Ireland urges EU to scrap Brexit deal rules – trade expert hints bloc could CAVE already

Michael Gove denies Brennan’s claims on ‘failing Northern Ireland’

The rules of origin aim to stop a UK company buying cheap products from a country outside the EU, before then repackaging and rebranding the items to sell them back into the EU without any tariffs being imposed. The post-Brexit trade deal signed between the UK and EU at the end of last year states goods that are unpacked and repacked in the UK, and not subject to further manufacturing, will be hit with customs taxes or tariffs when they are reimported back into the bloc. But just two weeks after the UK completed its full departure from the EU, the rules of origin restriction is already preventing some products moving between two EU countries where the items are repackaged in UK distribution centres before being supplied into Ireland.

Supply chains are experiencing heavy disruption, with Irish retail outlets of popular UK supermarket chains in both the Republic and Northern Ireland finding themselves with food shortages and empty shelves.

Now an Irish Government source has told The Irish Times officials have made “technical inquiries” with counterparts in the European Commission.

The source said: “This is Brexit. The UK has left the single market and the customs union. They are a third country. That is the problem.

“If a good comes through England, that doesn’t mean that it should come under these rules, but if they are repackaged, there is a problem. That is not transit.

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“This is an issue which was unforeseen or not foreseen to the extent to which it should have been.”

But Sam Lowe, a trade policy expert at The Centre for European Reform think tank, hinted the EU could already be set to cave in to demands.

He tweeted: “This is what leads to EU making accommodations, btw. Not the UK asking for something; rather an EU member-state doing so.”

Carol Lynch, a customs partner with consultants BDO, offered some hope a resolution can be found, telling the newspaper a product moving from one EU country to another via UK distribution centres should not be subjected to tariffs if it has not undergone further manufacturing “other than what was necessary to preserve it in good condition while in that third country or while being exported”.

She said in a note to clients: “As long as the goods themselves are originally exported from the EU and are subsequently returned to the EU, then they can be returned to any country or entity who can provide proof of export and who can show the goods have not been changed while abroad.”

But fears are growing Irish supermarkets heavily reliant on products from Britain could continue to see empty shelves, despite retailers and the Revenue Commissioners claiming there are very few import issues.

Large firms with a significant presence in the Republic have been surprised by the amount of paperwork that needs to be processed when importing food after Brexit.

The issues in the supply chain have also seen the Revenue Commissioners introduce an emergency code that enables importers to temporarily avoid a small amount of the documentation on rules around border controls.

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One unnamed and frustrated food importer told The Irish Times: “We work with a customs broker and thought we had everything in place to get in and out as necessary.

“But the issue that has tripped up so many businesses was the need for an ENS number.”

The ENS number is a safety and security entry summary declaration that is now required for moving goods on ‘roll-on, roll-off’ vehicles.

In preparation for Brexit, several retailers and their suppliers took the early decision to stockpile goods ahead of the end of the transition period agreed between the UK and EU.

But there are now increasing fears shortages could become more evident for Irish consumers when stockpiles begin to run out.

The source also told The Irish Times: “There will be a bumpy few weeks ahead and the UK multiples may have problems ahead if they start running out of stock.

A Marks & Spencer spokeswoman told the newspaper the retailer remains confident it will be able to maintain supplies for its customers.

She said: “Following the UK’s recent departure from the EU, we are transitioning to new processes and it is taking a little longer for some of our products to reach our stores.

The spokeswoman added Marks & Spencer is working closely with our partners and suppliers” to ensure stock levels continue to be healthy.

A Tesco spokeswoman admitted it has experienced a “slight increase” in demand in stores and online in recent days but insisted there is still “plenty of stock to go around”.

She said the supermarket chain’s “extensive preparation, stock-building and collaboration with suppliers” has ensured its supply chain remains “robust”.

The spokeswoman added: “We continue to work with Government agencies and departments on a smooth transition.

“We’ve worked extensively with our suppliers to minimise disruption, so we’d encourage our customers not to change their shopping habits at this time.”

Aldi, Lidl and Supervalu all echoed the comments from their supermarket rival, claiming they have not experienced significant supply issues following Brexit.

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