No deal Brexit: No tariffs for Irish goods going to NI

2 weeks ago

Irish goods entering the Northern Ireland market will not face tariffs in a no deal Brexit.

However, Irish products entering the rest of the UK would face high tariffs on a range of food products.

The details are contained in a new no deal Brexit plan published by the government.

There will also be no checks or controls on the Irish border, according to the plan.

It says the plan recognises the unique circumstances of Northern Ireland.

It is possible that while Irish products would enter Northern Ireland tariff free, products moving in the other direction would face tariffs.

The government said it recognises that Northern Ireland’s businesses and farmers will have concerns about the impact that the government’s approach will have on their competitiveness.

It stated: “These are the only steps the UK government can unilaterally take to deliver on our absolute commitment to avoid a hard border in the event of no deal.”

It added that there will be no checks or controls on goods moving from Ireland to NI.

The government is also understood to be confident that the arrangement will not conflict with World Trade Organization rules.

Typically the WTO expects all members to be treated equally. So if zero tariffs are applied to one member they should be applied to all members.

The special arrangement for Northern Ireland would appear to conflict with that.

It is understood the government could invoke an exemption to that non-discrimination principle.

European Commission spokeswoman Margaritis Schinas said they would analyse the compliance of the UK plan with WTO law and said the “differential treatment of trade on the island of Ireland and other trade between the EU and the UK raises concerns.”

She added: “In the event of no deal, the union has already made clear it will apply its normal third country trade regime to all trade with the UK and accordingly charge tariffs on imports from the UK to into the EU.”

‘Strictly temporary’

The government said the measures would be “strictly temporary” and that its priority would be to enter into discussions urgently with the European Commission and the Irish government to jointly agree long-term measures to avoid a hard border.

It said it would only apply a small number of measures necessary to comply with international legal obligations, protect the biosecurity of the island of Ireland, or to avoid the highest risks to Northern Ireland businesses – which will not require land border checks.

It is understood the government acknowledges there will be a risk of Irish smugglers using Northern Ireland as a backdoor to get goods into GB tariff free.

They intend to tackle this with an ‘anti avoidance rule’ which will be enforced on the basis of intelligence.

There is no plan to have routine checks or controls on Northern Ireland goods crossing the Irish Sea.

Analysis: John Campbell, NI economics & business editor

What is being proposed here is quite extraordinary.

You would have a scenario in which, if you’re a food exporter in the Republic of Ireland and send goods to Holyhead, you will face tariffs. If you send it over the border to Newry, you will not face tariffs.

However, you could have the situation in which farmers and food producers in Northern Ireland trying to send their stuff in the other direction will face tariffs.

That will be up to the Irish government and the EU to decide.

So it will seriously undermine the competiveness of Northern Ireland farmers.

It said that to prevent unfair treatment of Northern Ireland businesses, goods arriving from the Republic of Ireland would still be subject to the same VAT and excise duty, and the UK government would continue to collect these taxes on Irish goods in future.

Secretary of State Karen Bradley said: “The government has been clear that a deal with the European Union is the best outcome for Northern Ireland.

“But we will do all we can to support people and businesses across Northern Ireland in the event that we leave without a deal.

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“The measures announced today recognise the unique circumstances of Northern Ireland. These arrangements can only be temporary and short-term.”

It is still not clear what the Irish government will do on its side of the border if Britain leaves the EU without a deal.

The Irish junior minister with responsibility for European affairs has described the proposed tariffs as a lose-lose situation for both parts of the island.

Speaking on RTÉ radio Helen McEntee said that while Dublin will need more time to digest what is envisaged by the UK it would be a disaster for Irish farmers.

The DUP MP Nigel Dodds said the Republic of Ireland and the EU must reciprocate.

“This is an offer by the government to try to avoid problems,” he said.

“But if it’s not reciprocated, either in terms of hard border infrastructure or in tariffs for Northern Ireland going into the south, then clearly the government will have to look at that.”

Smugglers’ charter? Shane Harrison, BBC News NI Dublin correspondent

During the Troubles there was a big smuggling problem, including some paramilitary involvement.

When you think about it, were there to be two separate markets – the single market on one side and British market on the other – it’s an invitation to crime, a smugglers’ charter.

The proposals are said to be temporary, I would have thought that would be a statement of the obvious because of the smuggling implications.

Are the EU going to do something similar? I would very much doubt it, because the European Union has been very consistent in the view that the protection of the single market is very important.

Where exactly would the protections of the single market take place if not at the border?

The prime minister lost a second vote on her withdrawal deal in Parliament by 149 votes on Tuesday evening.

Those voting against the deal included the 10 Democratic Unionist Party (DUP) MPs who have been propping up Theresa May’s government.

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Opposition to the government’s plan focused on the backstop, the insurance policy to avoid a hard Irish border after Brexit in the event of a wider trade deal not being reached.

The DUP will vote against a motion in Parliament that would rule out the UK leaving the EU with no deal.

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