Dan Bouncher on the impact of the Protocol on Northern Ireland’s economy
Brexit

Dan Bouncher on the impact of the Protocol on Northern Ireland’s economy

The following is the full text of Dr Boucher’s comments quoted in today’s News Letter.

“One of the curious things about the Northern Ireland economy since the introduction of the Protocol/Windsor Framework has been that services have done so much better than manufacturing. This is odd because the Protocol/Windsor Framework pertains to goods and not services, offering the goods component of the Northern Ireland economy the unique opportunity of ‘Dual Market Access.’ In this context one would have expected that the biggest winner since January 2021 would have been our manufacturing sector. Speaking on the View this week, the Economy Minister was challenged on this point but struggled to provide a convincing answer.

“Dual market access is spoken of as if Northern Ireland has been afforded a uniquely privileged position because we are blessed with the opportunity of being located in two markets at the same time. Being part of a market means being able to move goods freely within it (having unfettered access) without having the expense of negotiating a customs or international SPS border. Dual Market Access was about getting this benefit for Northern Ireland both in terms of the rest of the UK and the Republic of Ireland/EU. There is, however, a small problem. The Windsor Framework does not provide Dual Market Access and can no more do so than it can provide a square circle.

“What the Windsor Framework actually offers us is access to the Republic of Ireland/EU without having to engage with the expense of crossing a customs and international SPS border, but the price of this is the erection of a customs and international SPS border within the UK, separating Northern Ireland and Great Britain. Of course, trade can still take place within the UK between GB and NI, but there is no way of crossing the border – whether you use the Green or the Red Lane – without having an export number and having to negotiate the expense of a customs border and an international SPS border. The only concession here is that if your goods are eligible for the Green Lane, which requires negotiating additional hurdles like becoming a trusted trader, some of the other processes are made a bit simpler.

“In response to this some might say, well, even if we don’t enjoy real dual market access, to the extent we get the benefit of being able to move goods freely within one economy, together with the option of accessing another economy for some purposes via a Green Lane which is less burdensome, surely that is a net gain? That might sound like a net gain but there are three huge problems.

“First, up until 2020 Northern Ireland operated as a fully integrated part of the UK economy and the 67 million people in GB are our closest and most important market which we can now access subject to an international customs and SPS border. Whatever economic advantages there are of getting unfettered access to the Republic are more than offset by finding that, even in the Green Lane, our access to our main market is now fettered by a customs and international SPS border. Second, many businesses don’t regard the Green Lane as simpler and are opting either for the Red Lane or ceasing to trade with Northern Ireland. Third, our inclusion in the same single market for goods as the Republic, notwithstanding our remaining in the UK, means that we are now subject to the indignity of disenfranchisement, of having our laws made for us by 27 other countries in 300 different areas, laws that are made for us by a foreign Parliament in which we have no representation.

“Far from presenting us with the best of both worlds, this is plainly the worst of both worlds.

“If the UK Government had insisted on Mutual Enforcement, the means of managing the UK-ROI land border that did not involve partly disenfranchising 1.9 million of its citizens, one would expect that not only would our services sector have flourished since January 2021 but that our manufacturing sector would have also performed significantly more strongly since then.“