Dodds warns of need for ‘reciprocation’ for tariff-free Irish trade

It comes after UK government made two parallel major announcements today – one concerning new tariffs (the ‘UK tariff regime announcement’) and another concerning imports to Northern Ireland from the Republic of Ireland (the ‘avoiding a hard border announcement’).

The first one, the ‘UK tariff regime announcement’, sets out the kind of tariffs which will apply to EU goods entering the UK in the event that of a ‘no deal’ Brexit in 16 days’ time.

The second one, the ‘avoiding a hard border announcement’, sets out a key exception to these new tariffs – namely, goods exported from the RoI into NI.

This says there will be no tariffs and virtually no checks on RoI goods arriving in NI in the event of a ‘no deal’ Brexit.

It is not yet clear if RoI goods going to GB via NI are still meant to be subject to tariffs (see below).

However the whole arrangement is “unilateral” the government said, meaning there is no guarantee that the same will apply to goods going the other direction.

So in other words, whilst there will be no tariffs and checks conducted on RoI goods entering NI, there may be tariffs and checks conducted on NI goods entering RoI.

Nigel Dodds, DUP leader in Westminster, told Good Morning Ulster: “What we’re very clear about is we don’t want a hard border on the island of Ireland. The government is saying that they will not take steps to do that.

“Michel Barnier also has said that in the event of a ‘no deal’ then there won’t be any checks on the border; it’ll be done operationally away from the border, so clearly there is no need for the Irish Republic to introduce these checks if they don’t want to, and so far their planning hasn’t included that.

“But we’ve to wait and see. And likewise on the issue of tariffs, the government is saying on that there will be tariffs on to the rest of the UK not for Northern Ireland.

“And if the Republic and the EU don’t reciprocate on that, then clearly the government will have to look at that.

“This is an offer by the government to try to avoid problems. But if it’s not reciprocated, either in terms of hard border infrastructure or in tariffs from Northern Ireland going in to the south, then clearly the government will have to look at that.”

IS NI TO BE A STAGING POST?:

The ‘UK tariff regime announcement’ says that almost all goods from the EU’s 27 nations entering the UK will be subject to zero tariffs.

However, it estimates that about 13% of trade will have tariffs imposed on it.

In large part this means agricultural goods.

The way the tariffs have been set out is labyrinthine.

Instead of being a flat rate they are expressed as a proportion of the EU “most favoured nation” rate, making it extremely hard to calculate – for example, the EU-to-UK import tariff on beef for example is to be set at “53% of relevant EU most favoured nation rate”.

However the non-agricultural tariffs are much more straightforward.

For instance, on the first day of a ‘no deal’ Brexit there will be a 2.1% tariff rate set for EU fertiler entering the UK; a 0.9% rate for textiles; a 1.2% rate for ceramics; a 2.9% rate for transport equipment; and a 10.6% and 12.6% rate on finished cars and buses, respectively.

However, none of the above applies to goods going from RoI to NI.

Instead the UK government has said it will “not introduce any new checks or controls on goods at the land border between Ireland and Northern Ireland, including no customs requirements for nearly all goods”, to ensure “no return to a hard border between Northern Ireland and Ireland”.

While RoI-to-NI trade will be tariff-free, it is not yet clear how any of this applies to RoI goods moving through NI and onwards to GB.

In other words, NI could become a mere staging post, allowing RoI firms to move their goods across the border and then into GB without paying tariffs.

If that was the case, then Irish farmers would have total tariff-free access to the GB market provided they ship their produce via Belfast or Larne instead of Dublin.

Even if tariffs are supposed to be imposed on RoI goods transiting through NI there may be ways around this.

For example, it is not apparent whether there would be anything to stop a hypothetical firm called Monaghan Mega Meats setting up a ‘paper’ version of itself in Armagh called Monaghan Mega Meats NI, “selling” its own produce to the NI company, then exporting it tariff-free to GB.

SOME BORDER CHECKS... BUT WHERE?

There are a handful of exceptions to this new ‘no checks’ rule from RoI to NI, such as endangered species and hazardous chemicals”.

In addition, the government has said: “To protect human, animal, and plant health, animals and animal products from countries outside the EU would need to enter Northern Ireland through a designated entry point.”

Whilst the government has said this would be “a Border Inspection Post”, it is not clear where this is.

Meanwhile Belfast International Airport is the “designated point of entry for endangered species and rough diamonds entering Northern Ireland”.