The Northern Ireland Protocol needs to be softened so that goods from Great Britain coming to NI are less affected by the need for trade formalities.
he existence of the protocol is a consequence of efforts to give Northern Ireland a more favourable trading outcome following Brexit while avoiding a hard border but the advantages are being overshadowed by this red tape.
The protocol is the outworking of efforts to offer business in Northern Ireland a more favourable outcome than would develop if Brexit had been implemented simply by making the border between the UK and the EU, in part, the same as the border on the island of Ireland.
The border on the island of Ireland, which existed from 1920 to 2020, ceased to be a serious trade and customs border with the advent of the EU as a single market.
Brexit opened the prospect of a serious disruption of established trade patterns on the island affecting agricultural production and manufacturing industry.
The protocol has avoided a serious disruption, even if possibly only temporarily, while debate takes place about amended protocol arrangements.
In principle the protocol has a simple objective: to give Northern Ireland businesses the trading advantage of remaining in the EU single market as well as being part of the now separate UK market.
From the moment that this objective was established, the advantages to businesses located in NI were clear.
So also, was the difficulty of ensuring that trade through NI did not become an unapproved route for goods produced in GB avoiding EU border formalities to export to other places in the EU.
The continuing unsolved problem for the protocol is to deliver an acceptable mechanism to avoid trade entering the EU through NI and avoiding EU formalities.
The practical question, for UK Ministers and the EU Commission, is can this be done without a full check on all goods from GB coming through NI?
Some kind of recording or sample checking with a degree of reassurance on its effectiveness is needed.
It is no surprise that, from an EU perspective, the key issue is in knowing what goods are coming into NI so that signs of unapproved trade diversion can be detected.
Solving this problem for different categories of goods coming into Northern Ireland, which is simply stated, has been subject to very prolonged inter-government negotiation.
It was an unfinished task for the Government of Theresa May and continues now for Boris Johnson.
The difficulty in assessing the destination of goods being imported to NI and destined for customers elsewhere in the EU can be tackled either as likely to be small scale, in which case any trade diversion might be negligible (but could it be ignored?) or, if on a larger scale, would merit a formal transit check.
The UK and EU authorities are still wrestling with possible options.
Happily there should be no difficulty with arrangements for goods leaving NI for elsewhere in the UK or EU.
The immediate protocol problems relate to trade and customs arrangements. There is another series of potential problems that may emerge as the trading rules and product standards of the UK and EU diverge.
Businesses based in Northern Ireland will now be expected to meet product standards as set within the EU. If UK/GB standards differ that could affect trade with GB (or within the UK).
Issues of this kind have already been evidenced for some medicinal products. Some form of mutual recognition arrangements will be needed.
In a recent survey, Manufacturing NI has made a useful assessment of how its members are coping with the uncertainties of the protocol.
A number of features stand out.
Perhaps slightly surprisingly, the protocol does not figure as a major issue for its members. Just 24% of member firms face problems with the new trading requirements, down from 41% in mid-2021.
The result suggests that, after initial concerns, businesses are adjusting to the new requirements. Early in 2022, most firms (66%) were reporting business as usual.
The recent Manufacturing NI report says that, for the first time in its regular surveys, businesses reporting that the protocol had no impact on their business, or that business was on-going as usual, ranked higher than those experiencing some disruption.
And 65% of replies said that they accepted that the protocol is here and they wish it to work better through mitigation and simplification.
Beyond the reach of Manufacturing NI, the less obvious complaint about the impact of the protocol lies with businesses in GB which traditionally sold goods in NI.
Perversely, that may be to the marginal advantage of businesses in NI or the Republic of Ireland.
