As Britain deliberates on whether or not to quit the European Union with or without a deal, one of its most affected regions, Northern Ireland, has issued a stark warning about the possible consequences.
No-deal could bring back a hard land border between the British-administered Northern Ireland and EU-member Republic of Ireland with implications for trade – and maybe opportunities for Asian trade.
Most recently, the Northern Ireland government’s Department for the Economy, in a cover note for a report on the issues, “The Irish Land Border: Existing and Potential Customs Facilitations for Sensitive Goods and Products in a No-Deal Scenario,” underlined the point and dangers to trade of no deal.
“The report provides further evidence of the difficulties that would arise in continuing status quo trade between NI and Ireland in a no deal context and of the consequent risk to the NI economy,” the cover note said.
Dry the report might be in style, it is a useful summary of the options in a no deal context, including the use of exemptions and waivers under the World Trade Organization’s General Agreement on Tariffs and Trade (GATT).
Options under GATT include the invocation of security clause, and obtaining a waiver from a WTO obligation. It also points out frontier traffic agreements or regimes “may be a useful model.”
Other options include designing business-oriented customs facilities, integrated logistics centres near the border and establishing Joint Customs Offices as well as single windows and one-stop shop approaches. All of this would keep trade moving but not with the same speed and ease it has been till now.
One point is made very clear in a way that government documents tend not to do. “The report is a sobering reflection of the limited room for manoeuvre for businesses and government in a no deal context,” it said.
Such a stark assessment is a problem for the business community, which has made it clear that whatever agreement is reached with the EU, it must result in no hard border with the Republic of Ireland, Ann McGregor, chief executive of the Northern Ireland Chamber of Commerce and Industry in Belfast, told Asia Cargo News.
“Despite its dismissal by Parliament, agreeing [to] a withdrawal agreement is critical if we are to avoid ‘no deal’. In our view, a messy and disorderly Brexit in October would cause widespread damage to businesses and communities across the country. Neither government nor many businesses are ready for a no-deal exit, and it must not be allowed to happen by default,” added McGregor.
Some, though, are planning in ways that will impact the supply chain.
A recent British Chambers of Commerce and NI Chamber Brexit survey showed two in five of the Northern Ireland Chamber members said in the event of a ‘no deal’ they would plan to move all or some of their business to the EU, McGregor pointed out. “This is twice as high as the UK average, one in five).”
The other big change, one already being made, according to McGregor, include new export destinations.
“Members are actively seeking to expand export horizons,” said McGregor. “Some members are using Brexit as an opportunity to trade in countries outside of the EU that they may have talked about for a long time but have now been forced into looking at, such as Australia [and countries in Asia].”
There is still a keenness to do business with the rest of the world. However, given its Atlantic positioning and links that ocean, Asia might need to work a bit harder to win business in Northern Ireland.
“Our members believe the UK government should focus efforts on key partners, including the USA (56%), China (50%), Canada (43%), Australia (39%) and India (38%),” said McGregor. As part of this, the chamber welcomed a statement signed June 10 between the UK and South Korea to confirm agreement on terms of trade continuity post-EU exit, she added.
By Michael Mackey
Southeast Asia Correspondent | Bangkok
Sidebar: Belfast Harbour will keep goods flowing
One of Northern Ireland’s largest single pieces of infrastructure, Belfast Harbour, is already quietly confident of its role, whatever happens in the United Kingdom’s negotiations with the European Union.
The UK Government has indicated that its desire is to keep the movement of people and trade across the Irish border as frictionless as possible. In addition, the preponderance of intra-UK trade at Belfast, plus its experience of handling WTO cargoes, should mean that Brexit’s operational impacts on the port will be manageable, a harbour spokesperson told Asia Cargo News.
Two factors are helping the mood. One is a belief that despite ongoing trade tussles, which seem far away from Belfast, trade will continue and the harbour will continue to have a role. The other is investment in itself and its facilities.
It has committed over £100 million (US$125 million) to new capital projects including new cranes, and upgrades of its ferry and container terminals. Earlier this year it took delivery of a new Mantsinen 300M, the largest hydraulic crane operating in any UK port, the spokesman said.
“By continuing to invest in best-in-class marine facilities across its Ro-Ro, bulk, Lo-Lo and passenger sectors, Belfast Harbour will continue to service customers from across the island. “Trade levels will always fluctuate, but we anticipate that the underlying growth trajectory is positive,” he added.
They are also building a growing trade. Last year trade through Belfast Harbour rose by 3.8% to over 24 million tonnes against a backdrop of uncertainty over Brexit and, to a lesser degree, the global economy.