Manufacturers, supermarkets and farmers’ groups in Northern Ireland have combined to make a plea for a transition period beyond 1 January 2021 to allow them to get to grips with the complexities of post-Brexit trade in and from the region.
The reason? They won’t be able to prepare for the new rules in time for the New Year – because even now the new rules have still not yet been fully agreed.
Critical issues relating to trade between Great Britain and Northern Ireland and vice-versa have yet to be worked out by the Joint Committee responsible for implementing the EU-UK Withdrawal Agreement commitments on Northern Ireland.
Meanwhile, the IT systems necessary to allow the complex new rules to function are not yet in place.
“The Northern Ireland business community will not be ready for 1 January,” stated Stephen Kelly, Chief Executive of industry group Manufacturing Northern Ireland, at a hearing on Wednesday (18 November) of the House of Commons’ Future Relationship with the European Union Committee.
“Quite simply, it doesn’t have the detail nor the time required. With the best will in the world, in six weeks [before the end of the Brexit transition period] we won’t get there,” Kelly insisted.
‘Goods at risk’ questions
Under the UK-EU Withdrawal Agreement, Northern Ireland, which is part of the United Kingdom, will de facto remain in the EU single market for purposes of trade in goods. This is to prevent the need to install any infrastructure on the politically totemic border between Ireland and Northern Ireland.
But this has led to a requirement for tariffs to be provisionally applied on any goods transported from GB to NI which may be ‘at risk’ of subsequently moving across the border to Ireland, and hence into the EU.
The Specialised Committee on Northern Ireland, which operates under the control of the EU-UK Joint Committee, has yet to provide any clarification on how this goods at risk system would function in practice.
This is in part because it still remains unclear at present whether or not a zero-tariff EU-UK trade deal can be reached. The situation would become much less complicated if tariffs are abolished, although GB-NI controls may still be required for any products for which the UK’s external import tariff is markedly lower than that in force in the EU.
Veterinary and sanitary controls
Moreover, there is still a lack of clarity over how processes such as veterinary controls would be applied on GB-NI trade in livestock products.
Until and unless clarified to the contrary, this could even apply to UK supermarkets supplying their retail outlets in Northern Ireland from warehouses in Great Britain.
“We still don’t know how sanitary and phytosanitary checks will work,” Aodhán Connolly, Director of the Northern Ireland Retail Consortium, told the same meeting.
“EU export health certificates can cost up to £200 per time,” Connolly added. “Over 90% of freight transportation movements from GB to NI are composite loads, with up to 1,500-2,000 products on board. Of these, typically 300-400 are products of animal origin. That could mean tens of thousands of pounds of extra costs per consignment.”
Two years’ IT infrastructure work condensed into six weeks
Equally concerning to businesses in Northern Ireland is the fact that the port infrastructure and the accompanying IT systems needed to handle goods trade under the new rules are still not in place.
“If we were doing this as a business we’d be rolling out these fundamental IT and structural changes over a period of about two years,” Connolly said. “We’ve actually got less than six weeks to get this done. Some of the necessary IT systems won’t be ready until about a week before.”
Showing evident frustration at the current situation, Connolly echoed Kelly’s call for more time for businesses to prepare.
“We won’t be ready for 1 January. I know that there is sensitivity about the terminology used, but we need an implementation period. You can call it an adjustment period, you can call it the pink fluffy bunny period if you like, we don’t care as long as we get the time to be able to move forward on implementing these fundamental, structural changes.”
Victor Chestnutt, President of the Ulster Farmers’ Union, also stressed that there was no time to prepare for the changes that lay ahead.
“We were only advised two weeks ago that all Northern Irish farms would need a special EORI [Economic Operators Registration and Identification] number in order to trade our goods,” he told MPs. “To get that number, applications should be made by 23 November – that’s next week.”
In search of goodwill and flexibility
A short implementation period allowing for a phasing-in of the new bureaucratic processes involved with trading goods between Northern Ireland, Great Britain, the EU and the rest of the world should be technically feasible, provided there is goodwill on both the EU and UK sides.
Unfortunately such goodwill is not much in evidence at present. The European Commission is still currently pursuing legal action against the UK for clauses in the draft UK Internal Market Bill which seek to facilitate NI-GB trade, but which, by the UK government’s own admission, contravene parts of the EU-UK Withdrawal Agreement.
At its last meeting on 5 November, the Specialised Committee reported that progress had been made on some of the issues relating to Northern Irish trade, such as provisional agreement on the UK’s part that EU representatives may be present when UK authorities implement checks and controls on goods arriving into Northern Ireland from Great Britain.
But key issues such as the functioning of Border Control Posts in Northern Ireland and the ‘goods at risk’ question remain on the agenda for future meetings of the committee. The next one is currently scheduled for ‘the second half of November’.