Endgame…..or kick the can down the road?

There’s little point in summarising the past two years of Protocol manoeuvres, other than to say that damage was done, problems have been recognised, key players have changed, fresh ideas have been tabled, and there is better mood music.

Thus starts the New Year.

There is a sense that things have changed in recent weeks and that the political energy is higher. No one connected with the negotiations should be unaware of the problems facing business, as there can be few who have not heard directly from the business community over recent months.

We have travelled to London and Brussels to highlight issues; engaged with politicians from Dublin, Belfast and Washington; and arranged ‘show and tell’ visits to all sorts of businesses across NI.

Latterly, we have written to the new UK Foreign Secretary to invite him to come to NI to meet with the businesses for whom he has the unenviable responsibility to deliver a satisfactory outcome in discussions with the EU.

Throughout this process, the business community has managed to find common purpose, whilst recognising that the Protocol’s operation affects different businesses in different ways.

Certain sectors, such as dairy and meat processors, find the new arrangements work well for them and actually give a market advantage - but this is far from universal as, conversely, the Protocol presents an existential threat to others.

Faced with this diversity of outcome, and recognising the scale and breadth of our own membership, FSB undertook a mapping exercise to understand the picture better and found five distinct cohorts.

There are those for whom the Protocol is working well and who gain a strategic advantage, due in large part to the dual market access it gives them to the rest of the UK and to the EU.

There are those who are largely unaffected – principally in services.

There is a third cohort who are largely unaware of the detail of the impact, other than increased cost, usually because they source from a NI-based wholesaler who is taking the pain, undertaking all of the process, paperwork and extra costs, and then simply passing on a Protocol-admin charge.

The fourth cohort are a cause for concern because whilst they are largely able to continue operating more as less as normal, it is only because of the existence of unilaterally approved ‘grace periods’ that the UK government put in place but which are, at best, unstable and liable to cease.

Finally, the fifth cohort are those for whom the Protocol is causing major difficulty – in some cases risking the entire viability of the business.

Almost all FSB members’ businesses fall into one or other of these five categories. Of the many challenges currently facing our politicians, one is to ensure that we don’t lose the good bits of the Protocol as they strive to minimise and mitigate the bad.

That is why FSB has long-stated that it should not be a negotiation - trading away benefits in an effort to save face and show that the other side has given ground - but, instead, be an exercise in collaborative problem-solving.

But while there is some reason to be optimistic that we are approaching the endgame, with the two key players determined to fix the problem once and for all – inasmuch as that is possible in a ‘live’ agreement - there are signs that some might be attracted to a strategy of delay and constructive ambiguity.

Last month’s very welcome extension by the EU of the grace period for veterinary medicines – extended for three years, rather than the one year that had been expected – was a surprising move that some have interpreted as deliberately taking the urgency out of reaching a resolution.

The suggestion is that the passage of time, possible changes at the next Westminster election, and a general weariness with talk of the Protocol could make that a worthwhile strategy. I do not agree.

Business eschews uncertainty, so the prospect of actually baking-in another three years where the trading status of NI remains in limbo would deter investment and generally have a chilling effect. Instead, our politicians should seize the moment, sift the various solutions that have been proposed by themselves and others, including deepening the Trade and Cooperation Agreement, move beyond the fractious, post-Brexit bickering that prevailed for some time, and deliver a truly transformational settlement that, to all intents and purposes, acts as an ‘economic Good Friday Agreement’.

The improved political mood music must not become the dull score for a long-running soap opera that delivers nothing of interest or value but must, instead, become the glorious soundtrack for one of the greatest political thrillers that sees bold and imaginative thinking and risk-taking win the day.