Northern firms need post-Brexit convergence with EU rules - report

Firms in the North need any future UK Brexit deal to incorporate “a significant amount of convergence with EU rules” if they are going to continue to trade “seamlessly” across Ireland, an influential business group has warned.

The Confederation of British Industry (CBI) NI, which counts 60 per cent of the North’s largest employers among its members, said at the moment Northern businesses rely heavily on “regulatory convergence” to facilitate their Irish operations and supply chains.

CBI NI director Angela McGowan said that the movement of people, trade and services back and forward across the Border is part of everyday business life in the North.

The latest UK government trade statistics support this observation - the value of exports from the North to the Republic jumped to a high of more than £2.7 billion (€3.08 billion) last year - £347 million higher than the previous year.

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But with, as yet, no indication on any agreement in relation to the Border in Brexit negotiations and stark warnings in a recent UK House of Commons committee report that there is “no evidence to suggest that there is currently a technical solution that would avoid infrastructure at the Border” the status quo is considered to be threatened.

Recent remarks by Labour’s Barry Gardiner, the UK’s shadow trade secretary, where he appeared to underplay the importance of a soft border post Brexit - which is Labour’s position - and suggested that the Government was focusing on the Border issue for economic reasons, have done little to allay concerns in the business community about their future once the UK leaves the EU.

The CBI on Wednesday published a 90-page report outlining what it believes are the existing EU rules that are most important for UK businesses and the UK economy.

Smooth operations

The business organisation said its “smooth operations” report, which details the regulatory needs of 23 industry and service sectors, also shows that any potential new trading opportunities created by a hard Brexit would be outweighed by the greater costs involved.

The report also notes that any changes to rules in one sector could have significant knock-on effects for companies in other sectors and throughout supply chains.

The CBI has suggested there are three principles that the Brexit negotiations should now focus on to secure the best deal for business and the UK economy: where rules are fundamental to the trade or transport of goods, the UK and EU must negotiate ongoing convergence; as part of the new relationship, negotiators should set a new international precedent for liberalising trade in services and digital products and any alignment will need to come with mechanisms for influence and enforcement that benefit both sides.