Daily Archives: June 3, 2022

DUBLIN Northern Irelands economy is growing faster than Britain's, according to new regional analysis.

The Office of National Statistics found that Northern Irelands gross domestic product grew 1.4 percent in the July-September quarter of 2021, compared with gains of 0.9 percent and 0.6 percent in Scotland and England, respectively. Economic activity in Wales shrank 0.3 percent over the same quarter.

Londons globally connected economy masked a wider English malaise. While the capital recorded 2.3 percent growth, only two of Englands eight other regions eked out any gains. The northeast, including Newcastle and Sunderland, fared worst, with a 1.2 percent slump.

The analysis based chiefly on the quarterly VAT returns on sales of goods and services at 1.9 million firms offered no judgment on why the economy of Northern Ireland, normally a laggard, is outpacing other parts of the U.K. this year.

Another recent U.K. economic analysis explicitly credited Northern Irelands continued access to barrier-free trade with the 27-nation EU as a key driver.

That picture is reinforced by monthly reports from Irelands Central Statistics Office, which has documented a string of record-high trade figures between Northern Ireland and the Republic of Ireland since the January 2021 launch of post-Brexit trade rules.

Those rules include a U.K.-EU trade protocol that keeps Northern Ireland within the EU single market for goods. While the regions unionist leaders oppose the protocol because it requires EU customs and sanitary controls on British goods arriving in Northern Ireland, this arrangement also allows Northern Irish firms to avoid this red tape when trading with their Irish neighbors and the wider 27-nation EU.

This article is part ofPOLITICO Pro

The one-stop-shop solution for policy professionals fusing the depth of POLITICO journalism with the power of technology

Exclusive, breaking scoops and insights

Customized policy intelligence platform

A high-level public affairs network

See the article here:

Northern Ireland economy outpacing post-Brexit Britain - POLITICO Europe

Mark Brearley is still frustrated by Brexit. More than a year from Britains formal withdrawal from the EU, on terms agreed by Boris Johnsons government, exporting the goods his company produces hasnt got any easier for the London-based manufacturer.

Describing it as the same nightmare week after week, he says: A lot more time is spent with things going wrong. The EU really feels like the hardest place in the world to ship things to sometimes.

For the past seven decades the company Brearley runs, Kaymet, has made and sold tea trolleys, trays and hotplates from its factory just off the Old Kent Road to customers including the British royal family. Its thought that Kaymets wares were used by the queen celebrating her platinum jubilee this week on her coronation world tour. The company sells goods in 40 countries across the world.

But leaving the EU has added to Brearleys costs and makes selling items abroad more difficult. Theres loads of things I couldve been doing if it wasnt for these problems. We could do things that take us forward, rather than back, he says.

Official figures show that UK exports to the EU remain significantly below pre-Brexit levels, despite some recovery from an initial plunge in January 2021 at the end of the transition period. Exports had fallen 40% on the month as traders adapted to new red tape and border delays, but came back to finish last year down 11% compared with 2018 the year used by the Office for National Statistics as the most reliable comparison, before Brexit stockpiling and the Covid pandemic influenced trade flows.

However, concern is mounting that fresh Brexit roadblocks are looming as the government threatens to tear up the Northern Ireland Protocol, which covers trade between Great Britain, Northern Ireland and Ireland. Despite Boris Johnson claiming to have got Brexit done, his government now views this central plank of his deal as broken.

Theres a sense of, Oh God, here we go again, says Brearley, who worries that Kaymet will suffer if the EU responds with fresh trade barriers.

Raoul Ruparel, who was Theresa Mays special adviser on Europe during the first round of Brexit negotiations, says companies could start dusting down their old no-deal Brexit plans if the situation worsens.

Any business will tell you its unhelpful, he says. In this case, a lot of them are just getting on with it and they just have to make the best of it. But what they dont want is constantly changing trade rules with the UK and the EU.

Despite business concerns of retaliation from Brussels, the government has insisted that pushing ahead is the right thing to do. The UKs solution to fix the problems with the protocol and protect the Belfast [Good Friday] Agreement will cut costs for businesses, remove unnecessary paperwork and protect UK and EU markets, a spokesperson said.

There could, however, be economic costs. Steffan Ball, the former chair of Philip Hammonds council of advisers when he was chancellor, and now chief UK economist at Goldman Sachs, says the most likely outcome is a compromise deal. Still, risks of significant economic impacts loom if one isnt reached, he warns.

Back in 2020, the Office for Budget Responsibility [OBR] estimated that a no-deal Brexit would reduce the level of real GDP by an additional 2% in the long run. In addition, the escalation in tensions raises the prospect of a trade war, with potential tariffs imposed on exports to the EU, he says. But this outcome is very unlikely in our view.

Even with the current deal, the OBR the Treasurys economics forecaster expects Brexit to cost the economy 4% of GDP over 15 years, double the long-term impact of the scarring from the Covid pandemic.

Trade figures suggest UK exporters are already feeling the pinch. According to the Netherlands Bureau for Economic Policy Analysis, which tracks trends in global trade, goods exports in March from advanced economies including the UK, US, Japan and euro area were 2% above the monthly average for 2018, after adjusting for inflation. In the UK, however, real exports were almost 22% down in the same month.

Some sectors have suffered a more dramatic hit than others. Exports of clothing and footwear to the EU are both down by almost 60% compared with 2018. Meat exports have plunged by almost 25%, vegetables and fruit by 40%, while car exports are down by more than a quarter.

Paul Alger, director of international affairs at the UK Fashion and Textile Association, says the outsize hit for his industry is probably because many of the items sold by UK firms do not qualify for the post-Brexit trade deal. Under its terms, goods must meet rule of origin requirements, which require a certain proportion of an item to be domestically produced to benefit from tariff-free access. However, much of the clothing sold by UK retailers is made in Asia or the US, making it ineligible.

Theyre also finding that customs are very difficult in some countries. Particularly around labelling, said Alger. A lot of companies will say we didnt realise how good a deal we had for moving goods from the UK to the EU until we actually left.

In one example of shifting trade patterns, Marks & Spencer is setting up a warehouse to handle EU deliveries of clothing and homewares to reduce the impact of tariffs and export costs. The British high street stalwart said last week that Brexit had cost it 29.6m in profits and 15m in lost trade.

Danny Hodgson runs Rivet & Hide, which sells quality mens clothing from stores in London and Manchester as well as online. He says EU sales, which he spent a decade building, plunged by half in the first month after Brexit and never recovered.

Its really frustrating, he says. Rivet & Hide has pushed up prices for EU customers to include new tariffs, VAT and shipping costs.

I hear Johnson boasting about free trade and all the rest of it. I dont know how hes got the brass neck to talk about us doing free trade when basically hes the one whos imposed sanctions on our business. We were freely trading with the EU and now weve had tariffs imposed on us through our Brexit deals.

With Britains economy facing the risk of recession amid the cost of living crisis, Hodgson says the government has caused harm to the British economy that could have easily been avoided.

Were less profitable, theres a lot more work involved, theres a lot more hassle, but Im still slogging away at it in the hope one day things improve, he says. But if there was a trade war, it would finish that off.

View original post here:

Same nightmare week after week: UK firms fed up with post-Brexit EU trade - The Guardian

Brexit has led to a decline in crops and fewer home-grown products on the shelves of Britains supermarkets, farming chiefs have warned.

Farmers in Kent told a visiting group of MPs that it has become easier to import some fruits than harvest them because of strict limits on the number of seasonal workers from the EU.

Winterwood Farms, an agricultural giant based in the county, said its UK farms had been forced to leave 8 per cent of their fruit crop unharvested and would be planting less in future.

Stephen Taylor, managing director of Winterwood in Maidstone, said the governments advice to replace lost EU labour with British workers and robots showed how out of touch ministers had become.

The flow of people coming from Europe to work for the summer has declined every year since Brexit, particularly the last two summers, and as a direct result we are now growing less and importing more, he said.

Calling for more flexible seasonal work visas, he added: The government could still allow the same people to carry out the harvest but it has inexplicably decided to choke the industry instead.

Labour MP Hilary Benn led a delegation of MPs and industry chiefs to visit Winterwoods farms in Kent to see the difficulties they are facing with labour shortages.

They were told the problem had hit the whole farming sector resulting in less fresh, more expensive imported fruit in British supermarkets to cover the shortfall.

The UK Trade and Business Commission delegation, which is examining the impact of Brexit, also heard that British farmers off-season trade had also been badly hit.

Farmers could previously sell any surplus from overseas operations to EU markets, but new Brexit red tape means they must now pay to dispose of this fruit.

Mr Benn, co-convenor of the commission, said the governments immigration and trade policies were raising questions over our food security.

The senior Labour MP added: It is essential that ministers urgently consider the introduction of more flexible visas for seasonal workers and negotiate better trading terms on fresh produce with our European neighbours.

Stephen Taylor, managing director of Winterwood Farms, wants more flexibility over seasonal workers

(PA)

Mr Benn and co-convenor Peter Norris have written to home secretary Priti Patel and environment secretary George Eustice to request urgent meetings on the problems affecting British farms.

Naomi Smith, chief executive of the internationalist campaign group Best for Britain, said Boris Johnsons ministers might have to stomachmore European berries in their Pimms this summer.

She added: The governments insufficient Brexit deal, far from being oven ready, actually means quality home-grown produce is left to rot, and leaves British supermarkets with no choice but to import, meaning consumers have less choice, less fresh produce and higher prices.

A recent report by academics at the LSE Centre for Economic Performance found that Brexit had caused a 6 per cent increase in Britainsfood prices.

The study showed a clear and robust impact of Brexit-induced trade frictions increasing food prices for UK consumers as families continued to struggle with the cost of living crisis.

View post:

Brexit means fall in crops and fewer British products in supermarkets, farmers tell MPs - The Independent

Just when the whole of democratic Europe should be pulling together to counter the threat from Vladimir Putins Russia,a major rift between the European Union and Western Europes leading military power the United Kingdom has been widening. The problem is Brexit.

The U.K. is threatening to rip up part of the withdrawal deal it struck with the bloc just over two years ago on the grounds that its working badly in Northern Ireland.Trade between the British territory and the U.K. mainland has been disrupted and the regional governance of the province has broken down.

Some fear that this has imperiled the U.S.-brokeredGood Friday Agreement, a peace deal approved in 1998 that ended decades of violent struggle over British sovereignty in Northern Ireland.

Trading with the EU has certainly become a lot more complicated after Brexit. Just ask Archie Norman, chairman of the giant British food and clothing retailer Marks & Spencer. In an interview with the BBC, Norman revealed whats involved in sending just one truckload of goods across the Irish Sea to the Republic of Ireland, an EU member state.

Wagons have to carry 700 pages of documentation, he said. It takes eight hours to prepare the documentation, some of the descriptors have to be written in Latin, has to be in a certain typeface, it takes 30% more driver time. So its highly bureaucratic, very onerous and pretty pointless.

Itll be even more pointless, he said,when the Brexit grace periodends and he faces the same hassle sending goods across the Irish Sea to the British-owned northeast corner of the island of Ireland.

Quite a lot of product simply wouldnt get to Northern Ireland, and what does go there would be very, very costly, he said.

For most nonfood products arriving in Northern Ireland from the British mainland, the Brexit grace period is already over, and a wide swathe of goods from what is called Great Britain, or GB, has already been squeezed out of the Northern Ireland market.

Weve not brought a plant in from GB this year. Its just too much hassle, said Robin Mercer, who runs the Hillmount Garden Centre in Belfast.

Instead, hes had to buy his plants from further afield from EU countries like the Netherlands and Italy, where there are different weather and soil conditions. He believes the British plants are healthier and, after traveling shorter distances, arrive in better condition than their continental counterparts. He would prefer to import British plants.

Oh totally, he said. Weve worked with firms for 20, 30 years from GB. But its just so much paperwork now, so much hassle.

More than 200 companies based in Great Britain have stopped supplying Northern Ireland because of that hassle, according to the U.K. government.

But all these difficulties, said Mattia Di Ubaldo, a fellow at the U.K. Trade Policy Observatory, are theinevitable result of Brexit.

These checks are what typically applies to any third country that tries to import things into the EU, he said. The EU has to protect the integrity of the single market. They cannot allow a border where productscould leak intothe European Union without being subject to the checks.

And, he said, those checks have to take place when the goods enter the island of Ireland. They cannot take place between Northern Ireland and the Irish Republic.

Avoiding a border in the island of Ireland was necessary to protect the peace process, he said, echoing the view of the large minority in the British province that wants a united Ireland.

That view of the border checks is shared by the government of the Irish Republic, the European Commission in Brussels and the U.S. administration, which all believe that checks between Northern Ireland and the Irish Republic would undermine the Good Friday Agreement.

The trouble is that putting the border checks between the province and the rest of the U.K. instead under an arrangement called the Protocol has enraged many so-called unionists who want Northern Ireland to remain British. They believe that the Protocol itself undermines the Good Friday Agreement.

The Protocol must go, said Sammy Wilson of the Democratic Unionist Party, which is now refusing to take part in the assembly and power-sharing administration set up in the province by the Good Friday Agreement.

The Protocol is the poison in the system at present. There is no consent for the Protocol among any of the unionist representatives, Wilson said. The Good Friday Agreement requires the consent of both communities in Northern Ireland when it comes to any controversial or any important decisions.

The U.K. government in Londonagrees and has pledged to introduce a bill enabling it to suspend unilaterally parts of the Protocol if the EU doesnt agree to radical changes. Brexit-supporting lawmakers like Peter Bone welcomed the move.

The only way youre going to get the EU to come to the negotiation table and really negotiate with you is if you threaten them with that bill, he declared in a rowdy parliamentary session.

But Opposition spokesman on foreign affairs Stephen Doughty accused the government ofbad faith, of threatening to tear up a treaty that it signed just over two years ago.

Britain should be a country that keeps its word. The rest of the world is looking at us and wondering whether were a country they want to do business with, he said.

In the United States, Nancy Pelosi, speaker of the House of Representatives, warned that Congress wouldnt agree to a free trade deal with the U.K. if the Brits ripped up the Protocol. The European Commission hinted at a trade war with the U.K. over the issue, and the U.S. State Department deplored this rift between the allies when they should be united behind Ukraine.

The EU said it is prepared to contemplate some changes in the Protocol but that it suspects the U.K. is trying to wriggle out of this key part of the withdrawal deal.

Meanwhile, the U.K. countered that the Protocol specifically acknowledged that the measure could be set aside if it proved unworkable. And both the political paralysis in the province and the trade disruption between Northern Ireland and Great Britain, said the government, show that the Protocol isnt working to the satisfaction of the unionists.

Theres a lot happening in the world. Through it all, Marketplace is here for you.

You rely on Marketplace to break down the worlds events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.

Read the original:

Why the U.K. is threatening to tear up part of its Brexit treaty with the European Union - Marketplace

The EU told Britain it cannot gain associated member status for Horizon Europe until it resolves its dispute with the bloc over the Northern Ireland Protocol. This is despite the UKs involvement being a feature of the Trade and Cooperation Agreement (TCA). It was planned that the UK would contribute 15billion over seven years so British researchers could access EU grants and collaborate with European partners.

Now, Universities UK is pleading with European Commission Vice-President Maros Sefcovic to urgently resolve the row to rescue the UKs access to the programme.

The group wrote in the letter that the delay is being "keenly felt" by both the EU and UK with the situation "deteriorating every day that the uncertainty drags on".

The letter added: "Failure to secure UK association to Horizon Europe would be a lose-lose for health, wealth and wellbeing and would do a disservice to future generations in Europe and beyond.

Universities UK also warned that the situation is "close to the precipice.

The letter requests a meeting between Mr Sefcovic and UK vice-chancellors.

But this comes as negotiations with the EU continue to sour, with Foreign Secretary Liz Truss threatening to tear up the Protocol in recent weeks.

Following a phone call between Ms Truss and her EU counterpart in May, Mr Sefcovic warned that scrapping the protocol would be unacceptable.

He said in a statement: "It continues to be of serious concern that the UK government intends to embark on the path of unilateral action."

Mr Sefocivc added: "We have made clear that there is still potential to be explored in our proposals. We are still awaiting the response from the UK side."

But the back-and-forth is continuing to spark fears for British researchers.

READ MORE:Spains 'alternative plan' to cause 'substantial damage' to Putin

I can tell you today that the window for association is closing, and closing fast.

But while much of the science community will be hoping the negotiators can strike a deal, Science Minister George Freeman has come up with a backup plan in case Britain is permanently excluded.

It looks like it will involve teaming up with science and innovation powerhouses like our Five Eyes (Australia, Canada, New Zealand, the US) partners, as well as countries like Japan.

The Science Minister has also been meeting counterparts in Switzerland, Sweden and Israel to explore striking partnerships with these powerhouses.

Read the rest here:

EU's Brexit chief warned of 'lose-lose' situation as he moves to TEAR UP 15bn TCA deal - Express