Frankie Devlin, Tax Partner, KPMG, writing in the Irish News....if the Northern Ireland Protocol is agreed, NI business should still be protected from the worst consequences of no deal.
In terms of the deal and in particular the Northern Ireland Protocol, whilst there is still a lack of detail on many issues, it should allow the many small NI businesses that depend on it frictionless trade on the island of Ireland (no tariffs, no checks).
This results from Northern Ireland being required to apply EU customs rules to goods and the movement of the customs and regulatory border to the Irish Sea. In addition, Northern Ireland business should have tariff free access for goods to and from other EU countries.
Northern Ireland business would also benefit from existing EU FTAs with rest of world countries and any new trade deals that the UK may agree. So far so good.
In respect of the movement of goods from NI to GB and GB to NI, the picture is less clear.
It is currently the intention that goods moving from GB into NI will require a customs declaration. If the goods remain in Northern Ireland then no tariffs apply, however, if the goods are at risk of moving on into ROI, or EU then a tariff will have to be collected on behalf of the EU.
For goods that are sourced in Northern Ireland and move the other way into GB, there may be a need for an exit summary declaration, however, there should be no tariffs. Further clarification is required on whether the UK may implement special tariff rules for certain categories of goods movements to the UK which enter through the NI backdoor.
For example, goods originating from outside Northern Ireland which are shipped to GB via NI. If the UK and EU agree an FTA with zero-tariffs, the declaration system could be simplified, and the likelihood of any tariffs reduced.
In relation to VAT rules, Northern Ireland will remain part of the UK VAT area, however, it will be aligned to EU VAT rules on goods only.
In summary, this deal, whilst far from perfect, would certainly be better than no deal and it could be argued that it gives Northern Ireland business a potential advantage over ROI competitors (due to comparatively unfettered access to the GB market) and also over businesses in GB who would not have the same unfettered access to the EU market.
Whether it is “best of both worlds” is open to debate and there may be some losers, however, that seems to be the price of getting Brexit done.
Graham Gudgin, Policy Exchange's Chief Economic Adviser.Why the DUP should reconsider their opposition to Boris Johnson’s Brexit deal
...the Withdrawal Agreement does less damage to Northern Ireland’s status within the UK as the DUP concerns might indicate. The DUP’s deepest concerns have been about their own ‘backstop’, the confirmatory vote, which would allow Northern Ireland to withdraw from the EU’s commercial orbit. On the face of it, a majority vote in a specially recalled Northern Ireland Assembly would allow nationalist parties, in combination with the strongly anti-Brexit Alliance party, to vote to continue the EU arrangements in perpetuity.
The DUP’s second objection, to a tariff border at the Irish Sea, is also less important than it might seem at first sight. The wording of the backstop in the new Withdrawal Agreement is vague on what exactly would be checked. The proposal is that goods bound for the Republic of Ireland from GB via Northern Ireland would be liable for tariffs as they enter Northern Ireland. A new ‘Joint Committee’, set up within the Withdrawal Agreement to administer its provisions, would decide which types of trade were most likely to involve such through-trade.
It can be argued that the Joint Committee is itself a new institution governing Northern Ireland completely outside the GFA, thus adding to the democratic deficit created by imposing on NI commercial regulations which it has no say in agreeing. The danger for unionists is that when Northern Ireland businesses need to lobby for changes in regulation, they will need to work with MEPs elected in the Republic of Ireland. The focus of business will thus rotate away from London and towards Dublin in way that softens up Northern Ireland for an eventual Irish unification.
The point is that little trade may be liable for tariffs at the Irish sea and very little trade bound for Northern Ireland. While there is a capability within the new backstop for Northern Ireland firms to be charged tariffs, which can be remitted if the goods are consumed within Northern Ireland, such a complex mechanism is likely to be avoided in future negotiations. Think about supermarket trucks with hundreds of different items bound for Northern Ireland all due different tariffs and rebates. Since four times as much trade occurs between NI and GB as between NI and the Republic this could involve business in a much larger amount of administration than would be saved by avoiding a land border.
The outworking of these arrangements would surely minimise tariff liability at the Irish Sea into NI. Only those consignments bound for the Republic would be due to pay tariffs and the only checks needed would be intelligence-based to intercept smugglers. In any case, the intention is to negotiate a free-trade agreement during a transition period. With an FTA in place there may be no tariffs to impose and no need for any checks. In other words, we can expect the tariff border to dissolve by then end of the transition period.
The third DUP concern is on VAT. The Withdrawal Agreement states that Northern Ireland will remain within the administrative arrangements that currently cover the whole UK. This will facilitate the collection of VAT duties due of trade across the Irish land border. It does not mean however that Brussels, or anyone other than the UK Government, will set VAT rates or exemptions. Just as is currently the case within the entire UK, VAT rates will be set in London. Although clearly another case where Northern Ireland is treated differently from GB, this is a technical matter of tax administration and of little consequence for the future of the union. All taxes collected in Northern Ireland will be remitted to London and not Brussels or anywhere else.
In conclusion, the new Withdrawal Bill contains arrangements for Northern Ireland that the DUP find unacceptable. This is on the grounds that Northern Ireland is treated differently from Great Britain in a way which endangers what Conservatives often refer to as ‘our precious union’. Detailed examination however suggests that these dangers are more perceived than real. This is decidedly not a modern rerun of the Anglo-Irish Agreement of 1985. Tariff liability at Northern Ireland’s Irish Sea border are likely to fall away with the signing of a UK:EU free trade agreement. Regulatory alignment and the need for associated checks are also likely to be minimal since any modern free-trade agreement includes level playing-field provisions. The administration of VAT is a technical matter for firms and will hardly be noticed by the wider public. In short, there is little here that threatens the union and few threats that had not already been agreed by the DUP in consultation with the Johnson Government.
Michael Gasiorek Professor of Economics University of SussexConsider the impact of these arrangements proposed by the Withdrawal Agreement on existing producers in Northern Ireland. The agreement aims to preserve the status quo by allowing producers to sell to both the EU and GB with no tariffs and no regulatory checks. While there is no improvement in access for NI firms, if we assume that Britain’s future relationship with the EU is in line with the current Political Declaration, firms in Northern Ireland may have better access to the EU market than firms in GB. For existing firms, this competitive advantage may help to increase sales to the EU.
This may also lead to an increase in investment in Northern Ireland. Suppose a jam manufacturer is considering setting up a plant to export to the EU and the UK. If the plant is established in Northern Ireland, on the face of it, the jam can enter both markets duty-free, but if it is established in either the EU or GB, the product may be subject to the tariffs of the other customs territory.
The extent to which existing producers may have a competitive advantage and the incentives for investment are unclear as this will depend on the future agreement between the UK and the EU. The aim of the current government does not appear to be to have a very comprehensive or deep Free Trade Agreement (FTA) with the EU, so it is likely that some tariffs (possibly on agriculture) may remain between the UK and the EU, and there will be regulatory barriers.
https://www.belfasttelegraph.co.uk/...ets-now-use-it-to-our-advantage-38857840.htmlBrexit will be done so let's now use it to our advantage
The spirit of the protocol is to maintain unfettered open market arrangements between NI and GB as well as steps to maintain north-south business.
For the administration of customs duties Northern Ireland will remain in regulatory alignment with the Republic and therefore, linked to the EU internal market trading arrangements.
Northern Ireland goods (and most services) crossing the north-south border in the Republic will trade with no import duties (or charges). Separately, Northern Ireland goods would trade into GB without customs formality.
The administrative arrangements to minimise any trading costs (and avoid liability to customs duty) are the critical element in maintaining the competitiveness of Northern Ireland businesses.
Northern Ireland can gain the best of both worlds - continued frictionless trade with GB and continued frictionless access to the EU - provided that any necessary cross-border or cross-Irish Sea administration is minimised.
What is now awaited is a working arrangement, through the new EU-UK consultative committee (where a NI voice may be allowed) to simplify and minimise the necessary paperwork and any associated costs, including de Minimis provisions.
I wonder does Javid's plan to move away from regulatory alignment with the EU make that all irrelevant?What is now awaited is a working arrangement, through the new EU-UK consultative committee (where a NI voice may be allowed) to simplify and minimise the necessary paperwork and any associated costs, including de Minimis provisions
David Henig former Assistant Director at the Department for International Trade, now UK Director at the European Centre For International Political EconomyHow Northern Ireland could use Brexit to its advantage.
If done right, Northern Ireland could benefit from an unexpected and unwanted agreement.
It should also be remembered that NI will be subject to new and amended EU regulations without any democratic say beyond the general consent to stay within the arrangement every few years, an anomaly ignored by Brexiteers now they have a deal they like for Britain. This will join the long list of Brexit issues for the assembly to be concerned about, and yet it may also present an opportunity. It is assumed that Northern Ireland-based business will have full access to the EU single market, and this may well encourage British businesses to open up an office in the province to take advantage. The rights of those in Northern Ireland to Irish (and therefore EU) citizenship may add to this appeal, for those with only UK passports will soon lose their automatic right to work across the EU. For UK service providers to the EU, employing dual national citizens will be one way to minimise future trade barriers, and Northern Ireland will have the greatest concentration. A future “Invest in Northern Ireland” campaign could do very well.
It is said that Northern Ireland should also benefit from new UK trade deals, such as with the US, but this is more questionable. Given that EU goods can come to Northern Ireland without checks it would not be surprising if countries without EU trade agreements would be concerned about giving these goods preferential access to their markets. Like the promise of unfettered Northern Ireland to Great Britain trade, it may turn out the promise of new trade deals doesn’t quite hold.
There is a huge amount of detail to be established in terms of trade between Northern Ireland and the EU, Northern Ireland and Great Britain, and the UK and third countries. The politics remain sensitive, notwithstanding the revival of the Northern Ireland government. The dependencies on wider UK and EU decisions will be ever present. Yet there is just a hint that NI could take advantage of an unexpected and unwanted agreement to find new opportunities. The Republic of Ireland is already ahead of the UK on most economic measures, but with Northern Ireland some way behind. It would be a real irony of Brexit if the whole island of Ireland soon became more prosperous than Britain.
https://www.thenational.scot/news/18179795.brexit-scotland-snubbed-key-talks-northern-ireland-say/Scotland snubbed in key talks as Northern Ireland has say
THE UK Government has not invited Holyrood ministers to participate in post-Brexit talks, despite the Northern Ireland executive being given a seat at the table, it has been confirmed.
The Tories have committed to inviting representatives from the Northern Irish administration to be part of the UK delegation in any Brexit discussions relating to issues specific to Northern Ireland.
The UK Govt. committed to including NI reps as part of the deal that restored Stormont.https://www.thenational.scot/news/18179795.brexit-scotland-snubbed-key-talks-northern-ireland-say/
What I don't understand is, there is no need for the Government to do any favours for NI. It's not as if they're relying on NI MPs to stay in power, so why are they going out of their way for us, so far as this is concerned?
https://www.express.co.uk/news/uk/1...al-talks-veto-EU-Boris-divergence-latest-newsIreland's Europe Minister Helen McEntee refused to rule out the EU vetoing a Brexit trade deal that divergences from EU rules and regulations. In a sign that the trade talks could quickly become deadlocked, Ms McEntee told Sky News that the level of divergence proposed by the British Government was “worrying” to the EU. This comes after Home Secretary Priti Patel took a tough line on ripping up the EU rulebook after Britain leaves the EU.
After Michel Barnier's speech here, there was a lady from Germany (a Professor of EU law) who said that she has read German legal blogs that say that the deal reached between the UK Government and the EU is good for Northern Ireland, in fact they say it is a little bit TOO good for Northern Ireland and that aspects of it should be legally challenged.Of course NI will end up with far greater access to the EU, and maintain access to existing deals, whilst being cut off from the UK which is the single biggest market.
So NI will probably be better off than the rest of the UK, but still not as good as a position as they are currently in.