The decision by the UK government not to introduce border controls for Irish imports from 1 January 2022 is being justified by the fact that Republic of Ireland goods can transit through Northern Irish ports to Britain unhindered.

To catch lorries from the Republic of Ireland entering Britain through Northern Ireland (NI) would require a screening process on all lorries and that would effectively put a barrier of sorts between NI and the rest of the UK.

The protocol controversy has been one way, namely focused on goods entering NI from Britain.

There are basically only two ways that border controls can be implemented. The first is by checking and monitoring, the second is by trusting traders to do the right thing by way of self-declaration.

A possible variation on this is the inclusion of sporadic intelligence-led checks, which is a blending of the two options, but, no matter how sporadic, still treads on the sensitivity of implementing a border control on goods entering Britain from NI.

Next level

Rules of origin are a complexity in all trade agreements, including the trade and co-operation agreement (TCA) between the EU and UK.

For example, under the TCA, wheat grown in England can enter the EU with no tariffs applied. However, if an English merchant imported a boat load of wheat from Canada and proceeded to sell it in the EU, then it would become liable for the full tariff of €148/t.

That is because the tariff-free TCA is confined to goods traded between the EU and UK that originate in either territory and not outside.

Country of origin labelling for meat

Farmers have had a comparable experience with beef labelling rules, which is an EU system that is designed to classify the origin of meat.

To designate beef as Irish, it must come from cattle that are born in Ireland, spend their entire life in the jurisdiction and are slaughtered in an Irish factory.

If, as was often the case, cattle born and reared in the Republic of Ireland were sold at a mart to buyers from NI, then the beef from that animal had no designation.

It couldn’t be described as either Irish or British beef, because it doesn’t meet the rules to qualify for either.

Qualifying goods

It is the same when it comes to trade agreements. If a car is built in the UK, but the component parts come from the EU and Japan, what is the story with where the car’s origin should be?

In the case of cars, the TCA defines the requirement for being UK origin as that 41% of the content comes from the UK, with between 20% and 50% of the remainder coming from the EU.

This hasn’t been addressed yet in a meaningful way by the UK government in relation to what qualifies as an NI-origin good.

At the moment, it is effectively an open door, in that anything that comes from a Northern Irish-based business qualifies.

That means a factory south of the border could send product to a business in the North and, from there, dispatch to the rest of the UK unhindered or unburdened.

Defining what qualifies as Northern Irish

The UK, of course, may define a standard like the EU did with the UK for cars in the TCA.

The standard of adding value is typically used in this process. For example, if a factory in NI imports cattle from the south, kills them in the abattoir, debones and process them, then a clear case can be built around adding sufficient value in NI.

The debate starts about how much needs to be done to make it NI qualifying. Would deboning be enough or even repackaging be sufficient? What about just storing or would even a brief stop-over at a NI address be sufficient?

So far, the protocol debate has been about trying to dilute the absolute EU control mechanisms in relation to deliveries from Britain to NI.

As the UK begins implementing its own controls, this now has to be considered by the UK government from the other perspective.

Its initial response has been to play for more time, but, as the EU and UK edge towards sorting out the movement from Britain to NI, the sequel is in preparation on how the UK manages trade the other way. Protocol 2.0 for 2022 perhaps?