M&S warns EU proposals on trade risk increasing red tape

One of the UK’s leading food retailers has warned the British government that EU proposals to try to solve the dispute over Northern Ireland’s post-Brexit trade rules threatened to increase rather than ease the administrative burden on goods imported into the region.

Archie Norman, chair of Marks and Spencer, said in a letter to UK Brexit minister Lord David Frost, seen by the Financial Times, that the offer from Brussels “could result in worsening friction and cost and a high level of ambiguity and scope for dispute”.

Frost is leading talks with EU Brexit commissioner Maros Sefcovic to try to resolve the stand-off. The UK is seeking to rewrite the agreement’s protocol for Northern Ireland, which left the region in the EU’s single market for goods in order to prevent the return of a north-south trade border on the island of Ireland.

If there is no resolution, the UK has threatened to trigger Article 16, the safeguard clause either side can use if they believe the Brexit agreement has caused “serious economic, societal or environmental difficulties” or the “diversion of trade”.

In proposals tabled in October the European Commission offered lighter checks on goods going from Great Britain to Northern Ireland, but only if they were clearly labelled for consumption only in the region.

Norman said the labelling requirement would add £9m in extra costs annually for the 90m products M&S ships to Northern Ireland from the mainland. The letter also warned that under the EU proposals, a vet would still have to certify 95 per cent of the food it sends across the Irish Sea to prove it complied, adding “a minimum of four hours per day” to transit times.

Along with other checks, that would result in fresh goods taking 45 hours longer to get to stores than when the UK was an EU member, Norman said. He added that as a result M&S might have to stop sending some product lines to Northern Ireland.

“Detailed examination suggests to us that the proposals could end up being more costly to implement than full EU customs controls,” Norman said. Instead he called for a “risk-based regime” with limited checks on goods that would make extensive use of digital technology.

The comments from Norman, who was a Conservative MP from 1997 to 2005, come as UK and EU officials continue talks aimed at avoiding the UK triggering Article 16.

Speaking during a visit to the region on Wednesday, Frost said that Article 16, which would suspend many checks on goods, was still very much on the table and urged the EU not to retaliate if it were triggered.

“If we use Article 16, it’s about making trade flow more freely within the United Kingdom and I don’t see how it would help for the response to that from the European Union to be sanctions, retaliation, making trade more difficult. I don’t understand why that would help the situation,” Frost told BBC Radio Ulster.

M&S, along with two other UK-based food retailers — Tesco and Iceland — has stores in both the Republic of Ireland and the north. They are supplied largely from the British mainland but M&S handles proportionately more of the bureaucratic workload than their two rivals because it sells overwhelmingly own-label products.

UK-based retailers are currently supplying stores in Northern Ireland under a set of temporary “easements” unilaterally extended by the UK government to reduce border friction, and reluctantly agreed to by Brussels. Norman wants these extended until the middle of next year.

Frost has been courting business support for his tough line. But while many in Northern Ireland agree that the Sefcovic proposals require significant improvement, there is far less agreement on the merits of triggering Article 16.

“It’s very clear that Article 16 does not give the stability and certainty that Northern Ireland needs,” said Aodhán Connolly, head of the Northern Ireland Retail Consortium. “Where there’s talk, there’s hope.”

Glyn Roberts, chief executive of Retail NI, which groups 1,800 independent retailers and wholesalers in Northern Ireland, said there was a danger that invoking the article “would poison the well”.

Frost, when asked if he shared Irish foreign minister Simon Coveney’s optimism that the protocol row could be resolved by Christmas, said: “I think it can be done. Whether it will be done is a different question.”

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