In the first of three articles, our Business Editor examines the impact of the controversial trade deal
Invest NI, the agency that markets Northern Ireland to overseas business investors, has refused to say whether the Brexit protocol has been good for the economy in its first year.
The trading arrangement was agreed between the UK and EU as a means of avoiding a hard border in Ireland by keeping us in the EU single market for goods.
It has been only partly implemented since the end of the Brexit transition period in January.
But it has created difficulties for companies shipping from Britain by introducing customs and checks on goods entering our ports.
That has led loyalists and unionists to claim their British identity has been eroded by the introduction of a border in the Irish Sea.
Tensions over the protocol led to rioting by loyalists and the hijacking of buses.
However, it has also opened up trading opportunities for local firms, as it allows unfettered access to the EU and UK markets.
And because it has erected trade barriers between the UK and Republic, companies across the border have been buying more goods from Northern Ireland.
According to the Republic’s Central Statistics Office, companies here sold an additional £1bn in goods to the South in the first 10 months of this year — a rise of 63% on the same period a year before.
Economist Dr Esmond Birnie of Ulster University claims the Irish Sea border is costing our economy £850m a year.
However, Andrew Webb, chief economist at business advisers Grant Thornton, said the protocol had opened up investments on a scale he had not previously witnessed.
Those included the announcement of a $200m canning plant by Ardagh Metal Packaging in Newtownabbbey’s Global Point Business Park, which is owned by Invest NI.
NYSE-listed AMP said the factory would enable it to serve customers in Ireland, UK and Europe.
Earlier this year Invest NI said the dual market access was one of a number of selling points.
But it refused to say if it believed the protocol had worked well for the local economy in its first year — or if it had seen a return on its investment of almost half-a-million pounds in promoting the protocol in international business magazines earlier this year.
Promotional material appeared in publications like the Dublin-based Business Post, and Forbes India.
The Forbes India advertorial lauded Northern Ireland as a “buzzing business destination”, but did not use the word protocol.
Instead, it stated “the recent trade agreement between the UK and EU has positioned NI as a unique global business destination”.
In March Invest NI said it and other advertorials had cost nearly £400,000 to place.
But this month it did not comment when asked whether it was satisfied on any return it had seen on the spend.
The Department for the Economy said it was hard to quantify the protocol’s impact.
“It is difficult to provide a complete analysis given that the protocol has not been fully implemented,” it said.
“Although it is clear that during 2021 many local businesses raised a range of frustrations around the cost and complexity of the new arrangements that commenced at the outset of 2021.
“In order to maximise economic opportunities for Northern Ireland businesses, we need to secure permanent and complete solutions to these frictions in the internal UK market.”
The DUP, which wants the protocol scrapped and has consistently threatened to collapse Stormont if it is not, was asked for comment on whether it had brought any benefits to the economy, including whether it had contributed to new investment.
DUP Economy Minister Gordon Lyons said: “The protocol has been bad for Northern Ireland, costing our economy £850m per year.
“Detailed studies have found conclusively that the protocol does not represent the ‘best of both worlds’.
“Rather, we have access to the EU single market but a new border between us and our most important trading partner — both by value and volume — in GB.
“We are in a pandemic and the protocol has placed our medicines supplies in uncertainty. It doesn’t get much more serious than that.
“It is time for HM Government to remove the border between us and the rest of the UK.”
In a reply to an Assembly question from Sinead McLaughlin MLA on whether Invest NI had been instructed or encouraged to stop promoting the benefits of the single market access under the protocol, Mr Lyons replied: “Northern Ireland is a great place to work and do business in for all sorts of reasons.
“Different companies will have different priorities and Invest NI has the freedom to pitch the benefits of Northern Ireland in accordance to what is relevant to individual investors.
“Neither I, nor my department, dictates how Invest NI promotes Northern Ireland to investors.”
Ms McLaughlin said the new Ardagh Metal Packaging plant, as well as other investments, could be attributed to the protocol, including growth in sales at veterinary pharmaceutical firm Norbrook, and logistics company PRM’s decision to open a new location in Lisburn.
“As well as this, we see a significant increase in the big supermarket chains and grocery wholesalers sourcing food from local producers,” she added.
“I would, of course, much prefer that we had not left the European Union. But at least the protocol has provided significant mitigations to the Brexit impact and provided substantial opportunities if we exploit them properly.
“However, it is essential that politicians seek to benefit from the protocol, rather than undermine it.
“The risk is this could put off investors. We do also need to ensure the protocol is interpreted with flexibility and to the benefit of the people and businesses here.”
Ms McLaughlin voiced disappointment that Invest NI had not reported on the impact of its marketing work overseas.
“However, I am encouraged that the Economy Minister has advised me in a written answer in the Assembly that he has not put pressure on Invest NI with regard to its promotion of the protocol,” she said.