The creation of a dual regulatory system in Northern Ireland would create reputational, legal and commercial risks for local businesses, the UK government has been warned.
The proposal is part of United Kingdom’s unilateral plan to replace the Northern Ireland protocol — the trading arrangements that govern Irish Sea trade post-Brexit.
The Northern Ireland Business Brexit Working Group has expressed concerns about the introduction of a system that would allow businesses selling in Northern Ireland to choose whether they comply with EU standards, UK standards or both.
The group urged the UK government against the plan, insisting ministers in London should instead refocus on finding compromise with the EU to resolve issues with the protocol.
The United Kingdom and EU agreed to the protocol in 2019 as a way to avoid a hard border on the island of Ireland following Brexit. The arrangements have instead shifted customs and regulatory checks to trade moving from Britain to Northern Ireland across the Irish Sea.
The protocol is opposed by many unionists in Northern Ireland, and the DUP is currently blocking the formation of a powersharing administration at Stormont in protest.
Acting without the agreement of the EU, the UK government is advancing controversial domestic legislation at Westminster that would empower ministers to scrap the protocol.
The Government wants to replace it with a new system that would create green and red channels that would differentiate between British goods destined for use in Northern Ireland and shipments bound for onward transportation across the Irish Border.
Goods arriving through the green channel would be freed of red tape, while the red channel would retain the checks and inspections required by the protocol.
The plan also envisages the introduction of the dual regulatory system.
The business working group said the cost-of-living crisis intensified the need to find an agreed solution with the EU.
“With inflation rising to a 40-year high, the Northern Ireland Business Brexit Working Group call on the EU and the UK to redouble their efforts to resolve their differences on the Ireland/Northern Ireland Protocol and find an agreement based on compromise,” the group said in a statement.
“For too long this issue has been dominated by inflexibility and intransigence but Northern Ireland is now facing into the most difficult of winters. It is our view that the scale of the current economic challenge is such that it demands a swift resolution to the impasse.
“We have also been clear with the UK government that if it proceeds unilaterally with the Northern Ireland Protocol Bill, particularly with the creation of an all-encompassing dual regulatory regime, it will create myriad reputational, legal and commercial risks for many of our businesses,” the group said.
“It remains our firm belief that through agreement, with ambition, flexibility and compromise from both sides, a balance between upholding much-needed access to the GB market and protecting the EU single market is achievable. The EU and the UK, acting together, have a responsibility to deliver this.”
Among the members of the working group are the Dairy Council, Manufacturing NI, NI Meat Exporters Association, and Northern Ireland Chamber of Commerce and Industry. — PA