Brexit discussion thread XIV (Please read OP before posting)

Education, taxes, subsidies and direct state supports are just some of the things Ireland has that NI comes nowhere close to matching and wont come close to competing with us on any time soon. Also dont forget the elephant in the room that even though things are currently quiet there are still terrorist gangs who are recently again making threats of violence due to the constantly in flux political situation that large multinationals will definitely steer clear of the area due to.

Devil is in the details surely. The hoops that have to be jumped through for uncertainty to occur is unlikely to happen. First Stormont has to be up and running, which is good for business certainty. But then if the DUP starts a petition of concern it has to be proven to have a serious impact. Then it goes to the UK Government who has to agree with the DUP. Seeing as Sunak just signed this deal to make things go smoother they are unlikely to jump at the first chance to add uncertainty in to the process again. Then if the UK Government agrees then it goes to the Joint Committee to see if they can resolve it. We know the EU are not antagonistic to the UK so will be looking to avoid the same uncertainty and will be open to a compromise if there is a genuine concern.

I know we have been looking at it from a UK to EU trade perspective, but the chance for EU traders to bypass tariffs and checks via NI also exists. The only reason why this is not something being done is because the UK is not checking much going through Dover from the EU, but once they get their house in order and do the checks they need to then the attractive proposition of EU traders sending something to Ireland and then NI to the UK will be more attractive, right? This is one thing the DUP seems intent on, avoiding checks between NI and the UK but this goes both ways. So I see the potential for smuggling to happen the other way to be just as big but not a problem for the EU. It will be the UK that will not levy tariffs rather than the potential for goods coming into the EU from the UK via NI.

But this is all moot really. At the moment you have Sunak who, while he may be a Brexit backer from the start, seems to understands that it is not a one-way street like others. Once in power the deal he got was reasonable and something that May would have gotten as well. But he is more likely to be replaced by a Labour government who will not be putting up more barriers. So we are talking about something that is unlikely to happen.

Outside a full trade war:

EU produced goods are tariff free into the UK per the TCA. VAT, excise duty, and tariffs because of Rule of Origin are the main/only reasons for smuggling into the UK outside otherwise directly criminal activities (e.g. trading narcotics). I believe the EU and the UK do and will continue to police the drug trade.

Very little monetary incentive to smuggle goods EU-GB (UK) because of SM rules.

Rule of Origin for "Made in the EU" products is a much smaller problem for the 450 million EU than for GB products due to fewer components are and can be manufactured within the only 68 million UK.

Commercially sold and transported goods EU-GB will need to be invoiced by the seller and VAT/excise taxes paid by the buying company. The EU has given large concessions VAT in NI. No reason the EU should not be helpful in registration of goods going EU-UK.

Lars 😀

Turnout may have been lower than the rest of the UK but it was still 62.7%. The 2022 Stormont election had a 63.6% turnout. Do you think that means a huge number did not give a toss either? How about the Irish election in 2020, which had a 62.9% turnout. Seems to me that those that are electorally engaged voted in the election.

As for the dose of reality, I would think bombs going off in Dublin is not the dose of reality that you mean. I think both paramilitary units for either side has been itching to get stuck in. I have no doubt Ireland would now be a viable target for Unionists just like the UK was for the Republicans during the troubles. I for one would like to avoid even the prospect of that. I would say anyone thinking that a border on this island would be slightly positive needs to have a lie down and maybe put the internet away. That is not sound thinking even if you are just jokingly saying it.

Labour and Remainers must be the most powerful opposition ever, to stop a party enacting their policies when they have a 80 seat majority. Too bad they cannot use that power to actually, you know, get into power. The refusal to accept responsibility or that Brexit is the problem is still fascinating to see.

Nobody's going to relocate, but NI's situation could make it competitive in attracting investment for new projects. But I think the major benefit for NI will be for domestic businesses, esp. small to medium ones. They avoid the hit to export sales that small to medium GB businesses have suffered, and there should be some opportunity for growth, picking up sales that GB businesses can no longer make.

Only EU-based companies with a British-based major competitor and for whom Britain is a big market might consider locating in NI to export into Britain. For everyone else, they can just pass the extra costs on to the British customer. The cost of establishing in NI, then transporting goods to core EU markets is not going to be attractive v relatively small benefits which can be taken away.

For companies already based in Britain, they may look to relocate to NI but there is no way the British government could support them in doing so. It would be political suicide. The government will more likely have to at least be seen to be taking steps to prevent it.

A lot of UK businesses have already shifted investment from Sunderland, Manchester etc to Continental Europe in the past 2-3 years, with the Netherlands a particularly favoured destination amongst others, wherein most parts of the UK started to lose out ages ago.

It’s not been widely reported in the UK MSM (no surprises), but there is a non-trivial volume of 5-10 lines ad hoc reports in industry sector-specific weeklies or monthlies, and the volume of anecdotal evidence in interview quotes, website news and social media posts (LinkedIn esp.) is equally non-trivial.

European (-27) businesses have also been investing in the reverse direction, for just as long. Particularly in the B2B services sector. But, and of course, that has been investment aimed at maintaining service (or starting service, for newcomers) within a national economy of 65m, not aimed at servicing a market of 450m, with the asymmetry to match in terms of ‘benefits’ for the UK.

Far from getting their national market to themselves, UK firms in my field (IP services) have seen all the EU heavies (French, German, Dutch, Spanish (…)) opening national branches in the UK, with EU-inspired pricing schedules that are tearing the proverbial out of ‘legacy’ levels of profitability in the British domestic market.

NI may well attract some investment chasing dual/straddling GB/SM trading opportunities (and I certainly wish the very best of luck to NI with it all)…but that is likely to be by late adapters and late comers. And so, knowing (edit: these sorts of-) Brit businesses as I know them, on a shoestring and under that ‘boiler plating’ approach mentioned by Quin_Dub.

There are no tariffs for EU produced products exported to the UK. Only a fair amount of NTBs including customs forms.

There are no tariffs for UK produced products exported to the EU. Only a fair amount of NTBs including customs forms.

Exception: direct re-export (EU-UK-EU) and where Rule of Origin (from EU+UK) can't be certified.

Lars 😀

David McWilliams had a good article at the weekend about how the NI economy is in not great shape and how the Republic's economy is nine times bigger. At the moment, it would not be a good place to invest - it might have access to GB and the EU Single Market, but it's really just a neglected UK backwater.

If you didn't have a base in the EU or UK and were looking for a manufacturing base to serve those markets NI would tick the boxes for high value logistics friendly products and with the NI economy not in great shape the timing would be ideal, lots of local labour and grants available etc.

I thought H & W was still operating ( specialising in repairs etc) albeit at fraction of what it once was.