Charles Flanagan, Minister for Foreign Affairs and Trade, Ireland HARDtalk

Welcome to HARDtalk from Dublin. I am Steven sack cur, Ireland has

bounced back from the financial crisis of 2008, but now it is become

swept by a new wave of apprehension, and this time it is all about

Brexit. Because when Britain leaves the European Union, Ireland will

suffer significant collateral damage, in terms of job, trade and

the status of its borders. My guest is Ireland's trade and Foreign

Ministerer Charles Flanagan. Will Brexit have catastrophic

consequences? Across the Irish Sea. Charles Flanagan,

welcome to HARDtalk. Let me begin with some

words from your boss, He said Brexit represents

the greatest economic and social challenge to this

island in 50 years. Now, he said that some time ago, not

long after the British referendum. Do you feel that way

about Brexit today? The withdrawal of our neighbours,

the UK, from the EU is potentially It certainly wasn't the result

we expected or wanted. We're very disappointed,

but we've got to deal with the cards This is potentially very damaging

for the equilibrium of Europe. The market of 550 million

people, the great peace And with Ireland, as the nearest

neighbours of the UK, in the event of there

being adverse consequences, well then we're most likely

here to suffer most. That must make you very

angry, doesn't it? That here you are, unable, really,

to have an influence over an event That here you are, unable, really,

to have any influence over an event which could be catastrophic

for you and your country? We're not so much

angry as disappointed. That's why in the context

of the negotiations that are about to begin, we are anxious

to impress upon everybody, our friends in the UK,

our family in the EU, that this needs to be handled

in an orderly manner. Some of the preliminary jousting has

not been in that direction. That said, we have to look forward

now to the negotiations being conducted in a way that

ensures that the parties remain around the table and that these

negotiations, this challenge, is dealt in a way that ensures

there is a deal at the end. Let's talk with your trade minister

hat on, as well as Foreign Minister You, more than anybody else

in Ireland, I dare say, are aware of the reliance of Ireland

on the two-way trade of the UK, worth something like 60

billion euros every year. Your own economic forecasters say

that if there is a hard Brexit it is going to cost your economy

tens of thousands of jobs, possibly 4% of GDP over the next

ten years, if not more. This is one of the greatest

challenges that we have faced as a state since our

independence in the 1920s. Certainly the challenge

of my generation and I believe Certainly the challenge

of my generation, and I believe it's important therefore

that the Irish priorities are very much to the fore

in the context of We are very much reliant

on our neighbours in terms of our agri-food and beverage

business, in particular. Ireland, over the centuries,

has been the bread basket or the main food supplier

of Great Britain. But we haven't had all

of our eggs in one basket. Our membership of the EU has

ensured that we have And while you speak very highly

about our trade relationship with Britain, our trade relationship

with our European colleagues But that's not to say I'm

by no means underscoring or underplaying our

relationship with Britain. No, and this is what

you said recently. You said, on Brexit,

resolving Irish issues is absolutely crucial and the EU

and the UK must show real and positive goodwill because,

this is the key phrase, But patently no deal is an option,

because Theresa May has told us that she would rather walk away

with no deal than sign up Yes, but I think undoubtedly

the worst of all relationships between the UK and the

European Union is no deal, because that would mean a reversal

back to old trade organisation routes and regulations and I can't

for the life of me see how that could be appropriate or suitable

or advantageous to Britain It certainly wouldn't be

the Ireland because your livestock producers

would be killed by that. So much of their trade

is with the UK and if, as I understand it, you reverted

to WTO rules and tariffs on meat exports, Ireland's industry

would be decimated. Accepting that and also

looking beyond trade, No deal, in the event

of there being a UK withdrawal from the talks, what happens to UK

citizens in their millions, What happens to EU citizens

in their hundreds of thousands enjoying life and work

and benefits in the UK? So, to my mind, no deal,

or a walk out, or a difficulty that will not result in a settlement

is the worst of all options and that's why, again,

I have to stress the need on all parties to ensure

that the process commences in an orderly way,

with a set agenda. And from the Irish perspective,

one of our priorities will be and must be that there is as close

as possible a relationship In essence, you are saying

to your European colleagues who are dealing with

the Brexit file, please don't have the mindset of punishing

Britain, because if you punish Britain you're actually

going to punish Ireland too. Acknowledging the Irish priorities

has been my job as foreign minister. I have a constitutional

duty to the Irish people And what I've been saying

to my EU colleagues is that this This should not be exacting

retribution on any of its members, in particular the UK,

for leaving the family. This needs to be dealt

with in an orderly manner but acknowledging that it's

a very, very serious If one is to get to the specifics

of the challenges, perhaps the biggest of all is what on earth

to do about the more than 400 kilometre long border

between your country and Northern Ireland, which of course

is part of the UK. What is going to happen

on that border? Are there going to be border posts,

walls or fences and customs officials checking every

person and vehicle crossing your border

with Northern Ireland? We don't want our relationship,

the relationship between the UK and Ireland,

which has been carefully nurtured to the peace process,

with particular reference to East-West relations,

between Dublin and London that are on the warmest and most

positive footing since our We don't want anything

to happen that will disrupt or damage that

positive relationship. I'm sorry, but something

is happening that is disrupting all of that and it is called Brexit

and you have to live It is going to happen

and you are going to have to cope with it and it does mean that

after Britain has left, and Theresa May says

there will be no membership of the single market

or the customs union, there's going to have

to be a meaningful border between your country

and Northern Ireland. One of the most critical elements

of these negotiations, and it was identified

by Prime Minister May and by Commissioner Barnier

and my Commission Juncker, in fact by all of the dispatches

leading up to the start the unique and particular

circumstances on the island of Ireland have been

appreciated and acknowledged. We've enjoyed what has been an open

border since the peace process, since the historic Good Friday

peace agreement of 1998, and I believe it's essential

in the context of these negotiations Well, let's just negotiate matters

forward and that's why I'm very pleased that Commissioner Barnier,

the chief negotiator, I've had the Luxembourg Foreign

Minister at the border a few weeks I believe it's important that EU

leaders and negotiators see the critical progress that has been

made in terms of people to people relations and peace

on the island of Ireland. Yes or no - do you believe

it is tenable, possible, that border posts and fences

could go up along the border? I say no to border

posts and no to fences. But I'm not saying anything

fundamentally different to what I'm hearing

from Prime Minister May, from Secretary of State Davis,

from the Foreign Secretary and from my colleague,

Secretary of State Brokenshire. I believe we have to work

with the EU to ensure that the open border between Ireland

and Northern Ireland remains, on the basis that 30,000 people

cross every day to work, that doesn't include

people going to sporting That open border is a must

in all circumstances. I'll tell you what I'm

hearing from some quarters, the idea that Northern Ireland

could in some way get special dispensation,

whatever the wider agreement between the UK and EU

in terms of Customs, Northern Ireland could

in essence be the same customs area as your

country, Ireland. If that were to be the case,

the defacto, real, sort of, trade border between the island

of Ireland and the rest of the UK would be the Irish Sea

and it would be at airports that the real regulation

and monitoring and checking would take place, going

into the rest of the UK. Is that possible from

your point of view? I'm not going to get

into the endgame now, but in two years' time I think

it is important that we have whatever framework to ensure

that the peace process on the island that the very positive trading

relations between the north and south is not disrupted and we

can ensure the border is open. That would mean looking at advanced

technological devices, to ensure if there are to be checks

for goods and services that they can take place in a way that doesn't

disrupt traffic between Ireland, And when we talk about the peace

processes it is important to note the positive role the EU had

in framing that peace process and it's another reason

why I very much regret and am very saddened

at the withdrawal of the UK when I acknowledge the role the EU

played, in conjunction with Ireland and the UK, in having

our peace process. So you talk about the benefits

of the EU in furthering the Northern The leader of Sinn Fein,

Gerry Adams, says first of all he fears that

taking, this is a direct quote, taking Northern Ireland out

of the EU could destroy the peace Second, he says, look,

now is clearly the time, given the possibility

that the island of Ireland may find a solution, particularly

to this Customs problem, by some sort of

integrationist approach. He says the time is coming

where we need to ballot the people of the north on whether in fact

the time has come to consider unification of the

island of Ireland. I don't believe we should conflate

the issue of the unification of Ireland with the withdrawal

of the UK from the EU. But a clear majority of the people

in Northern Ireland voted to stay Is that for you, in the Irish

government, that has been committed to the long-term vision of uniting

the island of Ireland, is it not a wonderful

opportunity for you to say to the people

of the north, think about it? Think about having a vote on joining

us, because then you can stay in the EU, all of these problems

disappear and we will be as one? I'm sure the people

of Northern Ireland think about these issues all the time,

but I'm at one with the Secretary of State Brokenshire

and his colleagues in the British government, when we adhere strictly

to the letter of the Good Friday It states that a border poll

will take place at some stage in the future, when in the opinion

of the Secretary of State for the time being of

Northern Ireland that I believe we have a significant

challenge, the greatest challenge of my generation,

in dealing with the withdrawal of the UK from the EU

and the consequences for the island of Ireland, especially

Northern Ireland. So I don't believe that a debate now

on the merits or otherwise of a united Ireland

is timely or appropriate. Well, I'm just asking

you a different direct question now. Leaving aside your belief

that there is no time right now for a border poll, as you call it,

a vote in Ireland or a vote to consider reuninification,

do you believe, quite simply, that Brexit makes the long-term

prospect of a divided Well, I think it has people thinking

about it in perhaps a way they have But I'm concentrating

now on the job at hand, which is withdrawing from the EU,

and the adverse effects, as I don't see an upside

for Ireland... I think the Unionists will listen

to this carefully and feel once again Dublin is looking

for an opportunity to talk about I acknowledge the primacy

of the Good Friday Agreement and I acknowledge that now is not

the time to talk about border polls I am saying the unique circumstances

on Ireland need to be acknowledged. For example, there are

1.8 million people. Under the Good Friday Agreement,

it is accepted that each of those people is allowed to declare

themselves as British, And those who declare themselves

as Irish are entitled If you are entitled to an Irish

passport, you are by definition And if you are an Irish citizen,

in the post-Brexit UK, you are entitled

to an EU citizenship. That will need to be resolved

in the negotiations. Everyone living in the area outside

of the EU, keeping in mind the fact that we are withdrawing from the EU,

accepting that Ireland is part of the UK, and everyone

is entitled to EU citizenship, that in itself warrants unique

and special circumstances to take It is one of those special

challenges of the negotiating I want to think about Ireland's

position in the world, not through the prism of Brexit,

but the way both the EU and your other key partner in trade

and foreign affairs, the US, have changed

in the recent past. Let's start with the US,

your biggest trading partner by far. Donald Trump believes

in protectionism, Donald Trump It is a fundamental challenge

to Ireland's economic model, is it not, which has been built

around using very low taxes, particularly corporate taxes,

to attract business, especially from the US,

to base itself here in Ireland. And Donald Trump does not

want that to continue. Well, of course, as Foreign

Minister, I don't meddle in other jurisdictions, be it

Northern Ireland or the What we offer, in terms of a base

for American companies here in Europe, is the most dynamic,

enthusiastic, and youngest Well, you know what you offer them,

we all know what you offer them, Donald Trump is now saying he wants

to cut corporate taxes Your crucial competitive edge

which has driven the Irish economic recovery since the meltdown crash

of 2008 and is being taken Our competitive edge on our EU

colleagues and others is not exclusively ore merely

in the area of taxation. It is the adaptability

of our workforce and the skills Dublin is repeatedly voted

among the top European... You may think that,

Minister, but look at... The record could be looked

at in different ways. Look at the legal case in Europe

about Apple and the way in which Ireland taxed Apple,

one of the most successful You know, you let Apple

put their profits in this country, and you taxed them at a rate

that was less than 1%, And the EU said this

is not acceptable. The wind has changed and you're not

going to get away with it any more. Ireland offers no favourable tax

deals to any corporations, What you speak of is an analysis

by the European Commission. We respect the European Commision,

but we fundamentally They asked you to tax Apple for 13

billion euros' worth of tax which they said you had

deliberately failed to extract It was to simply give them

the tax break to keep them It was analysis from

the European Commission. We have appealed to the European

Court in order to get a legal We are satisfied and confident

that the Irish position will be We offer no sweetheart

deals to any company. How can you say that to me

when you know the real tax rate you imposed on Apple was an absurd

0.05%, or something. We set our own corporation tax rates

like any other EU country and like Donald Trump does.

Do you like the fact that Ireland is now seen as a tax haven

across Europe which offers sweetheart deals and unfair breaks

Ireland always cooperates with international actors

in the event of difficulties, challenges and adverse opinions.

But for many years we have been in full cooperation with,

And we have changed some of our revenue practices.

The ones you mentioned are from the 1990s, over

So, you acknowledge the wind has changed?

We acknowledge we need to engage with...

I'm sure, as Foreign Minister of Ireland, I'm sure you are aware

that the new President-Elect of France, Emmanuel Macron,

has said he sees the EU's direction of travel as towards a unified

Treasury, unified tax and fiscal policies across the European Union.

That's a very clear message to a country like Ireland that

you will not get away with this anymore, of being the tax

That is exactly what President Sarkozy said a number of years ago.

We very much welcome the presidency of Emmanuel Macron.

We very much look forward to working with him.

And if there are issues around moving forward as a European family,

of course, Ireland will fully engage in that process.

It will drag its heels and say "absolutely no way."

To come back to the point that you managed to recover

from your terrible economic meltdown by using an extraordinarily quote

unquote "tax regime," the way things are looking for Europe today

and the direction of travel, that will not be tenable

Ireland will have to find a new way of becoming a successful economic

Ireland, being a small and open economy, is subject to international

trade winds and the winds of adverse economic policies from time to time.

Irish people, more than perhaps anyone on the planet,

have shown themselves to be incredibly resilient

We will do the same as far as Brexit is concerned.

You must be aware of the winds of populism blowing

In fact, your Prime Minister went on St Patrick's Day

to the United States and lectured Donald Trump about the dangers

of what he is doing in the United States,

especially with travel bans and building walls.

But it is not just there, it is in Europe too.

Ireland is a small country with an open liberal approach

It will have a real problem, won't it, as this trend

towards protectionism, building walls, keeping

In fact, challenge is the spice of politics.

No one in any jurisdiction escapes being in the position to take

Look at recent elections across Europe, the Austrian

election, the Netherlands and their election.

There has been a push back against populism.

In Ireland we are operating in the most minority

My message to people is there are complex issues

and difficult challenges out there in terms of international

trade and international relations, and international security,

an issue which we have not an opportunity to

But ultimately, I believe there are no simple answers,

simple solutions, to very complex questions, and I believe the centre

must hold in Europe, and the centre must hold in Ireland.

I don't have immediate answers to all the complex challenges.

But I don't believe that the answer lies in populism.

And I don't believe in 2017 that attempting to regress

the globalisation of the last number of years is going to work.

Charles Flanagan, we must end it there, but thank