New Brexit trading rules could take more than two years to bed in fully

The new Brexit trading arrangements in Rishi Sunak’s revised Northern Ireland protocol could take more than two years to be fully implemented, government sources have confirmed.

Businesses in Northern Ireland say they expect a mass educational campaign to be launched across the country by HMRC and other government departments to help them put the deal announced in Windsor last Monday into operation if it is approved by parliament.

But with legislation required to bring the Windsor framework into force, the first of the new measures could take months to become operational.

A government source said if the new deal was ratified it would be “intentionally giving industry time to prepare. Essentially, it is a phased introduction over this year and in 2024.”

However, the introduction of updated labelling for products travelling across the Irish Sea via the new customs “green lane” will be staggered, with the last stage being implemented as late as July 2025.

Businesses are still trying to work out what the deal means for them. “It is important to emphasise this is a framework but there’s a lot of operational detail to work through,” said Stuart Anderson, the head of public affairs at the Northern Ireland chamber of commerce.

“There is also a quite significant political, practical and legal work to get through as part of the process. For example, the timeline for labelling is until July 2025 underlining that this is very much a process over time.”

Labelling products as “not for the EU” will be one of the most visible changes to result from Brexit in Northern Ireland and the rest of the UK.

Under the new arrangements producers of fresh meats, such as sausages, and dairy products will have to start labelling goods for sale in Northern Ireland from this October. The government has promised swift reimbursement to cover the cost.

From October next year, labelling requirements will be extended to include all other dairy products, such as UHT milk and butter, across the UK. The final phase of labelling will enter into force in July 2025 and apply to fish, fruit and vegetables and composite products such as ready meals.

Both the Northern Ireland chamber of commerce and Manufacturing NI say they are confident that businesses will be able to work with government to bring the new rules into operation.

“As businesses we had to shout from the sidelines in the past, sometimes we had to kick down the doors to get heard but now we know we are going to be invited into the room,” said Stephen Kelly, the chief executive of Manufacturing NI, one of a group of business representatives who met Sunak last week.

The process to bring the deal into operation will start later this month after a meeting of the UK-EU joint committee, a body established to enforce the original withdrawal agreement.

Legislation may be needed for some elements of the deal such as the application of UK VAT rules and alcohol duties in Northern Ireland, but sources say that could happen swiftly.

Kelly said some of the “low-hanging fruit” such as the tariff reimbursement schemes could be up and running by early summer.

This is a repayment scheme for any businesses that are not certain of the end destination of their product but who bring materials in through the red lane and pay an EU tariff on a component. If that product ends up being sold and remaining in Northern Ireland they can claim back the tariff.

“We expect HMRC will have to implement changes to some systems and a campaign to educate traders, but there are relatively simple things they could get started with in the early summer.”

Farmers will also be looking for a swift enactment of the Windsor clauses that reverse bans on the importation from Great Britain of seed potatoes and 11 native British trees, along with a relaxation of rules regarding secondhand farm machinery.

Months after the protocol came in in 2021, the Woodland Trust was forced to cancel the purchase of 22,000 trees for communities and schools in Northern Ireland because of the restrictions.

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New Brexit trading rules could take more than two years to bed in fully