Special report

ere have been strong warnings that trade between Ireland and Great Britain will grind to a halt if the UK government succeeds in scrapping the Northern Ireland Protocol.

Economists, policy makers and industry representatives who spoke to the media, both on and o the record, believe London’s withdrawal from the agreement would lead to a suspension of the EU-UK Trade and Cooperation Agreement (TCA), which regulates the relationship between the UK and the EU, including Ireland.

Without that set of standards, British-Irish trade would revert to WTO rules — precisely the economically ruinous outcome all parties have been trying to avoid since the UK voted for Brexit in June 2016.

“If this were to play out, I actually think the rst immediate hit would be south of the Border,” said Paul Mac Flynn, the Belfast-based co-director of the Nevin Economic Research Institute.

“Without the TCA, trade from Great Britain to the Republic of Ireland is going to grind to a halt.”

According to an economic impact report published by the Department of Enterprise before the TCA was rati ed, that outcome would result in a slower-growing Irish economy that would be 7% smaller by 2030 than it would have been without Brexit.

But in the short term, both Ireland and the UK would be scrambling to get to grips with the abrupt end of essentially free trade between them and disruption would be severe.

Ironically, all-island trade would likely continue under the status quo regime for a while at least, as the EU is understood to have little appetite for imposing an internal border and the infrastructure doesn’t exist to do so if it wanted to. e signi cance of crossBorder economic interdependence was underscored yesterday with the announcement that Ballymena bus manufacturer Wrightbus had won a deal worth a potential €562m to sell up to 800 battery electric buses to the National Transport Authority e NTA said the deal could potentially become the single- biggest bus procurement deal in the history of the State.

Sinn Féin East Derry MLA Caoimhe Archibald said the major contract is also “a vote of con dence in the skills and expertise of the local workforce”.

“As the British government today introduce legislation to undermine the protocol and breach international law, it is a timely reminder of the North’s unique ability to continue to access the EU single market and create jobs,” she said. at interconnectedness is perhaps even more pronounced in agriculture where supply chains and processing relationships have created effectively a uni ed industry that is the biggest indigenous sector in each jurisdiction, after the public sector.

One policy source gave the example of the numerous cross-Border journeys the cream in Diageo’s Baileys liqueur must take before getting to the consumer: the milk comes from Fermanagh farms before it is sent to Glanbia in Cavan for processing, then onward to Belfast for further processing and nally to Dublin for mixing and bottling.

“ e protocol works,” they said. “If that milk is no longer equal, you have to segregate it and fundamentally alter the logistics of agriculture and the food sector.”

For a sector already struggling with supply chain issues due to the Russian invasion of Ukraine and the after-e ects of the pandemic, another trade disruption could be devastating. e certainty that getting rid of the protocol would be dramatically damaging to all parties has led many to conclude that the current protocol bill will not become law. e more lasting e ect, however, will come from the cloud of political risk and economic uncertainty that hangs over Northern Ireland as long as the Conservative Party refuses to come to terms with Brexit.

“ e more lasting e ect of this bill will be to destroy any policy certainty surrounding Northern Ireland’s trading relationship,” said Mr Mac Flynn.

“Even if they do come to a deal eventually, how could any potential investor be sure that deal will not eventually su er the same fate as the protocol?” he added.

But not everyone agrees that the ght over the protocol is pointless and destructive. e Irish Road Haulage Association is hoping the scrap over post-Brexit T&Cs will nally produce a compromise to smooth trade in all directions.

“I’m in favour of whatever will relieve our trade problems,” said IRHA president Eugene Drennan.

“We don’t have smooth operations now and it’s costing too much.

“ e UK is the country that left, but Ireland is paying the most.

Trade between Ireland and Britain will halt if protocol move goes ahead

Scottish whisky exports into the EU, and the transport of car components in and out of the English midlands and north, will be hit by retaliation against Britain in a looming trade con ict with Brussels. e EU is now expected to launch legal action against the UK after ministers controversially claimed an emergency loophole allowed them to scrap post-Brexit checks and standards in the North.

UK Prime Minister Boris Johnson argued changes in new legislation nally announced yesterday were “relatively trivial” measures designed to ease trade disruption between the North and England, Scotland and Wales, as the bill was published yesterday.

But EU Brexit chief Maros Sefcovic warned Brussels will launch legal action for infringing the Northern Ireland Protocol. At the same time a majority of members of the North’s Stormont assembly accused Mr Johnson of recklessly destabilising the 1998 Good Friday Agreement.

Under the plan the UK government would scrap checks on goods from Britain destined for the North rather than the EU via the Republic. ere would be a “green lane” with a “red lane” allowing existing checks for goods destined for EU countries.

British rms exporting to the North could choose between meeting EU or UK standards.

Crucially, changes would also remove the role of the EU Court of Justice in resolving single market disputes, replacing it with independent arbitration.

Mr Sefcovic said the changes were “damaging” and he said the commission will revive a legal action put aside last year.

Brussels o cials said there was “zero sympathy” in any EU quarter for the UK’s ongoing e orts to wriggle out of deals it signed in October 2019, and con rmed in December 2020, all of which were later rati ed by the European Parliament.

“ is is seen entirely as an internal struggle within the British Conservative Party. It’s about Boris Johnson’s battle to remain as leader and others, such as Liz Truss, to oust him,” the o cial said.

“ is is a reasonable, practical solution to the problems facing Northern Ireland,” foreign secretary Liz Truss said in a statement.

“It will safeguard the EU Single Market and ensure there is no hard border on the island of Ireland.”

It was con rmed that a “hit list” of UK export and import products has been developed to retaliate if the British draft law become reality. e list has a political edge targeting Scotch whisky and car products in the English midlands and north where Mr Johnson’s party made gains in the 2019 general election.

Under the new draft law, expected to face considerable opposition in the London parliament, the government would scrap checks for rms selling goods from Britain destined for the North rather than the EU via the Republic.

Proposed changes would also allow British rms exporting to the North to choose between meeting EU or UK standards on regulation, which are expected to increasingly diverge.

Crucially, changes would also remove the role of the EU Court of Justice in resolving single market disputes, replacing it with independent arbitration.

Mr Sefcovic said the changes were “damaging” and he threatened to take UK ministers to court.

“As the rst step, the commission will consider continuing the infringement procedure launched against the UK government in March 2021.

“We had put this legal action on hold in September 2021 in the spirit of constructive cooperation to create the space to look for joint solutions.

“ e UK’s unilateral action goes directly against the spirit,” the Slovakian Commission vice-president said.

DUP leader Je rey Donaldson said it was right that the UK government has acted on the protocol and said he would read the bill against his party’s tests for removing the Irish Sea border.

What, not a drop of Scotch in the house...