Northern Eire appears to be like south as Brexit takes chew out of UK commerce hyperlinks
© Reuters. FILE PHOTO: Spread of the coronavirus disease (COVID-19) in Northern Ireland
By Padraic Halpin and Kate Holton
DUBLIN/LONDON (Reuters) – As a major supplier of food in Northern Ireland, Lynas Foodservice is sourcing more goods such as cheese from across the open border with EU-member Ireland to avoid the bureaucratic trade hurdles being erected with Britain after Brexit.
The supplier of coffee chains, fast food giants and pubs has rerouted European stock via Dublin and sought out Irish or EU suppliers to ease the pressure once British goods require customs checks and paperwork to enter the province when the United Kingdom exits the European Union on Dec. 31.
Northern Ireland will remain aligned to the EU’s single market and goods arriving in Northern Ireland will be subject to EU customs rules.
Managing Director Andrew Lynas told Reuters that he expects more administrative paperwork even if Britain secures a trade deal with the bloc, and has started to look for more products such as cheese and charcuterie from south of the Irish border.
“The two big things we’ve worked on are the routing of goods through Dublin and how to source more EU and Irish (produce),” he told Reuters. “We’ve absolutely been doing that and I think regardless of what happens, more of that will happen.”
A subtle reorientation of parts of British-run Northern Ireland towards the Irish Republic almost a century since Ireland won independence from the British crown is one of the most intriguing consequences of Brexit.
While Irish unity remains either a distant dream or a distant nightmare, Brexit has strained the bonds that tie the United Kingdom: Northern Ireland and Scotland voted to remain in the EU in 2016, while England and Wales voted to leave.
Preserving the delicate peace in Northern Ireland without allowing the United Kingdom a back door into the EU’s markets through the UK-Irish 310-mile land border was one of the most difficult issues of the Brexit divorce talks.
In essence, they agreed a fudge that keeps Northern Ireland with a foot in both camps – part of the UK’s customs territory but also still aligned with the EU’s single market for goods after Dec. 31.
While the deal avoids a hard border between Northern Ireland and Ireland and upholds the 1998 Good Friday peace deal, it complicates trade – especially between Northern Ireland and the rest of the United Kingdom.
At 10.4 billion pounds ($13.89 billion), Britain accounted for 60% of all goods purchased outside Northern Ireland in 2018, more than four times the amount imported from Ireland, the Northern Ireland Statistics and Research Agency’s most recent data showed.
While the level of trade across the Irish border has almost doubled since the 1998 peace deal brought an end to Northern Ireland’s “Troubles”, Lynas said Britain is and will remain an incredibly important market, suggesting any post-Brexit changes may be incremental.
His nearly 70-year-old family wholesale business currently sources around a third of its food goods from Britain.
However, some British-based suppliers face a more abrupt change. Scottish suppliers of seed potatoes will be prohibited from selling into the bloc – and to Northern Ireland – from Jan. 1.
They will remain shut out until third-country equivalence is granted, enabling the trade in certified seed potatoes to continue.
Archie Gibson, the executive director of Agrico UK which has 80 growers in Scotland and 20 in England, says the industry has been running around like a “headless chicken” to try to export as much crop into the EU as possible before Jan. 1.
He worries about the long-term hit after one Irish buyer secured new suppliers outside of Britain to stock supermarkets.
“They tend to be pretty loyal, so when they move the likelihood is they won’t be rushing back,” he said.
The UK’s biggest supermarkets have also warned in recent weeks that they may not be able to provide the same variety of food to their Northern Irish stores due to uncertainty over how the new requirements will work.
A poll in late November by the UK Food and Drink Federation showed that almost 40% of firms plan to pause or reduce deliveries to Northern Ireland from Britain to adapt product lines or assess whether the market remains workable.
Three- and six-month exemptions agreed since then to shield larger traders from some of the most onerous barriers, such as the need to produce export health certificates for any British product of animal origin, may ease the transition in January but are no way to manage complex supply chains in the long term.
“The grace periods are not very long-term,” Northern Ireland Retail Consortium Director Aodhán Connolly told one of the near daily webinars that trade groups are running for businesses grappling with huge changes that have only been announced bit by bit over the last two weeks.
“They are short-to-medium-term and that shows the EU and the UK seem to be leaning towards a rejigging of the supply chain from Britain towards Europe and Ireland.”
While the sums involved are small, the politics are not.
The 1998 peace deal ended three decades of tit-for-tat killings by mainly Catholic Irish nationalists, who opposed British rule in Northern Ireland, and mainly Protestant pro-British loyalists.
Any move away from decades-long UK supply chains in favour of all-island trade could boost the long term case for Irish unity and thus destabilise the devolved power sharing government in Belfast.
For nationalists, the benefits of an all-Ireland economy are part of the case for unity. For Unionists, such trends are evidence that the union is in danger.
The largest unionist party, the Democratic Unionist Party (DUP), has said it will lobby hard against any permanent trade barriers with the rest of the United Kingdom.
“The (UK) government needs to be bold and where necessary be prepared to act unilaterally to underpin our full place in the most important internal market for us – that of the UK,” the DUP said earlier this month.
In the meantime, Andrew Lynas, is still trying to make sense of it all, including potentially new rules on tariffs, trucks, trade, labels, palettes and ports.
As a Northern Irish business that buys from Britain to sell in the province, the Republic of Ireland and Scotland it was always going to be tough.
“We just want the movement of goods,” he said. “If there’s paperwork and tariffs to deal with, they can always be dealt with. But you want to make sure the goods flow.”
($1 = 0.7485 pounds)