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Northern Ireland risks becoming a “legal basket case” that will deter trade and investment if Article 16 is triggered, companies have warned.
Businesses there have taken calls from European Union customers asking if they are still allowed to trade because of the threat from Lord Frost, the Brexit minister, the province’s manufacturing trade association has said.
Triggering Article 16 would unilaterally suspend part of the Northern Ireland protocol, scrapping border checks on goods arriving from Great Britain. However, business groups said that it would not improve trade but instead would create legal uncertainty.
Stephen Kelly, chief executive of Manufacturing NI, which represents 550 businesses, said that the impact on trade would be “instantaneous”. “Businesses who are not sending stuff to Northern Ireland won’t suddenly start to send goods,” he said. “The businesses who have spent time and have navigated the new rules to send stuff from Great Britain to Northern Ireland will be viewed in boardrooms as being legally challengeable, so they’ll stop sending stuff to Northern Ireland.
“The third impact will be those EU customers and suppliers who our manufacturers have been enjoying good trade with this year. They will also see huge legal jeopardy in buying or supplying to Northern Ireland and they’ll stop sending stuff or buying stuff.”
Aodhán Connolly, director of the Northern Ireland Retail Consortium, said: “Some are holding up Article 16 as this beacon of hope that removes the challenges of the protocol, but it doesn’t. Businesses ask for clarity, stability, affordability and simplicity and Article 16 does none of those things.”
The protocol, part of the Brexit withdrawal deal agreed between London and Brussels, is designed to avoid a hard border on the island of Ireland.
Seamus Leheny, policy manager at Logistics UK, said that if Article 16 was triggered, the EU could “start imposing more checks on EU ports that would impact trade with Great Britain”.
Invest Northern Ireland, the government’s regional business development agency, said that investors were continuing to move forward with projects.