The Many Brexit Unknowns

2nd Jun 2020

By Ian Henry, President, Northern Ireland Chamber of Commerce and Industry.

As businesses continue to deal with the fallout from COVID-19, arguably the biggest economic shock on record, they also face another mammoth task over the next six months – the ending of the Brexit transition period.

With many unknowns in terms of agreeing, understanding and implementing the way in which Northern Ireland will trade with the EU and the rest of the UK in the future, all efforts must be made to avoid unnecessary risks and costs to Northern Ireland businesses and to urgently provide them with the information that they require to start planning.

On the 20 May the UK government produced a ‘Command Paper’ setting out its approach to the Northern Ireland Protocol – the bespoke solution agreed by the UK and EU in how Northern Ireland would be treated post Brexit. Whilst initially viewed as a welcome step forward, the paper has arguably raised even more questions and has certainly not quelled the uncertainty and anxiety for local businesses around how all of this will work practically. What it effectively means is that, even at this late stage, we are still not entirely sure how we will trade with Great Britain, our largest trading partner, as well as the EU and the rest of the world.

The Command paper promises unfettered access for Northern Ireland’s businesses to the rest of the UK, no tariffs on internal UK trade, no new customs infrastructure in Northern Ireland and Northern Ireland benefits from UK trade deals. This is all very plausible and we welcome the commitment in it to make sure that any changes bear as lightly as possible on the everyday life of Northern Ireland. However, the paper does fall very short on detail.

We know that there will be new costs but aren’t clear what or how much they will be. There will be additional checks/processes on goods arriving in Northern Ireland but will this create delays/disruption/additional time pressures in getting goods to market? What goods will be tariff free and what will be designated as goods ‘at risk’ of entering the EU via NI with associated tariff implications and how will that process work?

The Command paper notes that because the Protocol is limited in scope to the movement of goods and wholesale electricity markets, the service industry will enjoy ‘new flexibilities’. What does this mean for the service sector? These and numerous other issues need to be clarified urgently. The protocol will apply, deal or no deal, and it is critical that the business community understands how it applies and the resulting implications in terms of access, costs/viability, supply chain management and critically the impact on Northern Ireland’s competitive position against both Great Britain and the Republic of Ireland.

There are also wider issues still at play that must be addressed before the start of 2021. For example Northern Ireland is in a unique position in terms of legislation with UK and EU law. A lot of primary and secondary laws must go through the Northern Ireland Assembly and Westminster within the next six months and we worry about how this can be managed and achieved.

Our members are also concerned about the impact of the UK’s Global Tariff policy on Northern Ireland. The UK Government guarantees us unfettered access to Great Britain but we still need to know how global tariff policy will emerge. Whatever level of tariff is agreed could have a huge impact on how Northern Ireland does business, on certain sectors of the economy and how supply chains operate.

Finally, access to skills is critical in a small economy like Northern Ireland’s and we have already lost thousands of migrant workers through the uncertainty created by Brexit. We need to make sure that the new UK Immigration policy works to supplement the skills that local businesses need and NI Chamber will be working closely with the Migration Advisory Committee and Home Office in the coming months to make sure that it does.

With time running out and businesses in the middle of the COVID-19 public health emergency, it seems increasingly unlikely that the Transition period will be extended beyond 31 December, with only weeks left for the UK government to make that call. The potential for ‘No Deal’ with the EU also remains. We urgently need answers to all of our questions and simply cannot deal with further uncertainty as we manage our way out of the COVID-19 crisis.