Manufacturing & Supply Chain

Responding to the British Government’s policy papers on future customs arrangements and the future of the Irish Border, ISME, the Irish Small and Medium Enterprises Association has stated that some of the aspirations are contradictory.

The Association has stated that while third party reaction to the Customs paper has been negative, we should remember that this represents an opening negotiating position only. It does not reflect what the British government seriously considers to be deliverable in the final exit arrangements. The Customs document concedes that it represents UK Government ‘thinking’ and ‘aspirations.’

Commenting on both policy papers ISME CEO, Neil McDonnell said: “Some of the aspirations are contradictory. An interesting objective from Ireland’s position as a food exporter is the UK’s determination to ‘maintain our high standards for consumers, employees, the environment, and animal welfare.’ If followed through, this would likely preclude meat imports from South America and the USA.”

The aspiration that people and businesses should only have to adjust ‘once’ to a new customs arrangement after an ‘interim period’ is also contradictory. By definition, therefore, the measures that apply to business and people in March 2019 must remain as they are now until we reach the end of the ‘interim period.’ Otherwise, everyone will have to adjust twice. Logically, the UK could not exit the Customs Union until the conclusion of this process.

To be fair, the UK Government acknowledges its position on Customs is ‘innovative and untested.’ This is rather an understatement, since the proposed arrangements would not merely affect the other 27 member states, but would almost certainly affect the trading arrangements underpinning the EEA, EFTA, the Customs Union, and possibly the Comprehensive Economic and Trade Agreement with Canada (CETA).

He added, “Regarding today’s position paper on Northern Ireland and Ireland, the UK reiterates its continued support for the Good Friday Agreement, peace funding, and the Common Travel Area (CTA). Regarding the Border, the UK aspires to arrangements which are as ‘seamless and frictionless as possible.’ Interestingly, the paper notes that ‘in 2015, over 80 per cent of North to South trade was carried out by micro, small and medium sized businesses’ amounting to ‘local trade in local markets.’ Whether the UK position is that this trade should simply be ignored for Customs purposes is unclear. The paper acknowledges the significant enforcement issues presented by ‘Sanitary and Phytosanitary (SPS) measures for agri-food.’ Cross Border energy transmission is recognised as a key issue”

“The aspirational tone of the Customs policy paper is continued in the Northern Ireland and Ireland paper. Crucially, the UK Government points out that the latter is dependent on the former; i.e. The Northern Ireland paper sets out a number of ‘Proposals for Dialogue,’ but makes clear that achievement of a soft Border is largely dependent on suitable Customs arrangements. Specifically, it says ‘Delivering our shared objective will require detailed joint work and can only properly be finalised in the context of the new, deep and special partnership that the UK wishes to build with the EU.’ Intentionally or not, this suggests that the priority of maintaining a soft Border is entirely subservient to, and dependent upon the UK getting agreement on Customs measures.”