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The Irish government has been lobbying the EU and UK to allow Northern Ireland exporters to benefit from existing and future free trade agreements between the EU and other countries around the world, RTÉ News understands.
Under the Northern Ireland Protocol, any product produced in Northern Ireland can circulate freely throughout the EU.
However, these goods will not be recognized as EU goods for the purposes of being exported as part of the EU’s existing free trade agreements (FTAs) with countries such as Canada, Japan and South Korea because Northern Ireland will remain. legal part of the customs territory of the United Kingdom.
As such, as of January 1, Northern Ireland will be excluded from some 60 EU free trade agreements because Brexit will go into effect.
The anomaly also has implications for companies in southern Ireland that use components or ingredients from the north for products that are then exported around the world under EU free trade agreements.
RTÉ News understands that the government has raised the issue informally at the highest level with the European Commission and the British government.
Northern business organizations themselves have raised the issue with both governments and the European Commission since the Protocol was negotiated a year ago.
The Northern Ireland Business Brexit Task Force has been pushing for clarification on the issue and posed a number of questions to the UK government after it released a paper in late May on how it would implement the Irish Protocol of the North.
The fact that Northern Ireland officially exits 60 FTAs in January will have serious implications for some sectors, especially the newspaper.
Millions of liters of milk are currently produced in the north and processed in the south, with much of this product then being exported as milk from the EU / Ireland around the world.
“Any dairy product manufactured in Northern Ireland is exported under EU free trade agreements,” says Mike Johnstone, executive director of the Daily Council for Northern Ireland.
“We also have a third of our raw milk moved from the north to the Republic for further processing. Some of that is manufactured, goes to the EU, some goes back to Northern Ireland and the UK. But a significant proportion goes to third countries and is exports under EU free trade agreements.
“We are very exposed if we cannot continue with the trade flows that we have right now. We do not have the processing capacity in NI to handle all the milk that is produced in NI. So we have to be able to drink that raw milk south of the border to process it. If we can’t do that and we can’t add the value, the losers will be the dairy farmers on the island of Ireland. “
Stephen Kelly, Managing Director of Manufacturing NI, says: “This is important for Northern Ireland because 70% of what we make is intermediate goods, components and ingredients that are used elsewhere in the UK, but in particular many things that Irish products “.
The Protocol means that milk and other products will continue to be produced in the north according to EU standards, which means that it can be sold in the south and in 26 other member states.
However, due to WTO country of origin rules, milk is not considered EU milk. This is because Northern Ireland is still part of the customs territory of the United Kingdom.
Northern companies rely on processing in the south, and southern operators like Lakeland Dairies rely on northern milk to meet demand from customers in China and West Africa.
RTÉ News understands that the issue has been raised informally by the government at the highest level with both the European Commission and the British government.
The issue has also been raised with the EU-UK Joint Committee, which is tasked with implementing the protocol.
Although there is said to be sympathy for Northern Ireland exporters, the European Commission would have to reopen all its trade agreements with third countries to ask partners to accept Northern Ireland products as EU products.
The Commission is understood to be concerned that if it began to reopen the trade agreements to make this small change, then there could be reciprocal requests for changes from the co-signatories of the trade agreements.
“There is a good degree of sympathy for this in the Commission, but they also wonder how I would handle this. It may take some time,” says a senior source familiar with the matter.
The other problem is that Britain would have to ask the EU to do so, and so far that request has not been formally made, according to well-placed sources.
There may be sensitivities as to which field Northern Ireland is in, given the UK’s ambitions to forge new free trade agreements around the world.
However, officials say that because the UK is likely to extend many of the EU’s existing free trade agreements, there may be no major tariff differences.
It is understood that the Irish government is interested in Northern Ireland exporters receiving a fair hearing in order to continue to make use of the EU free trade agreements due to the potential burden of implementing the Protocol.
“It is considered that an unfair situation is developing in which the North has to assume all the customs procedures and many of the regulatory problems associated with the [EU] single market, but then it cannot benefit from the trade agreements that the EU has, “says the source.
The government is also aware that the Northern Ireland Assembly will vote on maintaining the Protocol four years after its entry into force.
Sources say that the more benign the opportunities are for exporters, the greater the chances that the Protocol will win popular approval.
The issue reflects the complexity and ambiguity of Britain’s exit from the European Union and the Northern Ireland Protocol.
While the UK insisted that Northern Ireland remain part of the UK customs territory, so that it could benefit from UK free trade agreements, there would still be restrictions.
For example, if the UK were to conclude a free trade agreement with the US that included hormone-fed beef and chlorinated chicken, such products would not be able to enter Northern Ireland because they would not meet EU food standards. .
The British government has insisted that it will not allow such products as part of a US free trade agreement.
Similarly, if the UK concludes a free trade agreement with a third country that includes beef exports, it is possible that cattle that were born in the south, but later “ended up” in the north, are part of that FTA. as beef cattle could be considered EU cattle and not British.
High-level figures have told RTÉ News that the issue is unlikely to be resolved before the Brexit transition period ends on January 1 because both the EU and the UK are consumed with so much by free trade negotiations. as for the implementation of the Protocol through the Joint Committee.
The government hopes that there may be a parallel agreement between the EU and the UK that makes it easier for Northern Ireland businesses to benefit from EU free trade agreements.
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