Negotiations between the UK and the EU are at the tricky, hopefully nearing the end stage as they grapple with ways to make the Protocol work for as many businesses and households as possible.
At stake is the commitment in the Protocol Preamble, namely that both “Determined that the application of this Protocol should impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland”.
There’s a clash between the UK’s position, some of which many believe isn’t negotiable, and the EU’s which at times feels immovable.
Either side, and their supporters, believe their position is reasonable and that the opposite in awful. In reality, both positions have much going for them. A landing point midway between both would be ideal.
The UK believe that the operation of the Protocol is doing significant damage to the local economy, but there is no evidence other than anecdotal examples and some survey work highlighting issues which some businesses and families say they face. The EU believe the Protocol is already bringing benefits and would work better with more Protocol being delivered but that belittles the experiences of some traders now and the impact that ending the current grace periods would have.
It is, as has always been, a battle of hearts and minds rather than pounds and euros.
So, what do we know to be actually real?
This month alone we’ve seen some huge investments and massive jobs announcements.
Ardagh Metal Packaging announced a $200m investment in a new packaging plant to service their growing customer base in NI, UK and EU and represents the largest development in new manufacturing production facilities in memory.
Local pharmaceutical firm, Almac, announced 1,800 jobs of which 1,000 will be locally based (including Derry) thanks to what they openly describe as the “Almac Advantage” of having the unique right to achieve regulatory approvals in both the UK and EU markets. This is the single biggest jobs announcement in half a generation.
Local businesses have sold €1,063 million more to Ireland in just 9 months which is 60% more than 2020 whilst GB’s exports to the EU are minus 16%. We know that jobs are growing twice as fast as the UK average, that inflation is half the UK rate and that our Ports are massively up with Belfast +14.7%, Larne +18.5% and Warrenpoint +23.5%.
But whilst it appears that it is smooth sailing across the Irish Sea Border, there are storms ahead.
The costs and disruption in moving goods from Britain are real and, in many cases, unnecessary. They need fixed before the grace periods on foods, medicines and parcels come to an end.
Of equal worry is that on 1 January the UK introduces its own border operating model for imports into GB, unleashing a flood of new complexities for GB businesses. Only then will the GB businesses feel the full force of Brexit and the huge disruption it places on supply chains.
Then again perhaps, as what we have seen from Irish buyers since January, that disruption might see some English, Scottish and Welsh traders look to us to continue their supply thanks to our unique position of being both in the EU and UKs markets.
When we had dinner with Lord Frost last week, he confirmed that in supporting Brexit, the UK had voted for change and that the Government saw this as an instruction to fundamentally change the UK’s economic model.
Fundamental change brings winners and those who don’t. But squaring that with the commitments in the Protocol Preamble continues to be tricky for both sides!
Stephen Kelly is CEO of Manufacturing NI