The announcement from the UK government that it will withdraw the clauses in the Internal Market Bill which threatened to violate the Northern Ireland (NI) protocol in the Brexit withdrawal agreement gives certainty to continued uninterrupted trade on the island of Ireland. Unfortunately though, trade with Britain remains shrouded in uncertainty, even if a basic trade deal is agreed, irrespective of which part of Ireland it comes from.
NI factories not ready
This announcement triggered a warning by the meat industry in NI. Through its trade association, the Northern Ireland Meat Exporters Association (NIMEA), a strongly worded letter was addressed to Michael Gove MP, the UK cabinet minister responsible for delivery of Brexit.
The letter warns that the NI industry is not ready for new trading conditions at the end of the transition period on 31 December and has called for an implementation period for up to a year to accommodate the introduction of new arrangements.
Flexibility has been granted to NI supermarkets that are supplied from distribution centres in Britain to continue imports of goods without veterinary certification for a grace period. This will not be granted on a permanent basis and in the long-term these supermarkets will have to either comply with certification or make alternative EU supply arrangements.
Supermarkets supplies
Goods shipped from Britain to NI supermarkets are in this interim arrangement deemed low risk of entering the EU single market, as the supermarkets are seen as the end of the chain.
This is not a view shared with the NI meat processing industry which sources huge quantities of beef and sheep carcases in Britain for processing. The majority of this is returned to Britain, though parts of the carcase are better sold in continental EU markets. This is a key part of the supply for the industry in NI which had output in 2018 of £1.4bn (€1.6) from a domestic kill of 440,000 cattle and 418,000 sheep in 2018.
If the EU and UK agree a tariff-free deal, this business can continue, but with the added burden of arranging veterinary certification.
This outcome though is also likely to cause issues due to doubts about the availability of vets in Britain.
Large NI finishers have been buying increasing numbers of cattle in southern marts in recent months and if problems arise with importing from Britain, NI factories will likely look for more supplies from south of the border.
Of course if no deal is agreed and tariffs are applied, this could present an option to get Irish beef into the UK without tariffs.
Veterinary certificates and customs paperwork is also a major burden that Irish exporters will have to deal with after 1 January. All Irish factories have experience of completing the necessary documentation for sales to third countries, but this currently represents only between 5% and 10% of their business.
When the UK is added to this, it will increase the bureaucracy hugely. Similar paperwork will also be required for sales to the rest of the EU that use the UK as a landbridge after 1 January.
Burdens
All of this means that even if a no tariff trade deal is agreed between the UK and EU, the burden of doing business will increase dramatically after the 1st January on both sides of the border.
Cross-border trade will be okay, which is a direct benefit to farmers but increases indirect costs on exporters due to the added red tape. These burdens may be hidden from farmers, but will ultimately be reflected in farm gate prices.
In brief:
Agreement on protocol implementation ensures trade continues uninterrupted on the island of Ireland after 1 January.NI supermarkets have exemption from certification rules for a transition period, but not long-term.No mention of implementation period requested by NI meat processors.Potential demand from NI factories and finishers for cattle if there is a deficit in British supplies after 1 January.Phasing in of veterinary certificates by UK in first half of next year – they will be required along with customs documentation for Irish exports using UK landbridge.
The announcement from the UK government that it will withdraw the clauses in the Internal Market Bill which threatened to violate the Northern Ireland (NI) protocol in the Brexit withdrawal agreement gives certainty to continued uninterrupted trade on the island of Ireland. Unfortunately though, trade with Britain remains shrouded in uncertainty, even if a basic trade deal is agreed, irrespective of which part of Ireland it comes from.
NI factories not ready
This announcement triggered a warning by the meat industry in NI. Through its trade association, the Northern Ireland Meat Exporters Association (NIMEA), a strongly worded letter was addressed to Michael Gove MP, the UK cabinet minister responsible for delivery of Brexit.
The letter warns that the NI industry is not ready for new trading conditions at the end of the transition period on 31 December and has called for an implementation period for up to a year to accommodate the introduction of new arrangements.
Flexibility has been granted to NI supermarkets that are supplied from distribution centres in Britain to continue imports of goods without veterinary certification for a grace period. This will not be granted on a permanent basis and in the long-term these supermarkets will have to either comply with certification or make alternative EU supply arrangements.
Supermarkets supplies
Goods shipped from Britain to NI supermarkets are in this interim arrangement deemed low risk of entering the EU single market, as the supermarkets are seen as the end of the chain.
This is not a view shared with the NI meat processing industry which sources huge quantities of beef and sheep carcases in Britain for processing. The majority of this is returned to Britain, though parts of the carcase are better sold in continental EU markets. This is a key part of the supply for the industry in NI which had output in 2018 of £1.4bn (€1.6) from a domestic kill of 440,000 cattle and 418,000 sheep in 2018.
If the EU and UK agree a tariff-free deal, this business can continue, but with the added burden of arranging veterinary certification.
This outcome though is also likely to cause issues due to doubts about the availability of vets in Britain.
Large NI finishers have been buying increasing numbers of cattle in southern marts in recent months and if problems arise with importing from Britain, NI factories will likely look for more supplies from south of the border.
Of course if no deal is agreed and tariffs are applied, this could present an option to get Irish beef into the UK without tariffs.
Veterinary certificates and customs paperwork is also a major burden that Irish exporters will have to deal with after 1 January. All Irish factories have experience of completing the necessary documentation for sales to third countries, but this currently represents only between 5% and 10% of their business.
When the UK is added to this, it will increase the bureaucracy hugely. Similar paperwork will also be required for sales to the rest of the EU that use the UK as a landbridge after 1 January.
Burdens
All of this means that even if a no tariff trade deal is agreed between the UK and EU, the burden of doing business will increase dramatically after the 1st January on both sides of the border.
Cross-border trade will be okay, which is a direct benefit to farmers but increases indirect costs on exporters due to the added red tape. These burdens may be hidden from farmers, but will ultimately be reflected in farm gate prices.
In brief:
Agreement on protocol implementation ensures trade continues uninterrupted on the island of Ireland after 1 January.NI supermarkets have exemption from certification rules for a transition period, but not long-term.No mention of implementation period requested by NI meat processors.Potential demand from NI factories and finishers for cattle if there is a deficit in British supplies after 1 January.Phasing in of veterinary certificates by UK in first half of next year – they will be required along with customs documentation for Irish exports using UK landbridge. 
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