Northern Ireland’s post-Brexit ‘protocol’ hurts some, a boon to others

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  • The Northern Ireland Protocol was part of Britain’s divorce deal with the EU
  • The arrangement effectively kept Northern Ireland in the single market
  • Ease of doing business in the EU creates a boom for some manufacturers
  • But extra checks on goods from the rest of the UK hit consumer businesses
  • Britain says it will scrap parts of protocol if EU doesn’t change

BALLYMENA, Northern Ireland, June 28 (Reuters) – Irwin Armstrong, former chairman of Boris Johnson’s Conservative Party in Northern Ireland, has a simple message for the British Prime Minister regarding the province’s unique trading rules after the Brexit: not spoiling a good thing.

The founder of rapid diagnostic test maker CIGA Healthcare, who campaigned for Britain to leave the European Union six years ago, has described the so-called Northern Ireland Protocol as a game-changer for manufacturing companies like his.

Under the protocol, which is part of Britain’s withdrawal agreement from the EU, Northern Ireland effectively remained in the EU’s single market for goods while the rest of the UK (UK) left last year.

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Since then, CIGA has won business from red tape-bound UK exporters, expanded into new EU markets and doubled sales across the open border with EU member Ireland. .

“My message to Boris Johnson on protocol is ‘sort out what needs to be sorted out and leave the rest alone’,” Armstrong said at his Ballymena factory, calling the arrangements a “win-win-win” situation.

However, the protocol is far from universally popular.

Its aim was to avoid a land border with the Republic of Ireland that many would see as contrary to the spirit of a peace accord 24 years ago that ended three decades of violence between mainly Catholic nationalists seeking unity with Ireland and Protestant Unionists wanting to remain part of the UNITED KINGDOM.

But the perception that by placing an effective border in the Irish Sea the protocol is eroding Northern Ireland’s place in the UK has drawn the ire of many pro-British trade unionists, which Britain says Brittany, also undermines the 1998 peace pact.

Johnson has pledged to scrap large swathes of the protocol within months if he fails to convince the EU to remove checks on goods entering Northern Ireland from the rest of the UK. Read more

BUREAUCRATIC BARRIERS

Northern Irish business groups have urged London not to act unilaterally, fearing that the trade war it could start with the EU could remove new competitive advantages enjoyed by companies such as Armstrong’s. Rather, they want both sides to agree to ease controls affecting other more consumer-facing businesses. Read more

Before the protocol, it took Lynas Foodservice, a major food supplier in Northern Ireland, seven days to order a product like mozzarella cheese from its usual UK supplier. Now it can take up to 14 and require eight different documents.

Longer lead times mean the Coleraine-based wholesaler has to hold more working capital – £11m compared to £10m previously. With UK suppliers also charging more per pallet for the hassle on their end, the costs are passed on to retailers.

Lynas has stopped trading with 13 of the roughly 200 UK suppliers it previously relied on, and sources more from Ireland and ships others via Dublin to avoid some of the bureaucratic trade hurdles.

“I’m okay in a 650-employee business adding that cost and working with our customers, but I think for a lot of smaller businesses it’s definitely been more difficult,” chief executive Andrew Lynas said.

TWO-SPEED ECONOMY

Recent data showing that, alongside London, Northern Ireland is the only region in the UK where economic growth has exceeded pre-pandemic levels has led to some suggestions of an economic rebound fueled by the protocol.

Ulster Bank’s chief economist for Northern Ireland, Richard Ramsey, says it’s not that simple as the economy entered the COVID-19 pandemic in a weaker state than the rest of the UK and has benefited disproportionately from record public spending with one in four people employed in the civil service.

“The protocol is presented as almost binary, either it’s extremely good or it’s terrible and should be removed,” Ramsey said. “The reality is that there are good parts and there are a lot of gray areas that still need to be ironed out.”

For now, this has created a two-speed economy, he says, with sectors such as food and pharmaceutical manufacturing booming at a time when economic surveys in May suggest the crisis in the cost of Life hits Northern Ireland harder than most parts of the UK.

In the small town of Maghera, Crushing Screening Parts (CSP) owner Michael McGrath says the “good parts” of the protocol are directly responsible for a 32% increase in year-over-year revenue and plans to further increase its staff by eight people. .

Glancing at a screen showing potential customers from Poland and Germany browsing CSP’s website, which emphasizes the benefits of the uppercase protocol, McGrath says he can deliver a piece to them. the next morning when he can take a rival British supplier at least two to three days.

As a result, the quarry parts manufacturer’s share of sales to the EU more than tripled to 33%. For McGrath, the solution to the protocol conundrum lies in Bill Clinton’s famous words 30 years ago: “It’s stupid economics.”

“For Northern Ireland to succeed, it all depends on the economy,” he said. “The economy can do really well if the protocol is implemented correctly and at a level that we can all live with.”

(This story refiles to add a deleted word in the title)

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Additional reporting and writing by Padraic Halpin; Editing by Alex Richardson

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