Manufacturing businesses in Northern Ireland have made “significant” strides towards adjusting to new trading arrangements that were imposed after Brexit, according to the region’s trade body.
A survey by Manufacturing NI found that less than a quarter of its members were struggling with the so-called Northern Ireland protocol, which governs trade in the region. This compared with more than 40 per cent six months ago.
The findings, which will be published on Friday, will add weight to demands from the region’s business for the EU and the UK to settle their differences over the deal that left Northern Ireland in the EU’s single market for goods, creating a trade border in the Irish Sea.
Stephen Kelly, chief executive of Manufacturing NI, said while the responses showed that manufacturers were “overcoming issues”, there was also “more work required” to make the deal work for everyone.
Talks will resume this week between the UK and EU over the deal which the British government has warned places an “unsustainable” burden on businesses.
It will be the first meeting in person between Liz Truss, the UK foreign secretary, and the EU’s Brexit commissioner Maros Sefcovic since Truss took over responsibility for the talks following the resignation of Lord David Frost as the UK’s chief negotiator late last year.
Truss will host Sefcovic at her grace-and-favour residence in Chevening, Kent, with a working dinner on Thursday night.
The UK is demanding that the EU radically reshape the protocol by reducing the amount of checks required on goods travelling from Great Britain to Northern Ireland. London argues it is hurting business and destabilising the region’s politics.
Northern Ireland’s mainly Protestant unionist parties, who want to remain part of the UK, have unanimously rejected the protocol. In contrast, the nationalist Sinn Féin party, which is traditionally backed by Catholics and seeks a united Ireland, has said the protocol was “here to stay”.
Sir Jeffrey Donaldson, leader of the Democratic Unionist Party, which heads the region’s power-sharing executive, has demanded a timeline for enforcing the UK’s protocol demands.
Trade groups have said that Northern Ireland has the potential to benefit from having dual access to both the UK and EU markets.
Officials on both sides admit that significant differences remain over how to implement the deal, which has soured wider EU-UK relations since the Brexit agreements came into force in January 2021.
Simon Coveney, Irish foreign minister, hailed a “good and friendly” first meeting with Truss last week. But he told the FT bluntly in December that it was now time for concessions.
Kelly added that the survey showed his members were increasingly grasping opportunities presented by the region’s unique position straddling the EU and UK, and were picking up more business in GB and in the EU.
The number of companies reporting negative impacts on sales to Great Britain fell from one-third to one-fifth since July; while the number reporting problems with EU suppliers also fell sharply over the same period.
But Kelly noted there were “still problems” within the new trading arrangements and a “strong desire” for the two sides to make the rules simpler for the benefit of both business and the wider Northern Ireland economy.
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The European Commission claims that recent economic data showing Northern Ireland’s economy outperforming the rest of the UK proves the protocol can work. It has tabled proposals it said would cut customs red tape by half and food and animal checks by 80 per cent, but the UK disputes this.
The biggest negative impact so far has been on fresh food supplies, since these are subject to more rigorous checks than machine parts. Sefcovic has said companies should adapt by sourcing more goods from the island of Ireland.