‘A sledgehammer to crack a nut’: NI traders bemoan protocol problems

A consignment of 28 boxes of beef-flavoured crisps sums up Dermot Johnson's problems with Brexit, and with the Northern Ireland protocol designed to prevent checks on the Border.

Johnson has been bringing food products through the bureaucratic curtain that fell between Northern Ireland and Britain in January 2021 since the protocol, part of the EU-UK divorce deal covering the post-Brexit trading rules for Northern Ireland, came into effect.

The protocol left Northern Ireland under EU rules for goods, shifting the post-Brexit checks between the EU and the UK from the land border to the Irish Sea and Northern Ireland’s ports on goods arriving in from Britain.

Not everything is getting through. Last week Johnson asked a supplier, a crisp manufacturer in England, to sell the consignment of crisps to Johnson Brothers, his Lisburn-based wholesale and supply business, which sources and sells food products across Ireland, the UK and Europe.

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The supplier declined; he would have to pay a vet to certify the crisps under strict EU sanitary rules on food imports because the beef flavouring was an ingredient of animal origin.

As Johnson sees it, the rules amount to a nonsensical and disproportionate level of bureaucracy to protect against a minimal risk: the crisps were only ever intended for sale in Northern Ireland, yet EU rules require checks as if the crisps were ending up in the Republic and EU single market.

“It is a law focused on the minutiae, not on the big issues,” he said. “Alice in Wonderland is the closest you can get to describe it: I am in it and I cannot explain why half of this stuff happens.”

Citing another example of the "sheer volume of bureaucracy" he must contend with, Johnson says that since January 2021 he has received more than 5,500 emails from the Trader Support Service, the UK government agency set up to make trade with Britain easier. Other red tape tangling up his working days are requirements to fill out forms to say that imported products are not organic and not from China.

A solution, he believes, lies in applying an "extremely light touch and a heavy hand if someone is caught abusing the system"

“I am filling in forms that nobody is ever going to look at, and it is taking me time and effort. Me bringing in 28 cases of crisps is no danger to the EU ever,” says a frustrated Johnson.

While commission and government officials in Brussels and Dublin stress that the EU rules are in place to protect public health and animal health within the single market, Northern Irish companies see the checks as an unnecessary intrusion that costs time and money.

“The protocol is a sledgehammer to crack a nut. How can such a small amount of trade in EU terms account for such a disproportionate amount of bureaucracy?” says Johnson.

“Maybe that should be the negotiation start point: that the bureaucracy should be proportionate to the amount of trade.”

A solution, he believes, lies in applying an “extremely light touch and a heavy hand if someone is caught abusing the system”.

Endless tussles

The problems with the protocol came sharply into focus this week after UK foreign secretary Liz Truss announced that the UK government planned to introduce domestic legislation in the coming weeks that would unilaterally abandon parts of the protocol.

Truss said the legislation would maintain the elements of the trade deal that work and “fix” those that do not. The aim, she said, was to “lessen the burden on east-west trade”.

The move has angered the European Commission, which complains that the UK government has failed to engage with Brussels on proposals tabled last October that would reduce the checks on food products arriving into Northern Ireland from Britain by 80 per cent, halve the amount of customs data fields to be filled out and allow chilled meats such as sausages cross the Irish Sea. It marks yet another moment of crisis in the seemingly endless EU-UK tussles over Brexit.

As the politicians grandstand and bicker, Northern Ireland’s businesses attempt to deal with an uncertain trading future and find a way to manage, day to day. While many support the benefits the protocol brings, they want its problems fixed.

Northern Ireland’s business community view the crux of the problem as the rigid application of a strict international customs code across a long-established, free-trading domestic market.

Grace periods mean the full pain of the protocol is not yet being felt and that fixes are required quickly

Where they can, Northern firms have, since Brexit, sought alternative suppliers in the Republic and elsewhere in the EU that require no paperwork or checks. Official figures show a surge in North-South trade. Where they cannot find alternatives, firms run into trouble. Surveys have shown that one in five Northern traders say their suppliers in Britain are unwilling to send goods to the North.

"This customs code was designed for single commodity bulk movements, like a full container of beef from Brazil, not for someone ordering a pair of shoes from Amazon, " says Stephen Kelly, the chief executive of Manufacturing NI, an industry representative group.

To ease the burden, the number of forms businesses are asked to complete must be reduced, he says. He believes the “burden of guilt” must shift so that goods are no longer viewed as being guilty and at risk of entering the EU single market until proven innocent and shown to be solely for sale in Northern Ireland.

Worse to come

Grace periods mean the full pain of the protocol is not yet being felt and that fixes are required quickly. Full checks are not being carried out on food products moving from UK supermarket chains to their stores in Northern Ireland, a trade that accounts for more than 90 per cent of the food crossing the Irish Sea.

Customs declarations are not required on parcels sent from businesses to consumers, another huge volume of trade between the North and Britain.

"It is almost like there is Coke and Diet Coke, and we are sipping the Diet Coke version of the protocol during the grace period," says Seamus Leheny, policy manager for Logistics UK in Northern Ireland, which represents the transport industry.

“If the grace periods were to end tonight and no mitigation was put in place, that administration barrier becomes a lot higher; that is where you could have problems.”

Kelly cites the example of one Northern Ireland-based engineering company that draws half its supplies from within the UK and the other half from the rest of the world through Britain, yet 100 per cent of what they move across the Irish Sea into Northern Ireland is seen as being at risk of entering the EU single market, even though 97 per cent of what they sell stays in the UK.

To cover the 3 per cent risk, they employ five people to cover the checks. When the grace periods end, that burden will multiply and the firm will need 35 people to process the checks.

“It is huge and it is existential,” he says.

There are major problems ahead if the protocol is turned on fully. Leheny says there are about 400,000 parcels a week coming into Amazon's warehouse in Belfast for consumers in the North.

Stuart Anderson, head of public affairs at the Northern Ireland Chamber of Commerce, says that introducing customs declarations on these parcels would be "simply unworkable".

Northern Ireland’s traders see the seeds of a solution in the “express lane” (proposed by the EU last October) or the “green channel” (suggested by the UK government this week) for goods entering Northern Ireland from Britain that remain in Northern Ireland.

High drama

The problem is the suggestions are stuck in the high drama of post-Brexit politics between the EU and the UK. There has been no significant engagement on the technical challenge of putting a solution in place. This is why the Northern Ireland Business Brexit Working Group, representing Northern businesses and industry, want “tripartite” technical conversations with the EU and the UK so Northern traders can be included in talks and have a say in what will and will not work.

Kieran Sloan, store manager of Sawers, a Belfast deli that sells international gourmet foods, says he can source American products more quickly than European products from Britain since the protocol came into effect. Previously, he could secure next-day deliveries of Mediterranean products from the rest of the UK; now he must wait up to eight days. The cost of shipping from Britain has tripled or quadrupled. These are costs that must be passed on to customers.

"If we are going to continue being part of the UK, there would need to be some sort of exemption for products coming from England, Scotland and Wales. When products get to us, they are staying here; they are not going outside of Northern Ireland. That is a real issue for us," he says.

Businesses say some EU fixes, as proposed, will not work. For example, on the proposal for “NI-only” labels for products destined for Northern Ireland only, suppliers may not want the additional cost of making bespoke labels for a market as small as the North’s.

“Let’s get rid of the stupid parts of the protocol. Goods coming into Northern Ireland that are staying in Northern Ireland do not need to be checked,” says Irwin Armstrong, whose Ballymena-based business Ciga Healthcare sells pregnancy tests and other medical devices to retailers.

"It is minuscule the amount of stuff coming in. Even if it all went in, it would present no danger to the European Union, even if none of it was declared."

I would say that 90 or 95 per cent of the companies in Northern Ireland see the protocol as a bit of a pain in the arse but it is not that much of a pain

Armstrong’s is among Northern Ireland’s businesses that have benefited from the protocol and the lucrative dual market access to both the UK and the EU that it brings to firms in the North. He points to one contract he has won with an English business looking to sell into the EU.

“They can now take our product and distribute it all over Europe without paperwork. That access has brought in a contract worth £1million-£2 million pounds a year,” he says.

Richard Hogg, who runs a renewable engineering and pre-cast concrete business, says the protocol has created business opportunities, allowing him to send his engineers to Sicily as easily as he can to Yorkshire with minimal bureaucracy. He accepts there are a few "niggly" things that could be fixed, such as on food imports and making paperwork smoother.

“I would say that 90 or 95 per cent of the companies in Northern Ireland are in the same boat: they see the protocol as a bit of a pain in the arse but it is not that much of a pain,” he says.

“I am sure it is not beyond man to tidy up a few bits and pieces and for the EU and UK to sit down and talk to us in business and see if we can get them negotiating.”