phenomenon, providing the staffing at all levels of competence to support our rapid growth. If Ireland was less dependent on exports and had a larger domestic market, then the issue of withdrawing from the EU would perhaps be worth considering. For example. the UK economy exports 26 per cent of its manufactured goods, it could consider exiting and still be likely to be able to sustain its economy, and similarly for most EU countries. But the Irish economy is one of the highest dependents on exports globally, selling 80 per cent of its goods and services abroad. Withdrawal from the EU would be catastrophic for Ireland, sending the economy into terminal decline. John F. Whelan is CEO of the Irish Exporters Association Public Affairs Ireland