Updated: Oct 20, 2021
The NI Protocol is yet again predominant in the media with UK and EU submitting new proposals on how to improve the current arrangement, however, there are a few key issues that remain difficult.
So, whilst we have covered the NI protocol numerous times in the last 18-24 months, let's start of the basics for those who may be first time readers of our blogs. NI Protocol was the arrangement that enable the UK leave the EU whilst enabling Northern Ireland remain in the single market and instead placing a 'hard border' between Great Britain and Northern Ireland.
What this means is that customs controls and border checks take place when goods move between GB into NI. This was not by any means a perfect arrangement but one that help minimise some of the disruptions that our exit was due to bring on Northern Ireland.
So what are the stumbling blocks on the current discussions?
1. The Role of the European Court of Justice (ECJ)
David Frost's New NI Protocol Proposal is to end the ECJ role in policing that EU law is followed in NI. However, there is a push back from the EU as expected.
The Daily Mail reported that a potential compromise could be either restrict ECJ's role and turn to it only as a last resort, should an independent arbitration panel does not reach a solution. However, this may also block dialogue between the UK and the EU.
2. Customs Checks
The introduction of customs check has already created disruptions in movement of goods between GB into NI. Earlier in January, The Chamber had a number of traders who had decided to stop altogether trade with NI until they were able to understand better the new customs and costs of sending goods there. Many traders selling on DDP, meant they were faced with doing customs clearance in NI on goods they were sending from GB - meaning having to get an XI EORI number amongst other requirements and do customs declarations. Although there has been an option for simplified declarations.
Other traders have also opted for applying to the Trader Support Scheme if their goods were not considered to be 'At risk' to move to either Ireland or rest of the EU, so goods with GB originating status were not subject to import duties and VAT. Whilst this meant to facilitate trade, anecdotal feedback from companies the Chamber dealt with, it was clear that some traders found it confusing to say the least.
According to The Daily Mail, proposals submitted by the EU last week 'offered to reduce 80% of the regulatory checks and significantly cut down customs processed on goods moving to NI' but the UK has kicked back saying 'it still falls short of what is needed'.
3. Sanitary and Phytosanitary checks
The Guardian also alluded to this on their 12th October Article 'What next for the Northern Ireland protocol? Health checks on plants, meat and dairy products is of obvious concern and on this front, the article says 'The EU has previously offered, even on a temporary basis, to negotiate a system whereby the UK follows Brussels rules and almost all the checks can be lifted. The UK has rejected this approach as it impinges on the government’s ability to make its own rules'
GM Trade with Northern Ireland & Ireland
According to the most recent available data from HMRC and ONS (up to 2019), Ireland is GM's 2nd largest export market for goods. In 2019, over 1400 companies in the region were exporting £680million, and between 2016 & 2019, exports had experienced a 14% growth.
Whilst we have data about export values to Ireland from Greater Manchester as of 2019, we yet do not have clarity on how much of that trade may be going via Northern Ireland. 'Purchases from GB into NI' accounted for £13.4 bn in 2019, and considering Ireland continues to be NI's top export market, we would like to understand in more detail movement of goods between GM and Ireland and Northern Ireland.
We are therefore calling traders in Greater Manchester and North of England to help us understand current trade flows by completing this short 60 seconds survey. We will run it for over a month and will share results in late November/early December.