Paul Faith | Afp | Getty Images DUBLIN — Amid acute political uncertainty and the turmoil of Brexit, the movement of goods on the island of Ireland is undergoing a transformation and a major boost. Since the UK officially left the EU in January 2020, companies have changed their attitude, rethinking the routes they take and the ports they use. This is driven by the Northern Ireland Protocol, an arrangement that allows the UK province to remain in the EU’s single market but requires checks on goods arriving from the rest of the country (England, Scotland and Wales). The EU’s single market seeks to guarantee the free movement of goods, capital, services and labor within the bloc. The recent change can be seen in the trade situation between the Republic of Ireland, which is part of the EU, and Northern Ireland. In the first quarter of 2022, imports from Northern Ireland rose 34 percent year-on-year to €294 million ($310 million) and exports to the north rose 49 percent to €368 million, according to data from Ireland’s Central Statistics Office. “What was clearly happening was that Irish buyers were moving away from GB [English, Scottish and Welsh] suppliers and continuing to trade with the UK by buying from Belfast rather than Birmingham,” Stephen Kelly, chief executive of Manufacturing NI, which represents industry in the region, told CNBC. This occurred in the movement of goods such as food, pharmaceuticals and manufacturing supplies across the land borders of the two jurisdictions, crossing road networks as well as ports for onward journeys. Ian Talbot, chief executive of business group Chambers Ireland, told CNBC that the trade moves are the result of a major adjustment by Irish and Northern Irish businesses following the Brexit turmoil. “There are no catastrophic failures anywhere. There is no idle port, no idle road. Trade is also done in large numbers,” he added, referring to the current arrangement facilitated by the protocol. But he said there was still a caveat about fluctuations in trade and the movement of goods on the island of Ireland, as much of that change occurred amid the Covid-19 disruption in 2020 and 2021. “With the impact of Covid and the lockdowns, it’s very difficult to disentangle all of that when you compare. What year do you compare it to?”

Driving directions

Since early 2021, there has been a rapid increase in the number of cargo ships leaving Irish ports such as Dublin and Rosslare in the south-east of the country for ports in France and Spain to avoid the red tape of transiting through Britain. Zoom Icon Arrows pointing out This marks another change in the profile of freight movement on the island of Ireland with companies eschewing the traditional UK ‘land bridge’ where trucks would cross the Irish Sea into the UK and travel across the country to the port of Dover and after. in France for continental deliveries. “Northern Ireland companies can easily access these routes without having to drive to the east coast of Great Britain,” Talbot said. But Belfast harbor also felt a reverberation. Belfast Harbor saw its 2021 operating profit rise by 13% to £34m, with over 25m metric tonnes of cargo moving through the port. In its annual report, the port cited the grace period for the implementation of the Northern Ireland Protocol as a factor in the increased level of trade. However, he acknowledged that “risks and uncertainties” remain with the end of the grace period. Britain has not yet imposed controls on goods arriving from Northern Ireland.
“The ultimate resulting demand effects on aggregate economic activity from Brexit and the NI Protocol, and their consequent impact on trade, remain difficult to predict,” the report said.

Draft protocol

The UK government’s recently announced bill to circumvent certain aspects of the Northern Ireland Protocol casts a long shadow over the state of trade and the movement of goods within and outside the island of Ireland. The EU has taken legal action over plans to dismantle parts of the deal and the imminent departure of UK Prime Minister Boris Johnson has also increased uncertainty – although potential successors Rishi Sunak and Liz Truss are likely to press ahead with the plans. The bill, as proposed, would create green lanes and red lanes for goods moving into or beyond Northern Ireland. The green lane will be for goods destined for Northern Ireland only and will not be subject to controls, while the red lane will apply controls to goods ultimately ending up in the Republic of Ireland or elsewhere in the EU. Kelly said some elements of the bill, such as the green lane, were “not offensive,” but there was still some doubt about how practical it would be to implement. That doubt will bring back trade concerns in Northern Ireland similar to those felt when a no-deal Brexit was a possibility. “We are potentially worse off than no deal if the UK and the EU don’t find a deal in the coming weeks and months, it’s not just no deal, it’s no deal plus a trade war,” he said. “This will be extremely damaging not just for Northern Ireland but for the whole of the UK and the EU, which will be a double whammy for us.” This is combined with rising inflation and the war in Ukraine, which has hampered supply chains in the wider European context. Kelly said there were many moving parts to the trade, but Northern Ireland’s unique situation would not change. “Northern Ireland will not be physically removed from the border between the UK and the EU,” he said. “Our geography will not change.”