‘There is no port that stands still’: Brexit turmoil radically changes trade on the island of Ireland

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The UK government’s recently announced bill to overturn certain aspects of the Northern Ireland protocol casts a long shadow over the trade situation.

Paul Faith | Afp | Getty Images

DUBLIN — Amid acute political uncertainty and the upheaval of Brexit, goods traffic on the island of Ireland has transformed and received a significant boost.

Since the UK formally left the EU in January 2020, companies have changed their attitudes and reconsidered the roads they take and the ports they use.

This is prompted by the Northern Ireland Protocol, a regulation that allows the British province to remain in the EU’s internal market, but requires controls over goods coming from the rest of the country (England, Scotland and Wales). The EU’s internal market aims to guarantee the free movement of goods, capital, services and labor within the bloc.

The recent shift can be seen in the trade situation between the Republic of Ireland, which is part of the EU, and Northern Ireland.

According to figures from Ireland’s Central Statistics Office, imports from Northern Ireland grew 34% year-on-year to EUR 294 million ($310 million) in the first quarter of 2022 and exports to the North grew 49% to EUR 368 million.

“What was clearly going on was Irish buyers moving away from GB [English, Scottish and Welsh] suppliers and continue their trade with the UK by buying in Belfast rather than Birmingham,” Stephen Kelly, chief executive of Manufacturing NI, which represents the industry in the region, told CNBC.

This played out in the movement of goods such as food, medicines and manufacturing supplies across the land borders of the two jurisdictions, crossing road networks and taking them to ports for onward travel.

Ian Talbot, the chief executive of business group Chambers Ireland, told CNBC that the trade moves are the result of many adjustments by Irish and Northern Irish companies following the Brexit turmoil.

“There are no catastrophic failures anywhere. There is no port that is idle, there is no road that is standing still. Trade is taking place and in large numbers,” he added, referring to the current arrangement facilitated by the protocol.

However, he said there are still caveats to the variations in trade and movement of goods on the island of Ireland, as much of this change took place amid the Covid-19 disruption in 2020 and 2021.

“With the impact of Covid and the lockdowns, it is very difficult to unravel all that when you compare. Which year are you comparing it to?”

Moving 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, to ports in France and Spain to avoid the red tape of crossing Britain.

This marks another shift in the profile of freight transport on the island of Ireland, with companies eschewing the UK’s traditional “land bridge” where lorries would cross the Irish Sea into the UK and travel across the country to the port of Dover and beyond. to France for continental deliveries.

“Northern Irish companies can easily access those routes without having to drive to the east coast of Britain,” Talbot said.

But Belfast harbor has also felt reverberations. Belfast Harbor saw its 2021 operating profit rise 13% to £34 million, with more than 25 million tonnes of cargo passing 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. But it acknowledged that “risks and uncertainties” remain with the grace period ending. Britain has yet to impose controls on goods coming from Northern Ireland.

“The ultimate inferred effects of demand on overall economic activity from Brexit and the NI Protocol, and the associated impact on trade, remain difficult to predict,” the report said.

Protocol invoice

The UK government’s recently announced bill to override certain aspects of the Northern Ireland protocol is casting a long shadow over the trade situation and freight transport to and from the island of Ireland. The EU has taken legal action against plans to scrap parts of the deal, and the impending departure of British Prime Minister Boris Johnson has also added to uncertainty – although potential successors Rishi Sunak and Liz Truss are likely to plow through with the plans.

The bill, as proposed, would create green lanes and red lanes for goods going to Northern Ireland or beyond. The green lane would only be for goods going to Northern Ireland and not subject to controls, while the red lane would apply controls to goods that eventually go to the Republic of Ireland or elsewhere in the EU.

Kelly said some elements of the bill, such as the green lane, are “not objectionable,” but doubts remain about how practical it will be to implement.

Those doubts will once again cause trade in Northern Ireland similar to those felt when a no-deal Brexit was possible.

“If the UK and the EU don’t reach an agreement in the coming weeks and months, we may be in a worse position than a no-deal. Not only is it no deal, it’s no deal plus a trade war,” he said.

“That will be hugely damaging not just to Northern Ireland, but to the whole of the UK and the EU, which will be a double hit for us.”

This has been accompanied by rising inflation and the war in Ukraine, which has hampered supply chains in the wider European context.

Kelly said there are many moving parts in the trade, but Northern Ireland’s unique situation will not change.

“Northern Ireland will not physically become the border between the UK and the EU,” he said. “Our geography will not change.”



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