The UK government’s plan to change parts of the Northern Ireland Protocol to, it claims, make trade between Great Britain and Northern Ireland easier has met with a guarded approach from industry bodies.
One has predicted the unilateral action will result in “a summer of bickering and dispute actions between the UK and EU”.
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By GlobalDataUK Foreign Secretary Liz Truss told the House of Commons today (17 May) she intends to introduce legislation in the coming weeks to make changes to the Protocol, which was part of the Brexit separation agreement when the country left the EU in January 2020.
The Bill will include separate “green” and “red” lanes for goods travelling between Great Britain and Northern Ireland, with those destined to stay within the UK heading down the green lane, freed from EU-level checks.
The Protocol was agreed to ensure there would be no hard border on the island of Ireland but, to protect the EU’s border integrity, Northern Ireland has effectively remained in the EU as far as trading with the UK mainland is concerned.
This has created significant additional paperwork and checks for companies exporting from GB into Northern Ireland. It has also caused a political impasse with the Unionist parties in Northern Ireland refusing to engage in the political process while the Protocol is in place, arguing it treats territory differently from the rest of the UK population.
Even though Prime Minister Boris Johnson’s government agreed to the settlement, it has now decided to take unilateral action to make it more acceptable to the Unionist population and to ease trading restrictions.
Truss said today: “As the House will know, the Protocol has not yet been implemented in full due to the operation of grace periods and easements.
“However, EU customs procedures for moving goods within the UK have already meant companies are facing significant costs and paperwork. Some businesses have stopped this trade altogether … producers face onerous restrictions, including veterinary certification, in order to sell foodstuffs in shops in Northern Ireland”.
She said: “The bill will remove regulatory barriers to goods made to UK standards being sold in Northern Ireland. Businesses will be able to choose between meeting UK or EU standards in a new dual regulatory regime.”
Truss revealed planned new initiatives include a trusted trader scheme to provide the EU with real-time commercial data, “giving them confidence that goods intended for Northern Ireland are not entering the EU single market”.
Commenting on the Government taking unilateral action rather agreeing changes with the EU, she said: “Our preference is to reach a negotiated outcome with the EU. We have worked tirelessly to that end and will continue to do so.”
Truss added the UK remains open to further talks with the EU “if we can achieve the same outcome through negotiated settlement”.
But responding to the announcement, Maros Sefcovic, vice president of the European Commission, pointed out the Protocol was “the result of long and intensive discussions between the EU and the UK”.
And he warned: “Should the UK decide to move ahead with a bill disapplying constitutive elements of the Protocol as announced today by the UK government, the EU will need to respond with all measures at its disposal.”
Trade groups covering the food and retail sectors appear to be still weighing up whether the UK government’s action is a good move or not.
Nick Allen, CEO of the British Meat Processors Association, said: “The Government introducing legislation to grant itself unilateral powers to change the Protocol this week will probably spark a summer of bickering and dispute actions between the UK and EU.
“If the legislation is passed, the Government will need to decide if, when and how to use those powers. In the meantime, the food supply chain will have to continue dealing with the current bureaucracy and trade friction.”
He added: “A digitised system to streamline customs procedures that is fit for purpose and capable of integrating with the systems of our trading partners is something that should be a priority for both sides in these discussions’’.
Dominic Goudie, the Food and Drink Federation’s head of international trade, said: “The Northern Ireland protocol has brought increased complexity and cost for businesses moving food and drink within the UK. We urge the UK government and the EU to redouble their efforts to find a mutually acceptable solution to moving goods in and out of Northern Ireland and to work closely with industry on both sides of the border in doing so.
“There are pragmatic, business-friendly ways of addressing the problem, which recognise the very high standards of UK food and drink and which would protect essential trade between Great Britain and Northern Ireland while safeguarding the EU’s single market.”
A spokesperson for the Northern Ireland Business Brexit Working Group – which includes the Northern Ireland Food & Drink Association – said: “While we are frustrated with the ongoing failure to resolve the outstanding issues, it is our shared view that anything other than a negotiated outcome is sub-optimal.
“Against the background of a cost of living and cost of doing business crisis, it is incumbent on the EU and UK to recommence discussions without delay. It will require movement and compromise on both sides to secure the workable and lasting solutions we all need to see.”
Trade Northern Ireland added: “It is the express wish of our members, and the wider Northern Ireland business community, that a way forward is found between the UK government and the EU that works for all, and that negotiations continue without delay as businesses are working against the cost of living crisis, which is only increasing the cost of doing business.
“We cannot continue on in this phase of doubt and instability. Solutions must be found which work for Northern Ireland’s businesses and the wider economy. We urge both the UK government and the EU Commission to find a common agreement and work to steady the current uncertain landscape.”
And Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “Consumers in Northern Ireland need long-term stability based on an agreement which gives the EU the controls they need to ensure there is no leakage into the single market and also ensures GB-NI trade is administered in a way which avoids unnecessary and unaffordable costs for retailers and their consumers in Northern Ireland.
“We believe that the traceability and IT controls that retailers use can demonstrate that products remain in Northern Ireland. In the immediate term, it is crucial we maintain the use of grace periods which have avoided unnecessary costs for retailers doing everything they can to control food price inflation.”
