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You can find the current article at its original source at https://www.theguardian.com/uk-news/2019/jun/12/northern-ireland-businesses-warned-over-no-deal-brexit
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| Northern Ireland businesses warned over no-deal Brexit | Northern Ireland businesses warned over no-deal Brexit |
| (21 days later) | |
| A no-deal Brexit will create severe problems for Northern Irish businesses and oblige the Republic of Ireland to build border inspection posts, a report has said. | A no-deal Brexit will create severe problems for Northern Irish businesses and oblige the Republic of Ireland to build border inspection posts, a report has said. |
| Firms will have “limited room for manoeuvre” as they face an array of export checks, inspections and declarations, according to the report, which was commissioned by Northern Ireland’s Department for the Economy and published this week. | Firms will have “limited room for manoeuvre” as they face an array of export checks, inspections and declarations, according to the report, which was commissioned by Northern Ireland’s Department for the Economy and published this week. |
| It was a sobering reflection on the challenges if the UK leaves the EU without a deal, according to its authors, Eric Pickett and Michael Lux, lawyers who specialise in EU and international customs law. | It was a sobering reflection on the challenges if the UK leaves the EU without a deal, according to its authors, Eric Pickett and Michael Lux, lawyers who specialise in EU and international customs law. |
| “In particular, it confirms the Northern Ireland civil service’s concern about the impact of EU tariffs on food exports to Ireland, and the ability of micro and small enterprises with no experience in customs procedures and operations to continue to export to Ireland,” said a cover note. More than 80% of small Northern Irish exporters trade only with the republic. | “In particular, it confirms the Northern Ireland civil service’s concern about the impact of EU tariffs on food exports to Ireland, and the ability of micro and small enterprises with no experience in customs procedures and operations to continue to export to Ireland,” said a cover note. More than 80% of small Northern Irish exporters trade only with the republic. |
| The study said Ireland would need to establish inspection posts close to Northern Ireland to monitor trade in animal and food products, raising the spectre of a hard border that has prompted alarm from politicians and police chiefs who worry about attacks by dissident republicans. | The study said Ireland would need to establish inspection posts close to Northern Ireland to monitor trade in animal and food products, raising the spectre of a hard border that has prompted alarm from politicians and police chiefs who worry about attacks by dissident republicans. |
| The report said use of technology such as electronic monitoring could be expanded but would not obviate the need for physical inspections. It also said the UK and EU could seek an exemption from World Trade Organization rules requiring tariffs and checks, but that it would probably be temporary. | The report said use of technology such as electronic monitoring could be expanded but would not obviate the need for physical inspections. It also said the UK and EU could seek an exemption from World Trade Organization rules requiring tariffs and checks, but that it would probably be temporary. |
| The EU has strict rules for checking animals and food products at border inspection posts (BIPS) near the point of entry. Ireland’s existing posts at Dublin airport, Dublin port and Shannon airport are more than 60 miles from the border. “Consequently, Ireland will have to establish BIPS which are closer to the border,” said the report. | The EU has strict rules for checking animals and food products at border inspection posts (BIPS) near the point of entry. Ireland’s existing posts at Dublin airport, Dublin port and Shannon airport are more than 60 miles from the border. “Consequently, Ireland will have to establish BIPS which are closer to the border,” said the report. |
| The findings were a blunt reminder that there is no easy fix to the Irish border conundrum that has bedevilled the UK’s attempt to leave the EU and presented a dilemma for the Conservative party leadership candidates vying to replace Theresa May. | The findings were a blunt reminder that there is no easy fix to the Irish border conundrum that has bedevilled the UK’s attempt to leave the EU and presented a dilemma for the Conservative party leadership candidates vying to replace Theresa May. |
| In a ‘no deal’ scenario, the UK would leave the single market and the customs union immediately with no ‘divorce’ arrangement in place. The European court of justice would cease to have jurisdiction over the UK, and the country would also leave various other institutions including Euratom and Europol. | |
| The UK would no longer be paying into the EU budget, nor would it hand over the £39bn divorce payment. There would be no transition period. Free movement of people into the UK from the EU27 would stop. | The UK would no longer be paying into the EU budget, nor would it hand over the £39bn divorce payment. There would be no transition period. Free movement of people into the UK from the EU27 would stop. |
| Trade between the UK and the EU would be governed by basic WTO rules. The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports - making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO ‘most favoured nation’ rules it must also offer the same zero tariffs to other countries. | Trade between the UK and the EU would be governed by basic WTO rules. The UK government has already indicated that it will set low or no tariffs on goods coming into the country. This would lower the price of imports - making it harder for British manufacturers to compete with foreign goods. If the UK sets the tariffs to zero on goods coming in from the EU, under WTO ‘most favoured nation’ rules it must also offer the same zero tariffs to other countries. |
| WTO rules only cover goods - they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border. | WTO rules only cover goods - they do not apply to financial services, a significant part of the UK’s economy. Trading under WTO rules will also require border checks, which could cause delays at ports, and a severe challenge to the peace process in Ireland without alternative arrangements in place to avoid a hard border. |
| Some ‘no deal’ supporters have claimed that the UK can use article 24 of the General Agreement on Tariffs and Trade (Gatt) to force the EU to accept a period of up to ten years where there are no tariffs while a free trade agreement (FTA) is negotiated. However, the UK cannot invoke article 24 unilaterally - the EU would have to agree to it. In previous cases where the article has been used, the two sides had a deal in place, and it has never been used to replicate something of the scale and complexity of the EU and the UK’s trading relationship. | |
| Until some agreements are in place, a ‘no deal’ scenario will place extra overheads on UK businesses - for example the current government advice is that all drivers, including lorries and commercial vehicles, will require extra documentation to be able to drive in Europe after 31 October if there is no deal. Those arguing for a ‘managed’ no deal envisage that a range of smaller sector-by-sector bilateral agreements could be quickly put into place as mutual self-interest between the UK and EU to avoid introducing or rapidly remove this kind of bureaucracy. | Until some agreements are in place, a ‘no deal’ scenario will place extra overheads on UK businesses - for example the current government advice is that all drivers, including lorries and commercial vehicles, will require extra documentation to be able to drive in Europe after 31 October if there is no deal. Those arguing for a ‘managed’ no deal envisage that a range of smaller sector-by-sector bilateral agreements could be quickly put into place as mutual self-interest between the UK and EU to avoid introducing or rapidly remove this kind of bureaucracy. |
| Martin Belam | Martin Belam |
| The report noted that Switzerland and European Economic Area countries have derogation from inspection rules but that is because they have a deal with the EU. “The problem is that under a no-deal scenario, this option is not available.” | The report noted that Switzerland and European Economic Area countries have derogation from inspection rules but that is because they have a deal with the EU. “The problem is that under a no-deal scenario, this option is not available.” |
| Boris Johnson, Andrea Leadsom, Dominic Raab and Esther McVey have vowed that if they win the Tory leadership they will take the UK out of the EU on 31 October regardless of whether or not a deal is in place. | Boris Johnson, Andrea Leadsom, Dominic Raab and Esther McVey have vowed that if they win the Tory leadership they will take the UK out of the EU on 31 October regardless of whether or not a deal is in place. |
| This week’s report follows a series of other warnings about the impact of a no-deal Brexit on Northern Ireland. David Sterling, the head of its civil service, wrote to local political parties in March saying it could undermine security and worsen unemployment. | This week’s report follows a series of other warnings about the impact of a no-deal Brexit on Northern Ireland. David Sterling, the head of its civil service, wrote to local political parties in March saying it could undermine security and worsen unemployment. |
| The taoiseach, Leo Varadkar, said on Tuesday that it would be a “terrible political miscalculation” for anyone in London to think that a new prime minister would prompt the EU to renegotiate the withdrawal agreement. “That is really to misunderstand how the EU works.” May, he added, was not a bad negotiator and had obtained the best deal possible for the UK. | The taoiseach, Leo Varadkar, said on Tuesday that it would be a “terrible political miscalculation” for anyone in London to think that a new prime minister would prompt the EU to renegotiate the withdrawal agreement. “That is really to misunderstand how the EU works.” May, he added, was not a bad negotiator and had obtained the best deal possible for the UK. |
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