Protocol Impact On Our Trade Clear In Important New Research

There seems to be widespread confusion, particularly in Great Britain, about the Northern Ireland Protocol. People haven’t had time to look into the details and seem to think that the restrictions on selling to Northern Ireland apply in both directions. 

It concerns me that this will have an impact on our food and drink producers. While it may be too soon to say, important new information about trade between Northern Ireland and the rest of the island was released last week by the Central Statistics Office (CSO) in Dublin. This revealed that cross-border trade rose sharply in January as the new Brexit trading arrangements came into force. 

Also significant is the finding that imports of goods from Great Britain (GB) to the Republic have slumped while exports to Britain have also fallen. What we don’t know…and probably won’t until the end of this year…is the impact of Brexit and the Protocol on trade between Great Britain, our biggest and most important for food and drink products, and Northern Ireland. It appears likely that the statistics could eventually show a decline.  

Brexit, Farm Week readers will know, introduced new bureaucracy and trading rules with the Northern Irish Protocol from our continuing position within the European Union after Britain’s withdrawal from the community.

Certainly, there’s enough evidence from our member companies of problems in sourcing essential supplies and ingredients from Britain including imports from EU members. Retailers continue to experience difficulties in sourcing fresh fruit and vegetables being shipped from EU countries such as Spain through Britain. Drinks companies, in addition, are experiencing problems in sourcing bottles and other essential requirements.  Smaller food producers in Britain have also opted not to supply Northern Ireland due to the document heavy Protocol.

Delis and other specialist food retailers have faced delays in food products including cheese from France and Italy. It’s clear that we need a resolution of Protocol problems… and as soon as practicable.

Another sign of the post-Brexit times is the decision by Bristol-based tobacco giant Imperial Tobacco to announce it will stop selling some brands in Northern Ireland as a result of the cost of setting up separate production lines. The additional lines would be needed because the Northern Ireland Protocol means tobacco products sold in the region must continue to bear EU pictorial health warnings, while GB is moving to Australian health warnings.

We await decisions from Britain and the EU about measures to help companies overcome the delays and other hurdles. It’s vitally important for our economy that any hurdles to trade with Britain are removed or mitigated quickly.

The growth in sales to the Republic, the biggest export market for our food and drink, is good news. And it appears that more companies, especially in the Republic, have turned to Northern Ireland suppliers to help offset difficulties in doing business with Britain.

While this is immensely encouraging, we still need progress on the negotiations to tackle the Protocol delays because Britain remains the biggest market for our food and drink producers in particular.

The CSO said the businesses it spoke to reported that Brexit was behind the trade flow changes as companies looked to avoid the red tape involved when goods cross the Irish Sea.

Traders reported that a combination of factors contributed to the large reduction in imports from Great Britain in January 2021. These included the challenges of complying with customs requirements.

Other factors identified by traders were stockpiling of goods in Quarter 4 2020 in preparation for Brexit, substitution with goods from other countries, and a reduction in trade volumes due to the impact of COVID-19 related restrictions throughout January. 

In total, exports from the Republic to Northern Ireland climbed 17 percent to £170 million in January while imports from Northern Ireland to the Republic climbed 10 percent to £151 million.

The marked fall in imports to the Republic from GB must surely be a worry for the Government in Westminster. Exports to other EU countries have also been adversely impacted in the wake of Brexit. In total, imports on that trade route fell by 65 percent to just £427 million, surely a serious blow to companies across Britain.