The announcement on Christmas Eve that the EU and the UK had concluded a Trade Deal has brought a collective sigh of relief from the local business community on the basis that a Tariff Free – Quota Free agreement is a better outcome for the Northern Ireland economy than no deal.  

However, the Trade and Cooperation Agreement (TCA) which has been ratified by both sides will not deliver the vision of unfettered access promoted in the pre-referendum hype.  Of the promised frictionless trade based on no tariffs, no customs, and no inspections - only the removal of tariffs has been delivered and the result is a unique and unpredictable outcome for Northern Ireland.

The Northern Ireland protocol means that our concerns are not about continuing trade with the European Union - that is guaranteed and will hopefully offer unique advantages for the province’s businesses. Rather it is the ability to source goods from Great Britain, in the face of customs processes and other non-tariff barriers, which will be subject to an additional administrative burden.  

For the animal feed trade intensive lobbying had been targeted at politicians, civil servants, and the Cabinet office.  A major concern was the ability to source grain from England and Scotland post Brexit. The threat of a £90 per tonne tariff on around half a million tonnes of wheat and barley from GB would have severely impacted our livestock sector. Thankfully, the tariffs have been avoided - but declarations, checks and inspections will add significantly to the cost of trading goods by road freight with the UK mainland. Uncertainty remains around the sourcing of grains from other 3rd country regions where these had been subject to favourable EU Tariff Rate Quotas (TRQ’s) which may no longer be available to Northern Ireland importers. Goods sourced from such origins will be classed as “goods at risk”, incurring full EU duty rates on arrival, and no rebate system has yet been tabled to recover duty when these goods are consumed in NI.

Britain and the EU have finally agreed on a deal which effectively keeps Northern Ireland in the Single Market.
Britain and the EU have finally agreed on a deal which effectively keeps Northern Ireland in the Single Market.

Perhaps the biggest challenge remaining is the application of Rules of Origin (ROO) for goods traded into NI or EU which contain significant quantities of third country materials. With Northern Ireland effectively remaining within the Single Market, all goods moving GB to NI or EU will need to demonstrate that they comply with EU law from 1st January. The agreement does however aim to minimise technical and regulatory divergence and encourage the use of international standards. This is to avoid, where possible, businesses trading in the UK and the EU having to comply with two different sets of rules and regulations. Both parties will maintain separate Sanitary and Phytosanitary (SPS) regimes regulating human, plant, and animal health. This means that movements in either direction across the Irish Sea will be subject to border controls involving extensive checks. With specialist paperwork and frequent physical inspections required on products of animal origin, the agreement places a duty on both sides to ensure that any SPS border controls are “proportionate to the risks identified”. These will be regularly reviewed by a new Trade Specialised Committee on Sanitary and Phytosanitary Measures to see if further facilitations are available without compromising biosecurity. 

The deal commits to ongoing UK–EU co-operation on animal welfare, antimicrobial resistance and sustainable food systems and it includes understandings on areas such as haulage of goods, environmental improvements and state aids and subsidies while both parties have the right to impose duties if they believe any changes by the other party has led to an unfair competitive advantage. The challenge for the Northern Ireland executive will be to deliver effective policies and supports that will allow local businesses to make the best of the challenges and opportunities presented through the Trade and Co-operation Agreement and the NI Protocol.