Businesses fearful of the collapsing of NI Protocol and possible trade war with EU

Business leaders have said they are fearful over the potential triggering of Article 16, the collapse of the EU-UK Brexit agreement and a possible trade war.

UP leader Sir Jeffrey Donaldson has said he wants the UK Government to trigger Article 16 and scrap the Northern Ireland Protocol, which has kept the region in the EU single market for goods in order to avoid a hard border on the island of Ireland.

But he has appeared to play down the prospect a trade war between the UK and the bloc, accusing Dublin and Brussels of “megaphone diplomacy”.

Lord Frost, the UK’s chief Brexit negotiator, is due to meet First and Deputy First Ministers Paul Givan and Michelle O’Neill on Tuesday, via video call.

Business people overwhelmingly support the protocol, arguing the alternative is a hard border, said business consultant Mark O’Connel, of trade advisory firm OCO Global.

“I do not know what the objective is. It may be a negotiating tactic,” Mr O’Connell said of the reports that the UK is prepared to trigger Article 16 before the end of this month.

But he said little would change immediately if it is triggered as there will be a process both sides will have to go through.


DUP leader Jeffrey Donaldson


DUP leader Jeffrey Donaldson

“Business people in Northern Ireland and the Republic are fearful of the rhetoric. “They know the protocol is not perfect, but the alternative is a return to a hard border and cannot happen,” Mr O’Connell said.

Mr O’Connell also argued businesses here have seen the benefits of increased trade and investment between north and south.

He described a meeting he had with business people from both sides of the border, with the consensus view being that the protocol provides a unique opportunity, that the region is the envy of Europe, but it is being undermined by politics.

“From a business point if view, and particularly manufacturing, there is overwhelming support for the protocol,” said Mr O’Connell.

The consultant added that the EU did respond to concerns on checks and came back with constructive proposals that eliminates 85% of them.

Paul Henry, president of the all-island Chartered Accountants Ireland, said Article 16 was designed as a last resort clause.

“It is not a solution to the difficulties of a post-Brexit adjustment environment. If it is triggered, it will cause significant upheaval for businesses that are already trying desperately to keep goods moving, particularly in the run up to Christmas,” Mr Henry said.

“We are disappointed that the business voice seems to have been yet again forgotten. Some pragmatic solutions to reduce the current friction in goods moving from Great Britain to Northern Ireland are on the table, and these solutions should be worked through without the threat of triggering Article 16 looming.

“We know from engaging with businesses and government agencies alike that they are making progress in adjusting to the new trading rules brought about by the UK’s departure from the EU. We don’t see any commercial advantages in triggering Article 16.”

Sir Jeffrey also criticised comments made by an anonymous EU official who reportedly told the Daily Telegraph: “We are ready for peace but prepared for war,” a slogan associated with paramilitaries.

He said comments from the Irish Government and the EU around the prospect of retaliatory action if the UK suspends the protocol was causing “harm and damage”, and increasing tensions.