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Under the Brexit Withdrawal Agreement and Future Relationship, Northern Ireland is in a very advantageous position where it has full access to the EU for goods, and can also send goods to (but not from) mainland UK without checks/tariffs.

Despite the Brexit deal resulting in trade without tariffs/quotas, a lot of small businesses in the UK have complained about the costs of submitting Rules-of-origin and Product compliance forms, which can add up to £20,000. To mitigate against this, some businesses have set up manufacturing/business distribution centers in Eastern Europe.

Instead, could the UK SMEs set up manufacturing/distribution centers in Northern Ireland, where they can have the best of both worlds: Full access to the EU, and Full access to the rest of UK ?

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  • What is to prevent it? Other than cost, I can see no barrier. So, if a profit can be made, after costs, it seems to be a reasonable investment - and may even qualify for some government business grants. Go for it ! – Mawg says reinstate Monica Jan 8 at 14:41
  • It seems to me they could but they would need to ensure their whole supply chain is EU-oriented. Same thing if you need some conformity assessment. Otherwise the rules on moving goods from Great Britain to Nothern Ireland will kick in and add paperwork/costs. – Relaxed Jan 10 at 9:08
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No. To avoid a "hard" border on the island of Ireland, Northern Ireland has effectively remained in the EU single market and EU rules and regulations apply. The rest of the UK has left the single market, and consequently, since goods imported into Northern Ireland are easily exported to the EU, they must be checked to conform to EU rules. This creates part of the "border in the Irish Sea". But that border potentially applies both ways. One of the alleged reasons for Brexit was so that UK rules and regulations could diverge from those set by the EU, so in principle on some areas the UK could have stricter requirements than the EU and therefore there would need to be checks between Northern Ireland and the rest of the UK to prevent non-conforming goods evading checks.

So, while there may be a temporary ability to set up business in Northern Ireland, it would be unwise as there is no reason to suppose this is a stable situation and there could be very costly changes required. It would probably be much safer to set up in the Republic of Ireland which guarantees free access to the whole EU, while currently providing access to Northern Ireland as well.

If the situation were to look like it was stable, then it might make sense to set up a business in Northern Ireland specialising in trans-shipping betwen the EU and UK.

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Conservative Minister Brandon Lewis, the Secretary of State for Northern Ireland seems to believe so. In remarks made on Question Time in late January 2020 he recommended companies that wish to trade in both the UK and EU set up or invest in Northern Ireland to take advantage of its unfettered access to both markets.

"That’s going to mean, if you’re a business that deals with the UK and a business that deals with the EU, the place to invest and grow your business is in Northern Ireland. You’ve got that ability to trade both ways and I think that gives Northern Ireland a competitive advantage and a huge opportunity.”

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