The Brexit tumult is radically reshaping business on the island of Ireland

A recently announced bill by the UK government to override certain aspects of the Northern Ireland Protocol is casting a long shadow over the state of trade.

Paul Faith | AFP | Getty Images

DUBLIN – Amid intense political uncertainty and the turmoil of Brexit, the movement of goods on the island of Ireland is changing and seeing a significant boost.

Since Britain’s formal exit from the European Union in January 2020, firms have changed their stance, rethinking the roads they take and the ports they use.

It is governed by the Northern Ireland Protocol, an arrangement that allows the UK province to remain in the EU’s single market, but requires checks on goods arriving from the rest of the country (England, Scotland and Wales). The EU’s single market seeks to guarantee the free movement of goods, capital, services and labor within the bloc.

Recent changes can be seen in the trade status between the Republic of Ireland, which is part of the European Union, and Northern Ireland.

Imports from Northern Ireland rose 34% year-on-year to 294 million euros ($310 million) in the first quarter of 2022, and exports to the north rose 49% to 368 million euros in the first quarter of 2022, according to data from Ireland’s Central Statistics Office.

“What was clearly happening was that Irish buyers were moving away from GB [English, Scottish and Welsh] suppliers and continue their business with the UK by buying from Belfast instead of Birmingham,” Stephen Kelly, chief executive of Manufacturing NI, which represents the industry in the region, told CNBC.

This has played into the movement of goods such as food, pharmaceuticals and manufacturing supplies across the land border of the two jurisdictions, crossing the road network as well as ports for onward travel.

Ian Talbot, chief executive of trade group Chambers Ireland, told CNBC that the move in business is the result of a lot of adaptation by Irish and Northern Irish businesses after Brexit.

“There is no catastrophic failure anywhere. No port is lying idle, no road is lying idle. Trade is happening and in large numbers,” he said, referring to the existing arrangement facilitated by protocol.

However, he added that there is still a caveat to changes in trade and movement of goods on the island of Ireland as this change took place in 2020 and 2021 amid the disruption of Covid-19.

“With the impact of Covid and the lockdown, it’s very hard to figure it all out when you’re doing a comparison. What year do you compare it with?”

moving directions

From the beginning of 2021, has grown rapidly A number of cargo ships left Irish ports such as Dublin and Rosslare in the southeast of the country for ports in France and Spain to avoid the red tape of crossing through Britain.

This marks a further change in the profile of freight transport in the island of Ireland, with companies abandoning the UK’s traditional “land bridge”, where trucks would cross the Irish Sea into the UK and across the country to the port of Dover and onward. will travel To France for continental deliveries.

“Northern Irish companies can easily access those routes without having to go to the east coast of Great Britain,” Talbot said.

But the port of Belfast has also felt the tremors. Belfast Harbor increased its operating profit by 13% to £34 million for 2021, with over 25 million metric tons of cargo moving through the port.

In its annual report, Harbor cited the relaxation period for implementing the Northern Ireland Protocol as a factor in the increased level of trade. But it acknowledged that “risks and uncertainties” remain as the grace period expires. The UK has not yet imposed checks on goods coming from Northern Ireland.

“It is difficult to predict the eventual derived demand effects on overall economic activity from Brexit and the NI protocol and their concomitant impact on trade,” the report said.

protocol bill

of the UK government recently announced bill Overriding some aspects of the Northern Ireland Protocol is casting a long shadow on trade conditions and the movement of goods in and out of the island of Ireland. EU launches legal action over plans to scrap parts of dealAnd the impending departure of UK Prime Minister Boris Johnson has also added to the precariousness – although potential successors Rishi Sunak and Liz Truss are likely to go ahead with plans.

The bill, as proposed, would create green lanes and red lanes for goods traveling to Northern Ireland or beyond. The Green Lane will be for goods going to Northern Ireland only and not subject to checks, while the Red Lane will eventually apply to checks going to the Republic of Ireland or elsewhere in the European Union.

Kelly said some elements of the bill, such as Green Lane, are “not offensive,” but there are still doubts about how practical it will be to implement.

This doubt would rekindle concerns for business in Northern Ireland that are similar to those felt when a no-deal Brexit was likely.

“We are in a potentially worse position than a no-deal, if the UK and EU do not come to an agreement in the coming weeks and months, it is not just a no deal but it is a no deal and a trade war. ,” They said.

“This would be extremely damaging not only to Northern Ireland but to the UK and the EU as a whole, which would be a double whammy for us.”

This is associated with rising inflation rates and the war in Ukraine, which has disrupted supply chains in the wider European context.

Kelly said there are many moving parts to the business but that the unique situation of Northern Ireland will not change.

“Northern Ireland will not physically move away from being the border between the UK and the EU,” he said. “Our geography will not change.”

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