North East manufacturing group issues warning over EU trade war

A North East business group has warned the Government against an escalation of its trade war with the EU as tensions continue to simmer over the Northern Ireland protocol.

The Advanced Manufacturing Forum (AMF) says any move to trigger Article 16 of the Northern Ireland protocol – which has been raised by Brexit Minister Lord Frost – would have serious repercussions for manufacturers in the North East

The latest round of talks on post-Brexit trade arrangements will see the UK Government’s chief negotiator to the EU, Lord Frost, meet European Commission vice-president Maros Sefcovic.

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In October, the EU offered a series of changes to the protocol which would remove 80% of checks on goods between Northern Ireland and the UK mainland, but the UK Government wants further alterations, including removing the role of the judges in the European Court of Justice (ECJ) as the arbitrators of disputes.

There is growing speculation that the UK is poised to use a get-out clause from the deal in the coming weeks, but Irish politicians have warned the Government not to adopt a “tough guy” approach.

Richard Swart, chair of the Advanced Manufacturing Forum and a prominent anti-Brexit campaigner in the North East, said: “It is pleasing that significant progress has been made by both sides in removing simpler points of friction. Whilst the Northern Ireland Protocol stretches across a vast range of issues, the AMF is clearly focussed on the impact that a potential trade war could have on our members. It would be hugely damaging to manufacturers, who have had to deal with so much during the last 18 months, including Brexit complications, the full impact of Covid, labour, skills and commodity shortages, the difficulties around freight and shipping and massive price increases.

“The Government appears hell-bent on further confrontation with the EU, demanding the removal of the role of the European Court of Justice (ECJ) in the EU single market, of which Northern Ireland is a part, a key component of the whole Brexit deal, avoiding a hard border with the Republic of Ireland. The ECJ as in integral tool for the EU to regulate the single market and have made it clear it is a red line.

“We urge the UK Government to honour the Brexit deal it negotiated and trumpeted to all as a great win-win deal for all and to provide the manufacturing sector with the certainty that it must have to move forward and remain competitive in the world market.”

The Office for Budget Responsibility revealed last month that Brexit was likely to reduce UK GDP by around 4%, twice the impact of the pandemic.

Recent regional trade figures also show a continued reduction in international trade.

Stephen Elliott, managing and technical director (applications) of Jarrow-based HVR International, added: “The UK Government’s sabre rattling, with respect to triggering Article 16 of the Northern Ireland protocol, may well be the final straw for many small to medium sized UK manufacturers, like HVR International Ltd of Jarrow.

“Traditionally, as an export driven company HVR’s two largest markets are in Asia and the EU, which comprise 75% of our business. However, both sales and jobs have dropped significantly by 30% since 2018, culminating in a further 16 redundancies in autumn 2021.

“After the recent turmoil, export driven manufacturers desperately require a period of stability to rebuild and refocus their business efforts. We are deeply concerned that, once again, the Government’s penchant for brinkmanship will not only postpone common sense agreements, but actually, damage our prospects, terminally.

“In case we are accused of scaremongering, the joint UK, US, Australia agreement to supply Australian Navy Nuclear submarines, has just cost HVR a £50,000 contract with the original French supplier, as well as undermining general confidence in UK sourcing.”

Alan Metcalfe, commercial director of recruitment company Zenith People and vice chair of the Advanced Manufacturing Forum, said: “North East manufacturing has already been affected dramatically with the restrictions on freedom of movement from the EU and this has adversely impacted on their productivity, being unable to attract staff.

“To activate Article 16 would have such a negative impact on our AMF members and we would urge the Government to think hard about this.”

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