LONDON — Keir Starmer hailed a “landmark deal” with the European Union back in May which he promised would slash red tape.
One month on, however, and Starmer’s promises still seem like a distant dream in Northern Ireland, as businesses brace for yet more Brexit paperwork.
From July 1, a whole raft of new food products sold in Northern Ireland will have to carry “Not for EU” labels as part of the third and final phase of a controversial labeling rollout.
The rules — set out in the Windsor Framework deal between the U.K. and EU — are supposed to ensure that goods are not moved onward from Northern Ireland to the Republic of Ireland, an EU member country.
But in light of the U.K. prime minister’s fresh EU deal, businesses are questioning why the new labels should be introduced at all.
Under the terms of the deal agreed by Starmer, Britain is preparing to sign up to European single-market regulation on animal and plant health, known as sanitary and phytosanitary (SPS) rules, removing the need for the labeling.
“We are being required to implement a very cumbersome and onerous regulation from July 1 until the date that the [SPS] deal is put into law, which may only be a matter of months,” said Roger Pollen, head of the Federation of Small Businesses in Northern Ireland.
“There will almost certainly be manufacturers who will say: ‘No, we’re not doing that’, and stop supplying the market, leading to gaps on shelves and broken supply chains, simply because the EU are sticking on a point of principle despite the imminent SPS deal.”
‘Frankly farcical’
The labels are deeply controversial for businesses, who claim they are not only off-putting to consumers but costly for manufacturers and “cataclysmic” for food exports.
The latest rollout will cover some fruit and vegetables, fish, and composite products such as pizzas and quiches. Meat and dairy products sold in Northern Ireland already carry the labels.
The requirement was originally supposed to apply U.K.-wide, but that plan was scrapped last year following a huge backlash from businesses — with the caveat that they could be reimposed if supplies to Northern Ireland are detrimentally affected.
A senior retail figure, granted anonymity to speak freely, said industry was “furious at the government’s failure to stand up to the EU and demand that retailers be treated as trusted traders. If the U.K. and EU have agreed to align on SPS standards, then it is frankly farcical to proceed with phase-three labeling.”
A spokesperson for the Cabinet Office, tasked with the implementation of the Windsor Framework, acknowledged that the need for the labels would likely be “diminished” as a result of any SPS agreement.
“In the meantime,” they said, “it is important to implement the existing arrangements for the Windsor Framework and we will continue to work closely with businesses across the United Kingdom to support them in implementing these arrangements.”
That message was hammered home at a recent meeting of the Specialised Committee on the Implementation of the Windsor Framework — co-chaired by the U.K. government and the European Commission — where both sides reiterated their commitment to the “full, timely and faithful implementation of the Windsor Framework,” including the “correct implementation of the labelling safeguards.”
A Commission spokesperson said suspending the implementation of the Windsor Framework until an SPS agreement is reached “creates risks for the integrity of the EU internal market, which the EU does not accept. It is important to recall that the EU and the U.K. currently have different SPS rules.
“Honouring existing agreements is a question of good faith, this is why the EU and the U.K. both committed to the full, timely and faithful implementation of existing international agreements between them,” they added.
‘EU has shown no compromise’
But the lack of flexibility has left industry disappointed — and in some cases blaming the EU.
“The EU has shown no compromise and insisted on ‘full and faithful’ implementation of the rules despite agreeing to probably remove them in the near future,” the retail figure said. “The government’s failure to resist this unreasonable behavior is extremely disappointing and U.K. consumers will end up bearing the costs [with] increased prices.”
Pollen agreed. “The only people who can actually step in and be magnanimous about this are the EU and they’ve resolutely refused to do that so far.
“I think they should just be pragmatic and say: Look, we’ve reached this overarching agreement on SPS with the U.K. On that basis we are not going to require businesses supplying Northern Ireland to have to go ahead with phase-three labeling for a grace period of a year to 18 months.
“Then, if the deal is ‘papered up’ in law by that stage, this bureaucratic labeling won’t be required at all.”
But a figure close to discussions about the future of the scheme — granted anonymity to speak freely — called for realistic expectations of when an SPS deal was likely to happen.
“First of all, the U.K. needs to align itself to EU standards, where it has diverged,” they said. For example, the U.K. has authorized emergency use of certain pesticides that are banned in the EU.
“Then, on the EU side, the Commission will not have their mandate to get into technical discussions from the European Council until at least mid-Autumn and the European Parliament will want some sort of input into the technical process.
“Either way, those things aren’t going to happen overnight, and while relationships from the political agreement are still buoyant, the technical discussion will be much more intense and fervent.”
‘Through-the-looking-glass policy’
Despite industry’s concerns, retailers are generally “well prepared — especially when it comes to own-brand products,” the same senior retail figure quoted earlier said. But they added that there are still a “considerable number of suppliers, including sizable brands who are not ready, and who don’t want to play ball.”
While some suppliers may decide to drop out of the Northern Ireland market altogether, others are getting round the issue by bringing unlabeled goods through the “red lane,” a customs channel for goods entering Northern Ireland from Great Britain that are intended to move into the EU, where they face full EU customs checks.
The absurdity isn’t lost on Pollen.
“They [businesses] are prepared to go through that added bureaucracy just to ease a different type of bureaucracy. It’s through-the-looking-glass policy.”
With the U.K. and EU unlikely to budge on labeling any time soon, Rod Addy, director general of the Provision Trade Federation, which represents food processing, manufacturing and trading companies, is pinning his hopes on a swift SPS deal.
“Our view would be that the government and industry need to quickly identify the most important sticking points and come up with quick fixes so the deal can be pushed through relatively quickly and business and government can enjoy the benefits in months, not years,” he said.
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