UK/EU Withdrawal Agreement
We all watch the news, so I’m sure you’ve seen the latest developments in the negotiations for the UK to leave the EU. Below is an update, plus a request for your help right at the end of this (long!) post.
MNI have been actively engaged with negotiators from both sides for a number of months making it clear that any potential Backstop must work for our firms and offering suggestions on how to make that happen. Indeed we offered push back on some elements of the EU’s draft when we met Task Force 50 in Brussels last month which has resulted in significant changes in the final Agreement published last week.
We have welcomed, alongside all other business and trade groups, the Agreement between the UK and the EU. The alternative is no deal, crashing out in March and the resulting consequences including tariffs and checks which will destroy businesses. John Campbell (BBC) last week reported that no deal brings costs 10x more than a backstop, cutting £1.1 - £1.5bn from our firms.
All business and trade bodies agree that ‘No Deal’ is not an option.
For the avoidance of doubt, the UK crashes out on 29th March 2019 without a Withdrawal Agreement. If an Agreement is accepted by Parliament (and the EU27) then a transition period of 21 months is in place, rules and market access as now remain the same. The UK and EU cannot agree a new relationship until the UK then leaves on 31 December 2020.
If the cost is the ‘Backstop’ in order secure the transition period and for these negotiations to continue to the next, more productive phase sorting the future UK EU relations and a free trade deal then we believe that is acceptable. We believe that issues are not insurmountable.
So, what does the Agreement mean? The EU and the UK have offered some short technical notes to avoid the need to review the full 580+ page legal agreement!
EU Press Release / Explainer – http://europa.eu/rapid/press-release_MEMO-18-6423_en.htm
UK Technical Note on NI – https://www.gov.uk/government/publications/withdrawal-agreement-explainer-and-technical-explanatory-note-on-articles-6-8-on-the-northern-ireland-protocol
* We will have unfettered access to the EU and the UK market – no sales are threatened. There will be some need for checks for goods coming into NI – this is mostly building on checks already in place such as live animal checks at Larne. Many checks will be in the market and not at any border. There is a commitment for both sides to work to reduce these checks.
* The backstop would ensure no quotas, tariffs nor origin rules between GB and NI and with the EU – a big, big win. That means no costs W/E as well as N/S. A completely unique, and very attractive proposition for investors interested in NI as a location to benefit from free access to both the UK and EU markets.
* We would be able to benefit for existing EU trade deals and the UK can include us in their new trade deals – the EU are only interested in what arrives into its market to circulate.
* Ability for NI Qualified Persons (QPs) to release pharma products – likely the same status for NI vets etc.
* For some, important market authorisation certification, this will need to be done by EU27 authorities but this needs to be done once – UK will recognise NI products certificate if provided by an EU body. This is important for things like CE marking for all our machinery manufacturers, Construction and Use certificates for transport equipment etc.
* A UK(NI) or UK(Northern Ireland) origin and labelling status allows our firms to identify goods as having authority to be in either the UK or EU markets and in markets secured by the relevant global trade deals.
* Only UK authorities will administer processes – no EU involvement (but maybe audit as with Chinese vets for instance). We remain in UKs VAT area, HMRC still run the show. NI established firms will continue to have access to the VIES system meaning there’s no need to pay VAT at the Border – huge benefit over what other UK firms will have to fund from cashflow.
Our position has been that if the UK was to leave the EU, then the firms, jobs and investment should be protected. Indeed, positioning us as a ‘Bridge rather than a Border between the UK and the EU’ would allow firms to prosper and create Northern Ireland as one of the most attractive locations in the world. This Agreement, should it be accepted could create that environment – allowing us to have open, unfettered access to both markets.
So, what now?
Over the coming days, we will be having high level engagements and likely more media interest. Having read the notices, having consumed the media, we’d like to know how you now feel about this Agreement. Please click the link below and let us know:
If you have any questions on the above, or if you’d like some clarity from others, please don't hesitate in contacting us.