Since the introduction of the Northern Ireland Protocol, sales to the UK and EU countries have increased significantly. The government in London is therefore threatening the EU with breaching the agreement.
The special Brexit rules criticized by London are strengthening the economy in the British province of Northern Ireland. This is suggested by trade data and economic models. However, consumers in the former civil war region must expect higher prices than in the theoretical case that the United Kingdom would still be part of the EU.
The value of British sales to Northern Ireland rose by seven percent in 2021 – i.e. after the introduction of the so-called Northern Ireland Protocol – compared to the previous year, according to the Northern Ireland Statistics Office. Northern Ireland sales to the UK increased by 13 per cent. Exports to the neighboring EU member state of Ireland and to the other EU countries increased even more. The statistics office emphasized that the effects of inflation were not included.
London threatens to break the agreement
Unlike the UK, Northern Ireland is a de facto member of the EU Customs Union and Single Market even after Brexit. This arrangement is intended to prevent a hard border with Ireland and thus old conflicts from flaring up again. However, a customs border was created between Northern Ireland and the rest of the UK. There were trade barriers, some British companies stopped deliveries to Northern Ireland. The mostly Protestant supporters of the union fear that the protocol will promote the reunification of the part of the country with Ireland, which is what Catholics in particular are demanding. The government in London is therefore threatening the EU with breaching the agreement.
However, model calculations by the University of Sussex revealed, contrary to British and unionist politicians, that the protocol actually promotes the Northern Irish economy. According to this, production in the part of the country will increase by 2.2 percent – compared to the kingdom remaining in the EU.
Thanks to the protocol, producers would have good access to both the UK and EU markets, but also less competition from the UK because of the tariff border. At the same time, however, the customs barriers for British goods meant that consumer prices – again compared to remaining in the EU – rose by 4.3 percent. This reduces overall economic prosperity by 2.4 percent.
(APA/dpa)