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Aodhan Connolly

Today is only the start of a long process of seeking out new trade deals and the prospect of new costs for Northern Ireland

Aodhan Connolly


A general view of Belfast Harbour

A general view of Belfast Harbour


A general view of Belfast Harbour

So here we are after almost four years of discussion, debate, stagnation, false starts and near misses. Brexit day is upon us. However, today does not signal the end of Brexit but the start of a long process of the UK looking for trade deals, not only with the EU but with countries across the world.

For NI businesses and households, we won't see much change until the end of the year as we head into a transition period that lasts until December 31.

During that time, we will still be able to trade with the EU and the rest of the UK as we have in the past, we will still be able to travel in the same way as before and there will be no discernible difference. What does happen is that the clock starts ticking again on critical points for the NI economy.

Firstly, for the whole of the UK, there is the need to get that free trade agreement (FTA) with the EU. As the first round of negotiations aren't until March, we have around eight months to get a wide ranging trade deal. The average time it takes to conclude a trade deal is four years and the recent EU-Japan deal took nine years.

This FTA is really important for us here in NI. If it has close alignment to EU standards and customs, it lessens the need for checks and paperwork from GB-NI. However, given that there are voices within the Government that are actively seeking divergence this is unlikely, even though it means the difference between a paper wall and a brick wall down the Irish Sea.

What would be worse is the spectre of no deal between the rest of the UK and the EU which is still very much a possibility.

The clock is also ticking for the mitigations, derogations and compensations that NI business needs to relieve some of the friction that will come from this deal. Retail accounts for 70% of value of everything that comes into Northern Ireland from Great Britain. One mixed load on a lorry can have 1500 different products. Each will need a separate custom code and could have tariffs placed on them if they are deemed as at risk of entering the EU. And 800 of those products will be of animal origin and may need an Export Health Certificate.

All of these things have man hours, processes, systems and delays associated with them and all have cost. Neither the retail industry or the consumer can afford these new costs. If the new costs are higher than the profit margin then either the product or the business model becomes unviable.

That's why we need common sense decisions from the new Joint Committee on what products are at risk and on Rules of Destination requirements. We need the Government to as soon as possible reconstitute the Alternative Arrangements Working Group to look at mitigations such as trusted trader schemes. We need safety and security agreements to make these schemes work for the movement of goods and customs processes. We even need to go down to the level of detail where we get a system of postponed VAT accounting for import VAT from HMRC and the Republic of Ireland.

So for NI business this year is hugely important as it will set the tone for the new normal of how we conduct business for the next decade or beyond. While there is hope in the fact the business community and the five main political parties here are working together to a common aim of protecting our economy and households, we cannot be complacent as to the task that is before us this year.

  • Aodhan Connolly is director of the NI Retail Consortium
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