NI Protocol: Hopes rise of a new deal before Christmas as EU signals willingness to compromise

Thu 18 Nov 2021
Posted by: William Barns-Graham
Trade News

A new deal for post-Brexit trading arrangements in Northern Ireland could be agreed before Christmas with the EU appearing ready to back down on some outstanding issues around the Northern Ireland Protocol.

European Commission officials have signalled a possible compromise and have dialled down talks of retaliation over British plans to trigger Article 16, according to the Telegraph.

RTE’s Europe Editor Tony Connelly has since tweeted that the EU is proposing that its previous offer of a 50% cut in customs formalities on goods moving from Britain to Northern Ireland “become a legal obligation as opposed to a general aspiration”.

The UK’s EU minister, Lord Frost, is due to meet with European Commission vice president Maros Sefcovic tomorrow (19 November) for further calls.

Positive tone

Sefcovic has resisted calls from some EU states to draw up a list of potential retaliatory measures, while a breakthrough on the issue of medicines is “nearly there”, a source close to the discussions told the Telegraph.

“The message from the Commission was there is a change in tone and that’s positive,” the EU source said.

Labelling

Under the current Protocol rules, medicines moving from Great Britain to Northern Ireland have to be certified by the European Medicines Agency, which has led some pharmaceutical companies to say they won’t supply the region.

Brussels would ask for specific labelling on drugs sent to NI to show they are only for consumption in Northern Ireland and should not be sold inside the EU Single Market.

Medicines approved

The EU had already offered to change its laws to allow the continued supply of generic drugs which have already been approved by the Medicines and Healthcare products Regulatory Agency.

Lord Frost told BBC’s Good Morning Ulster he would like to “progress this as fast as we possibly can”, adding: “I’m glad there’s ambition on the EU side. I think it can be done.”

M&S demurs

Not everyone is happy with the EU’s compromises on the Protocol, however.

The FT reports Marks and Spencer’s argument that EU proposals will increase the administrative burden on companies and cost it £9m in new labelling costs.

The European Commission has offered lighter checks on goods going from Great Britain to Northern Ireland, but only if they are clearly labelled for consumption in the region.

The retailer’s chairman Archie Norman has written to Lord Frost to say that 90 million of its products would be affected and 95% of its food would still need vet certification, adding “a minimum of four hours per day” to transit times.

In total, fresh goods would take 45 hours longer to get to Northern Irish stores compared to when the UK was in the EU, meaning the retailer might have to stop sending some products to Northern Ireland.

Norman called for a “risk-based regime” with limited checks on goods using digital technology.

Intra-Ireland trade up

Trade between the Republic of Ireland and Northern Ireland has boomed since the introduction of the Protocol, the Guardian reports.

The Republic of Ireland’s Central Statistics Office (CSO) figures show that the value of imports from Northern Ireland was up 60% in the first nine months of 2021 and worth €2.8bn (£2.37bn).

There has also been a 48% rise in exports to Northern Ireland from the Republic, bringing the total value of trade to €2.57bn for January to September 2021.

ROI-Britain trade

Exports from the Republic to Great Britain, where import controls are not yet in full operation, were up by 36%, but trade the other way rose just 2%.

September figures from the CSO showed a 32% year-on-year drop in exports from GB to Ireland in the first seven months of the year. However, the 2% rise in September compared with 2020 suggests the decline has been arrested.