UK-EU trade tensions intensify as Irish PM calls NI Protocol plan 'economic vandalism'

Mon 20 Jun 2022
Posted by: Phillip Adnett
Trade News

NI Protocol Bill

The UK government’s plan to unilaterally scrap parts of the Northern Ireland Protocol have been described as “economic vandalism” by Ireland’s Taoiseach.

Micheál Martin, the Irish prime minister, said UK plans to make it easier for some goods to move from GB to Northern Ireland (NI) would damage the NI economy.

Speaking on the BBC, Martin said that the legislation was “unilateralism of the worst kind” and called for “serious sustained negotiations between the EU and the UK government” to resolve outstanding issues.

Legal action back

Martin’s comments came after Brussels launched fresh legal action against the UK in retaliation for the NI Protocol Bill.

The dispute could lead to a trade war, with tariffs or even the suspension of the entire Brexit deal. However Martin said that “nobody wants a trade war in any shape or form”.

Derry Chamber of Commerce chief executive Aidan O’Kane told Belfast Live that it was “imperative” that any threat of a trade war was taken off the table.

“Political instability is damaging business confidence, and any attempt to end the current Stormont impasse is to be welcomed,” he said.

Trouble ahead

Businesses in Britain are already battening down the hatches and bracing for tariffs on top of the extra bureaucracy, reports the Daily Telegraph.

Uncertainty over the protocol is weighing on businesses, warns Marco Forgione, director general of the IOE&IT, who said the threat of tensions is “causing greater uncertainty”.

Forty per cent of the companies the IOE&IT works with would be severely impacted if Brussels and London became involved in a trade war, Forgione told the Telegraph.

Maros Sefcovic, the European Commission’s Brexit negotiator, has said Northern Irish companies were likely to lose access to the EU single market if the UK legislation becomes law.

Red tape

Emily Rees, a senior fellow at the European Centre for International Political Economy, said: “There is no doubt that the European Union intends on making a very strong point, and is likely to rescind certain elements of the Trade and Cooperation Agreement (TCA) in the case of any change to the protocol.”

Brussels might start to introduce red tape and slow border checks to frustrate British businesses, but if tensions escalate, tariffs will be a key tool, she added.

The EU could aim for politically important sectors such as agriculture and automotive. About 43% of cars made in the UK currently go to the EU market.

NI ‘doing well’

Martin said that dual regulatory standards envisaged for the legislation could be severely damaging to the Northern Ireland economy, which was doing well under the protocol.

“It is deeply concerning to industry and businesses in Northern Ireland ... in effect it represents a form of economic vandalism on Northern Ireland,” he said.