Belfast Telegraph

Margaret Canning: Now we know how much worse things could really get

Dr Esmond Birnie
Dr Esmond Birnie
Margaret Canning

By Margaret Canning

The call from businesses in Northern Ireland since the vote to leave the EU referendum has been for an end to uncertainty.

But now uncertainty has been replaced by hard facts about how much worse it could really get in the event of a no-deal.

The plan for avoiding a hard border is to allow for the unhindered, tariff-free flow of goods from the Republic into Northern Ireland on a temporary basis. The Government also published tariffs for products coming into the UK after Brexit, which would apply until a permanent arrangement is in place.

The arrangement on the island of Ireland is the UK doing what it can to avoid having to impose checks on the border on goods entering Northern Ireland from the Republic.

But while it's positive news for the continued flow of goods across the border out of the province, it places Northern Ireland business and farmers at a distinct competitive disadvantage.

Businesses in the Republic will be able to sell goods tariff-free into Northern Ireland but the same will not apply to goods going the other way. The EU will not allow Ireland to reciprocate the arrangement which the UK has presented as a member of the trading bloc cannot set its own trade policy.

Government officials acknowledged that businesses and farmers in NI could end up worse off.

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If the plan is a scare tactic to encourage MPs to vote in favour of the withdrawal agreement if it comes back before the House of Commons for a third time, business in Northern Ireland will not be happy to have been deployed as cannon fodder.

But some, including Esmond Birnie, the senior economist at the Ulster Business School, said there could be a potential gain to consumers in Northern Ireland from tariff-free status being extended to a wider range of goods.

He said businesses in Northern Ireland which process goods and materials brought over from the border from the Republic could also benefit.

And in theory, a dairy business in Northern Ireland could be at a competitive advantage when it comes to winning business in Great Britain, compared to a business in the Republic which will face tariffs.

But the Ulster Farmers' Union said it could see no upside to the plans: "The risk is farming becomes a secondary industry in Northern Ireland rather than primary, which has a significant knock-on effect for the rest of NI's economy, especially in rural areas."

Belfast Telegraph