John Whelan: Business leaders want the threats to the protocol to stop

Companies in Northern Ireland have by and large adopted to the terms of the protocol and are are telling anyone who will listen to stop meddling
John Whelan: Business leaders want the threats to the protocol to stop

Trucks at Larne Port in Co Antrim; continuous threats to renegotiate the Brexit deal for the region is the biggest worry for business leaders in Belfast. Picture: Brian Lawless

The British government's plans to move ahead with draft legislation to do away with sections of the Northern Ireland Protocol, including the checks on goods entering the North from the EU under the Brexit trade deal, has raised concerns in Dublin, Brussels, and Washington.

In Dublin last week, British Labour Party leader Keir Starmer accused British prime minister Boris Johnson of taking a “wrecking ball” to Britain's relationships with Ireland and the EU with the controversial plan to unilaterally scrap parts of the protocol.

But talk to business leaders in Belfast and you will hear complaints that the uncertainty created by the continuous threats to renegotiate the Brexit deal for the region is their biggest worry. 

Companies have by and large adopted to the terms of the protocol and are are telling anyone who will listen to stop meddling. The trade figures seem to support their view. 

There has been a significant increase in cross-border trade on the island of Ireland since Brexit was implemented two years ago. 

Exports from the North have climbed, while imports from the Republic to the North have risen strongly too. 

And many Northern businesses see growing opportunities south of the border, with economic growth in the first quarter posting the highest rate across the EU, and employment levels growing rapidly. 

Bringing "a wrecking ball" to the EU exit deal could also have enormous implications for a weakened UK economy, pulling the North's economy down with it.

Companies across Northern Ireland are already staring down the risk of stagflation, a ruinous mix of stagnant economic growth and rapid inflation, not helped by the lack of an administration up in Stormont. 

The region's main trading partner, Britain, is experiencing the highest rate of consumer price inflation in four decades and economic growth there is under huge stress. 

Tearing up of the protocol would effectively be the end the Trade and Cooperation Agreement, or TCA, signed off between the UK and the EU and mean the end of tariff-free trade in both directions. 

However, the deal also covered a host of other beneficial elements, including 90-day visa-free holidays, and the fishing agreement. 

Scrapping the overall deal would create a sharp shock to the UK, the EU, and Ireland as a whole. 

It would essentially return the UK to a no-deal Brexit, with damaging consequences including the suspension of police and security cooperation, marking a serious move with long-term consequences for EU-UK relations. 

Ireland’s exporters, particularly the agri-food producers who sell one third of their meat and dairy products to Britain, would feel a devastating impact to their revenues and profits.

British bad faith

However, a response from the EU that requires it give a year’s notice, may not appeal to member states who want to show they have real teeth in the face of what they consider an act of British bad faith. 

A more likely response from Brussels would be to suspend article 521 of the Trade and Cooperation agreement. 

That would allow the EU to suspend the trade parts of the TCA, leaving all the other areas as agreed, including visa-free holidays and police cooperation, intact. 

Such an outcome is the more likely action based on prior disputes involving EU agreements, where Brussels prefers a gradual tightening of measures, as has been the case with its sanctions on Russia down the years since its 2014 annexation of Crimea. 

Of course, the North is unique. It has one foot in the UK and one in the EU, a situation which creates its own set of issues. 

But there are well flagged solutions, which can be negotiated if both parties sit down in good faith and implement them. 

The tactics of Mr Johnson's government in unilaterally deciding which parts of the protocol it will implement and which it will scrap, threaten both trade and peace in the North. 

The British government has in the past announced severe actions and has backed down in the face of pressure from the EU and US. 

It remains to be seen what happens this time. 

  • John Whelan is an expert on Irish trade

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