Speech by Minister Soini at The Irish Business Club
Speech by Foreign Minister Timo Soini. Breakfast Meeting at The Irish Business Club, The Helsinki Finnish Club on 28 January 2019.
It was a nice and warm Finnish Midsummer 2016 when we learned about the results of the referendum. Since then there has not been a day without Brexit.
The negotiations proved to be more complex than originally expected. At the same time I believe that protecting the Single Market
- the essence of the Union - is one of the reasons why the EU has stayed united during Brexit negotiations. Brexit has also pointed out that we must continue to focus on strengthening the Single Market.
I would like to underline two messages. First, we are very sad that the UK is leaving the EU. The UK has been a very close partner –
a like-minded Member State with whom we share fundamental values of a rules-based, cutting the red tape, open and sustainable trade policy. The second, we respect the UK’s decision to withdraw from the EU.
We were pleased that negotiations on the Withdrawal Agreement and Political Declaration were concluded already in November so that we would have enough time to complete ratification procedures. The negotiations were – to be honest – difficult, but the end result is what matters.
We have the best possible agreement on the table. I still hope that the UK would be able to ratify the agreement as soon as possible.
What is not good for Ireland is not good for the EU. It is fantastic to see how a small member state gets the support it needs from Brussels. We have given reassurances to the so called “backstop”. Now we must stand behind our commitments. This is an issue of utmost importance to Ireland and the Irish people on both side of the border. But it is also important to the whole of Europe. We must not underestimate current value of the Good Friday Agreement. The recent bombings in Londonderry remind us of the dark side of the Irish history. Finland is firmly committed to work speedily on a future agreement that establishes alternative arrangements, so that the backstop will not need to be triggered.
Why it is important to ratify the Withdrawal agreement? First, the agreement enables both companies and the UK and EU citizens to make use of the transition period of two years. There will be no changes for companies and citizens during that time. The current Single Market conditions will prevail. Second, we will be able to negotiate the future relationship. We are more than willing and ready to develop our relations on a new basis. All this means that only one transition would occur for companies – that has been one of the most important argument for Finland.
If the UK parliament will NOT ratify the agreement, the UK should as soon as possible clarify their position. Time is running. I hope that we can still find a workable solution, which is acceptable for all sides. But, as I said before, reopening of the Withdrawal Agreement is nor the way out.
If the UK will not come up with a clear plan, we might end up in a situation the UK exiting from the EU in the end of March without an agreement. Nobody wants a “no deal” outcome. There would be substantial negative economic consequences for both parties. The UK would suffer much more.
According to calculations of the Bank of England the UK’s GDP would drop by 9 percentage in a “no deal” situation. Among the Member States, the most affected countries would be Ireland, the Netherlands, France and Germany.
A no deal scenario would be the worst possible option for Ireland - and the Irish border that does not exist so far. Let's be prepared for the worst but hope for the best.
Recent studies show that the Irish economy would be seriously affected if the UK crashes out of the EU without a deal. For example ESRI (Economic and Social Research Institute) has warned that a no deal Brexit may halve Irish economic growth. (Forecast for this year 4-6 %)
Finland is less integrated with the UK economy compared to some other Member States why our trade would not be affected that strongly. However, there will be negative direct and indirect effects on Finnish business as well. Forestry is one of those sectors; about one third of our exports consist of forest products.
In a “no deal” scenario there will be a hard border between the UK and EU the one we have now with the United States. There will be customs procedures including duties and taxes for companies to pay. More time will be required for border and customs requirements. There will also be an impact on logistics, value chains and transfer of intra-company personnel. The level of prepadness in Finland is good. There is lot of information available on prepadness issues in Government’s website and more information will be posted soon.
It is important that all companies trading with the UK directly or indirectly are preparing for the UK leaving the EU whether in the end of March or after transition period in 2021.
We should not forget the fact that the UK wants to leave the Single Market. Status quo will not continue. There are no other arrangements with a third country that would correspond with the benefits of Single Market and four freedoms.
Regarding possible models for a future relationship, the UK has stated that they want to negotiate an ambitious free trade agreement with the EU. Terms of trade agreement are far from the treatment what the Single Market provides for companies or citizens.
For us better choice would be the European Economic Area - the arrangement we have with Norway. So far they have turned it down.
To conclude, the choice is, of course, in the UK’s hands. We are waiting for PM May’s next move on Brexit issue.