Why Northern Ireland is the Big Brexit Winner

Understanding the rules of customs & global trade for Northern Ireland will be crucial for customs managers and global trade professionals. It is time to explain in simple terms how it will work. Here is why Northern Ireland is the big winner of Brexit

This sounds like the best of both worlds. And it is. If applied correctly, For Northern Ireland, it is an opportunity and a challenge at the same time.

Terminology sorted

Let's get language straight first:

  • UK = United Kingdom of Great Britain and Northern Ireland

  • GB = Great Britain without Northern Ireland (aka England, Wales and Scotland or the UK mainland)

  • NI = Northern Ireland

  • The Republic of Ireland = The island of Ireland without Northern Ireland = Eire

A special situation

Very early on in the negotiations ahead of the United Kingdom’s withdrawal from the EU, both the United Kingdom and the EU acknowledged the unique situation of Ireland and Northern Ireland. They agreed that a specific solution was needed to reconcile the different interests at play.

The WINNER: Northern Ireland This solution was found benefits Northern Ireland in three ways:

  1. Avoids a hard border between Ireland and Northern Ireland, and safeguards the all-island economy and the Good Friday (Belfast) Agreement in all its dimensions;

  2. Preserves the integrity of the EU’s single market, along with all the guarantees it offers in terms of consumer protection, public and animal health, or combatting fraud and trafficking,

  3. Maintains Northern Ireland in the UK customs territory so that it may benefit from future Free Trade Agreements (FTAs) that the UK may conclude with third countries.

N.I gets it all: Single Market Access without being part of EU

This means that Northern Ireland gets to follow EU Customs Rules without being part of the EU Customs Territory. It gets full access to the Single Market of the EU without being part of the EU. It gets access to some 450 million citizens (including unhindered access to the Republic of Ireland) without any Free Trade Agreement having to be signed.

Part of the UK Customs Territory

At the same time, it gets to be part of the UK Customs Territory. So no need for any controls or checks getting into your own territory, at least in theory (what to do with goods coming from the EU Single Market - how to check that they comply with UK rules?). It can also benefit from Free Trade Agreements that the UK concludes. (what about EU trade agreements, do they also apply? Can NI benefit from the best of both worlds? If so, does this means that it is OK to bring in products at a lower rate of duty into Belfast that it would cost to get these goods into Dublin? Can you then just ship them across from Belfast to Dublin without any tax adjustment?)

Just sit it out and reap the rewards

Northern Ireland's luck does not depend on any further agreement, like a free trade agreement. The Protocol on Ireland and Northern Ireland will become applicable at the end of the transition period. It was conceived as a stable and lasting solution, and it can be expected that it will apply alongside any agreement on the future partnership.

Overall, that's what I call lucky. Or is it?

Let's examine a little closer:

What has been agreed in the Protocol on Ireland and Northern Ireland

1. EU rules for Products & Union Customs Code

Northern Ireland will remain aligned to EU rules related to goods and the Union's Customs Code will apply to all goods entering Northern Ireland. This avoids any customs checks and controls on the island of Ireland.

2. Controls will take place from GB -> NI Necessary checks and controls will take place on goods entering Northern Ireland from the rest of the United Kingdom, including for example, Border Inspection Posts to ensure that the necessary sanitary and phytosanitary (“SPS”) controls are carried out.

3. EU Customs Duties apply

EU customs duties will apply to goods entering Northern Ireland.

If goods are not at risk of entering the EU's Single Market, the UK tariff will apply.

No customs duties will be payable, however, if it can be demonstrated that goods entering Northern Ireland from the rest of the UK are not at risk of entering the EU's Single Market.

I agree

The EU and the United Kingdom have agreed to create a new mechanism on “consent”, which will give the Northern Ireland Assembly a decisive voice on the long-term application of relevant EU law in Northern Ireland, based on intense discussions between Ireland and the United Kingdom. This consent mechanism concerns the substantive issues of regulatory alignment on goods and customs and other matters.

A vote every four years: 2025 for 2027 In practice, this means that four years after the end of the transition period, the Assembly can by simple majority give consent to the continued application of relevant Union law, or vote to discontinue its application, in which case the United Kingdom would notify the EU. In such a case, the Protocol will cease to apply two years later. Every four years thereafter, the Assembly can vote on the continued application of relevant Union law. In case a vote of the Assembly gathers cross-community support for the continued application of relevant Union law, the next vote can only take place eight years thereafter.

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Blog: Brexit? Who cares about this now? Here is why you still should….

Blog: UK Exit: What customs & global trade rules apply in EU to UK & UK to EU trade from 1 Feb 2020?

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