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Brexit bureaucracy hits GB to Northern Ireland trade

[ December 9, 2021   //   ]

Most aspects of Northern Ireland’s trade are working well – with the exception of movements from Great Britain to the province, Manufacturing NI chief executive Stephen Kelly told a session of the House of Commons International Trade Committee on 8 December. “GB suppliers were wholly unprepared to ship to Northern Ireland. This is where all the friction and contention is,” he told the gathering of experts and MPs.

Businesses needed stability so they could plan longer term and trade needed to be made as seamless and affordable as possible, Kelly argued.

Director of the Northern Ireland Retail Consortium, Aodhán Connolly confirmed that there were problems with trade from GB and NI, with the result that supermarkets in the province had started to source more goods locally. There were however limits to this process and retailers were in any case keen to continue their supply chains with GB as they had a long history of trade and also because their buying power was concentrated there.

Stephen Kelly said that he hoped that some of the problems would prove to be teething troubles as the trade got to grips with the new situation, adding: “There is no logical reason why NI-destined goods should be subject to full customs controls.”

Connolly said that more leeway was needed to remove trade friction and that he hoped that continued talks would achieve this. A ‘trusted trader’ green channel type scheme might be one way of removing many checks, particular SPS checks, at least for certified, audited traders. He added that Northern Ireland had suffered because its trading arrangements had been shoehorned into a model that was really intended for trade between the EU and New Zealand or Switzerland.

Stephen Kelly said that it should be possible to introduce easements for traders who, for instance, could demonstrate that they do not trade with the EU or who did less than a stipulated amount of business there. This is something that could be put into place quite quickly, he argued.

Continuing the discussion, Queen’s University Belfast professor of political sociology, Professor Katy Hayward said that a fundamental political dichotomy was at work: “The UK does not see NI as posing a risk to the Single European Market whereas the EU sees it in terms of principles.” There would have to be compromise between the two sides if progress was to be made. Later in the session, fellow academic, Dr Esmond Birnie – a senior economist at Ulster University – pointed out that the threat posed by Northern Ireland to the EU single market was minuscule, being the equivalent to just 0.1% of the latter’s total trade. “It shouldn’t be seen as an existential threat” he argued. However, it was possible that some European leaders were trying to make political capital be exaggerating the issue, although he hoped that eventually economic realities would override rhetoric.

Dr Birnie also pointed out that the existing arrangements were a drain on public finances. The Trader Support Scheme and other UK Government support for traders were costing around £250 million a year and an issue was how long these were likely to remain in place.

In the long term, the EU might soften its stance on maintaining the principle of the Single Market; on the other hand relations could deteriorate to the point of creating a full scale trade war.

Professor Hayward said that while politicians involved in negotiations threatened from time to time to trigger Article 16 and bring the NI protocol to an end, it was unclear what this could achieve and it was unclear that it would actually remove any existing customs checks.

However, Stephen Kelly concluded, despite all the bureaucratic problems, businesses was continuing and in fact NI manufacturers’ order books were full. A pharmaceutical firm had also announced the biggest investment in the province wince the ill-fated government-backed DeLorean car plant of the early 1980s. But, said Aodhán Connolly, it was important that, until a final settlement was reached, it was important to hold both the EU and the UK government to account.

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