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05 June 2020

Businesses should expect more paperwork, bureaucracy and additional costs on trade between Northern Ireland and Great Britain when the transition period ends in seven months’ time.

The UK’s recently published Command Paper highlights significant differences between the UK and the EU and does not fully address the challenges which come from the special situation around that border, warns our latest Briefing  Paper – The unresolved difficulties of the Northern Ireland Protocol – co-authored by Prof Michael Gasiorek and Dr Anna Jerzewska. The paper highlights several areas where the UK’s interpretation of what was previously agreed appears to differ from the EU’s position.

The Command Paper confirms the need for both entry summary and import declarations for goods entering Northern Ireland – potentially the first time the UK Government has officially confirmed that both of these procedures will be required.

The researchers predict these requirements will inevitably to lead to additional cost, time and paperwork for businesses and will represent a significant departure from how companies trade at the moment. For many companies, this may require the use of a customs broker or a logistics provider at further cost because it is rare for companies to submit customs declarations themselves.

Michael Gasiorek, UKTPO Fellow and Professor of Economics at the University of Sussex Business School, said:

“Time is running out for the UK and the EU to agree on how the Protocol on Ireland/Northern Ireland, which forms part of the Withdrawal Agreement, will operate in practice.

The UK Government’s position, as recently stated in the Command Paper, is there will be no need to construct any new bespoke customs infrastructure in Northern Ireland except for checks for agri-foods which will require expanded infrastructure at Belfast Port, Belfast International Airport, Belfast City Airport and Warrenpoint Port. It is highly likely that the EU will consider this insufficient.”

Dr Jerzewska, Associate Fellow with the UKTPO, said: 

“Importantly for businesses in Northern Ireland, there is a shortage of detail in the Command Paper on which goods will be subject to tariffs and regulatory checks, on how customs controls would take place, and the procedures and paperwork that firms will need to adhere to. This leads to uncertainty, and will increase costs for companies in Northern Ireland and in Great Britain.”

Among the key stumbling blocks between the UK Government and EU that the Command Paper fails to resolve are the criteria which determining when a good is not at risk of moving into the EU market and would therefore not be subject to tariffs.

The briefing paper also notes that by permitting goods from Northern Ireland to freely enter Great Britain, this could impact on the UK’s trade relations with third countries as it raises the possibility of different tariffs being applied on goods entering Great Britain depending on whether they come via Northern Ireland or directly. In so doing the UK could be opening itself up to the possibility of WTO disputes.

Prof Gasiorek said:

“Over the last few months, it has become evident that the interpretation of the Northern Ireland Protocol differs between the UK and the EU and the Command Paper recently published by the UK seems to cement these differences, and these differences will spillover into the on-going future relationship negotiations.”

The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

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