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'Sobering' Brexit report lays bare perils for Northern Ireland firms of no-deal

 

The sheer scale of the problems facing Northern Ireland in the event of a no-deal Brexit has been laid bare in a new report. (Jonathan Brady/PA)
The sheer scale of the problems facing Northern Ireland in the event of a no-deal Brexit has been laid bare in a new report. (Jonathan Brady/PA)
Mark Bain

By Mark Bain

The sheer scale of the problems facing Northern Ireland in the event of a no-deal Brexit has been laid bare in a new report.

Commissioned by the Department for the Economy, it warns that businesses here would be left with "limited room for manoeuvre" should the UK leave without an agreement.

The report, compiled by EU customs and international trade lawyers, provides a "sobering reflection" on the issues that would arise for cross-border trade.

"In particular, it confirms the Northern Ireland Civil Service's concern about the impact of EU tariffs on food exports to (the Republic of) Ireland, and the ability of micro and small enterprises with no experience in customs procedures and operations to continue to export to Ireland," a cover note to the report said.

If the UK leaves the EU without a deal, it will cease to have a legal or regulatory framework in which to trade with the EU.

It will instead fall back on World Trade Organisation rules, meaning UK-EU trade would suddenly be subject to tariffs on some goods and new disruptive non-tariff barriers, resulting in a logistical nightmare.

In 2017 over 90% of businesses here that exported to the rest of the EU were trading across the border.

The total value of this trade was £3.9bn, which represented 38% of all exports and 18% of 'external' sales, which includes sales to Britain.

In 2016 imports from the Republic totalled £2.3bn while 94% of all local businesses exporting south of the border are micro or small enterprises, which would be hit hard by no-deal.

Among the recommendations, the report suggests negotiations could be commenced to establish joint Republic of Ireland/Northern Ireland customs offices in each other's territory.

"If an integrated logistics centre/customs office is established, the joint customs office can also be located there, thus significantly increasing efficiency," the report said.

"UK Government should concentrate on developing and implementing its own single 'window' for lodging all import, export and transit requirements and should enter into consultation with the Republic in its efforts to establish its own.

"The medium-term objective should be to create as much efficiency as possible on each side of the border by aligning the single windows in their presentation and functionality, thus significantly increasing efficiency."

Even with that, there would be further complications depending on what type of goods, livestock, food are being exported or imported.

The report also looked at the potential for establishing logistics centres where integrated customs and technology dealing with commercial traffic could be installed, though it warned this would be a long-term project and would be extremely costly to both sides of the border.

"Technological solutions, in so far as they exist, can help to speed the clearance process," the report added.

"Consideration could be given to the financial burdens small SMEs in particular will incur if they need to acquire the equipment for such solutions.

"Lorries or containers of such traders could be made identifiable by number plate recognition or a tracking device."

Another recommendation is that the UK could grant waivers or reductions in time-limits for lodging declarations for low-risk products crossing the border, which would be helpful for deliveries on short notice.

"It can be expected that traders will find the rules and procedures to be extremely complex and confusing," it added.

"The administrative effort on the part of the UK authorities or authorised bodies to issue certificates, licences etc. will be significant and likely result in delays."

The department also warned that the creation of a hard customs border "could jeopardise the peace which has been established by the Belfast Agreement and the Common Travel Area".

"However, there is nothing to prevent co-ordinated action between the UK and the EU/RoI to protect respective and/or mutual security interests," it said.

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