British moves to over-ride the EU-UK agreement for post-Brexit trading rules for Northern Ireland could turn Ireland into a “wild west” and harm north-south trade, business groups have warned.
Stephen Kelly, chief executive of Manufacturing NI, the industry representative group, said the UK legislative proposals to set aside parts of the Northern Ireland protocol, the 2019 Brexit deal for the North, could create opportunities for smugglers and heap pressure on Dublin to police the Border.
On Monday, the UK government published legislation that would, if enacted, allow British government ministers to override parts of the protocol that imposes checks on goods entering Northern Ireland from Britain to avoid a hard border between Northern Ireland and the Republic.
One of the proposals to eliminate checks on goods entering from Britain would allow Northern businesses to apply EU or UK rules, setting aside the EU rules for goods that apply under the protocol.
“This dual regulatory regime will effectively mean that off the west coast of Britain will become a wild west where anything goes,” said Mr Kelly.
He described the legislation as a blueprint for a “very ugly” future.
Mr Kelly said the “free for all” created under the proposals would be “at best, enormously difficult and certainly expensive” for Northern traders to ensure the products they are making are legal in the EU market.
The legislation also risks “a border reappearing on the island of Ireland,” he said.
“Irish authorities and EU authorities need to be assured there is no illegal product circulating in their market. Because there would be less controls now on the Irish Sea, there is that risk of an SPS [sanitary and phytosanitary] border, with vets at the border checking products are legal,” he said.
Michael Bell, executive director of the Northern Ireland Food and Drink Association, said the industry wanted the protocol “fixed, not scrapped.”
The integrated supply chain of the food industry, Northern Ireland’s biggest, on products moving north-south and east-west meant most issues thrown up by Brexit were “resolved” by the protocol, he said.
Businesses were concerned about uncertainty and instability created by the new proposals.
“This political move means we are going to lack stability for another considerable period of time as each side moves further away from coming to a negotiated set of arrangements we can all work with,” he said.
Mr Bell said that the “one size fits all” approach proposed under the dual regulatory regime would not work for food businesses in Northern Ireland.
“We need the flexibility to do both because that’s what we are currently doing and if we don’t get that, the problems are that we will reduce consumer choice and increase consumer costs,” he said.
Chartered Accountants Ireland said the UK legislation would harm north-south trade because it would create additional Vat paperwork and payments on imports and exports as London is proposing to give UK ministers power to override the current application of EU Vat rules in the North for goods.
“The bill is unhelpful commercially. It will create further uncertainty for businesses, particularly in Northern Ireland. In an era of interest rate and inflationary pressures, this is unacceptable,” said Dr Brian Keegan, director of public policy at Chartered Accountants Ireland.
