Belfast Businesses Are Getting Over Brexit Faster Than Politicians
Northern Irish Businesses Are Already Moving On From Brexit
(Bloomberg) -- The U.K.’s departure from the European Union might have caused chaos for Northern Ireland, but it’s been good for business at Belfast-based firm Brookvent — at least for now.
The maker of ventilation systems has seen orders jump as customers across the border in the Republic of Ireland sought to avoid the complications of receiving goods from other parts of the British Isles, said Declan Gormley, its managing director. Under the so-called Northern Ireland Protocol that underpinned the wider Brexit deal, the region benefits from being both part of the U.K. and EU single markets for goods.
The trouble is that the protocol remains the most contentious area of the divorce agreement that’s made Northern Ireland such a flashpoint in the political saber rattling between London and Brussels and led to a resurgence of sectarian tension. The current arrangement now hangs in jeopardy, and the danger is that the troubled region gets mired in a precarious limbo as it emerges from the coronavirus pandemic.
British Prime Minister Boris Johnson declared this week it would be “perfectly legitimate” for the U.K. to suspend the agreement covering Northern Ireland. His government is demanding a major overhaul of the deal it signed with the bloc less than a year ago, arguing that its implementation is harming businesses and communities in the historically volatile region.
There have been delays and disruption to goods while port staff faced threats of violence. Businesses have complained of burdensome customs paperwork and grace periods on the introduction of planned checks on chilled meats had to be extended twice following a standoff dubbed the “Sausage Wars.”
Yet while some businesses have struggled to adjust, others have benefited. It may put them at odds with hardline pro-U.K. factions, but their message is clear: it’s time Northern Ireland should be allowed to move on. A recent poll for Queens University Belfast found the majority of people in Northern Ireland now views the protocol as having a positive economic impact.
“I don’t agree with the doom and gloom that is being presented in relation to the protocol,” Gormley said at Brookvent’s headquarters in Belfast, a city scarred by division. “People on the ground are not experiencing that.”
Under the agreement, goods moving into the region from the rest of the U.K. are subject to customs checks if they are at risk of being later moved into the EU. That was designed to avoid a hard border with the Republic of Ireland, but it’s interrupted some trade and triggered a resurgence in tensions as unionists say it undermines their U.K. identity by putting a border in the Irish Sea.
Some industries have already been able to capitalize on the opportunities of dual market access, also because not all of the border checks the protocol will bring about have come into force yet.
Goods imported into the Republic of Ireland from Northern Ireland surged 78% in the first half of 2021 versus a year earlier, climbing to 1.77 billion euros ($2.08 billion). Companies have become “protocol pragmatists,” according to Stephen Kelly, chief executive officer of the Manufacturing NI trade association.
“If you’re sending stuff to the EU and further afield you’re having the time of your life at the moment,” he said. As for the renewed wrangling between the U.K. government and EU, “Everybody’s sick of it,” he said.
Not every business has seen the immediate benefits from the protocol. Smaller companies processing lower-value orders are finding the new customs procedures more of a burden. Yet there is little clamor for a dramatic change in course. Rather, there is a desperate plea for stability.
At Porterhouse Prime Meats, manager Jonathan Uprichard is faced with rising costs because of difficulties in bringing in packaging and machinery from other parts of the U.K. He too, though, sees little upside in triggering Article 16, the way the U.K. would suspend the Northern Ireland Protocol.
Supply chain issues permitting, he plans to expand next year, though that’s as long as there’s more clarity over where Northern Ireland is headed. “It’s hard to plan forward,” Uprichard said at the shop in Belfast he runs with his wife, Debbie. “We can’t do anything until we find out what’s happening.”
Laura Graham-Brown, who owns delicatessen Arcadia on Lisburn Road in Belfast with her husband Mark, echoes the frustration. As a small business largely dependent on imports from mainland Britain, changes to trading practices as a result of Brexit have been challenging. There’s been an increase in paperwork for goods crossing the Irish Sea and some retailers have decided it’s simply not worth supplying the region at all.
Even so, Graham-Brown said she’s starting to find things easier and believes the protocol needs “fine-tuning” rather than a total overhaul. “It’s just the uncertainty that’s killing everyone, the uncertainty of what’s happening,” she said. “Everybody's just in suspended animation. Nobody’s going to spend money and invest in Northern Ireland until they know for sure.”
If Johnson decides to suspend the Brexit agreement, the impact will be felt across the U.K., according to Kelly at Manufacturing NI. Drivers will be afraid of being stuck at customs, compounding the current supply crisis, while there could be legal limbo for goods coming to Northern Ireland, he warned.
“We needn’t worry about what the EU may or may not do in three months, six months, or 12 months’ time because the damage will be instantaneous,” he said.
The key is for Northern Ireland to maintain its unique status in Europe, according to Gormley at Brookvent. One big attraction is its position as the only English speaking country with access to both the EU and the U.K. markets, yet it’s not able to fully capitalize on the opportunity unless those factors exist in perpetuity, he said.
“If we remove the uncertainty and we can get some security on what’s happening with the protocol, then I think over the next, probably one, two, three, five years, you’ll see a lot of investment coming here,” he said. “Businesses like certainty.”
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