Mr. Steve Harper:

I thank the committee for inviting me here today. I will start by giving a brief introduction. Invest Northern Ireland is the economic development agency for Northern Ireland. We are a non-departmental public body with the Department for the Economy as our sponsoring Department. We are charged with delivering the Department’s economic policy that is within our remit and the Minister’s economic priorities which are: creating good jobs; raising productivity; promoting regional balance; and reducing carbon emissions. We do this by increasing the level of entrepreneurship, by supporting the creation of jobs with high value wages and salaries, by increasing exports, by encouraging innovation in all its aspects, and by attracting inward investment.

My position is executive director for the international business group and I have responsibility for exports, inward investment and skills. Following the UK’s decision to leave the European Union in 2016, businesses faced a period of uncertainty while the UK and EU negotiated new trading arrangements and, subsequently, as they navigated the new arrangements put in place as a result of the Northern Ireland protocol and latterly the Windsor Framework. With the UK and EU both agreeing to respect the principles of the Good Friday Agreement, including the commitment to there being no hard border on the island of Ireland, Northern Ireland has found itself in a unique position with what we refer to as dual market access, which is access for goods to the EU market on the same basis as pre-EU exit, and also having unfettered access to the UK’s internal market. This is a really unique selling point which I will come to later. We do, however, acknowledge that in the post-EU exit era there are challenges for Northern Ireland businesses on top of the economic shocks brought about by Covid and the impact of rising global costs.

As we all know and understand, the movement of goods between Northern Ireland and the EU continues on the same basis as before the EU exit. However a significant proportion of EU businesses are unaware of this. Many have assumed that as part of the UK Northern Ireland is subject to the same trading arrangements as the rest of the UK, which means trading under the EU-UK Trade and Cooperation Agreement. This is not the case and Northern Ireland’s position is different from the rest of the UK. However, there may be buyers and suppliers in the EU who have chosen not to do business with Northern Ireland companies due to their perceived administrative burden of trading under the EU-UK Trade and Cooperation Agreement or under WTO terms.

There is anecdotal evidence that some EU businesses may have a limited awareness of the Northern Ireland protocol and Windsor Framework and how this relates to trade between both regions. I believe there are missed opportunities by both Northern Ireland and EU businesses as a result of this. There is also some anecdotal evidence that Northern Ireland businesses may not be fully aware of the competitive advantage they may have over GB and EU-based competitors servicing these markets. By this I mean that for Northern Ireland companies supplying goods to either GB or the EU, nothing has really changed for them in terms of how they move these goods into those respective markets. It is business as usual. Compare that to their competitors in GB and the EU who now have to trade with each other under the EU-UK Trade and Cooperation Agreement or WTO rules.

There have also been issues with the movement of goods from Great Britain to Northern Ireland since the EU exit and although much has been done to reduce the level of bureaucracy and friction on this trade route by both the EU and UK, primarily through the Windsor Framework, frictions do remain and the UK Government has recently delayed the introduction of new rules for the movement of parcels from Great Britain to Northern Ireland. Further work is required to ease the burden on business of trading in the UK’s internal market.

I will return now to our dual market access proposition. I believe this is truly unique as Northern Ireland can offer frictionless access to both GB and EU markets. From a manufacturing perspective this allows businesses based in Northern Ireland to move goods freely to GB and EU, while there are of course a small number of exceptions. Our existing manufacturing businesses can continue to enjoy the freedom of access they had pre-EU exit and without the administrative burden that comes with trading under the EU-UK Trade and Cooperation Agreement and the costs that incur to businesses based in other parts of the UK and EU. We are talking to international businesses about our unique dual market access position from a foreign direct investment, FDI, perspective and from an export and trading position. It is not a one-size fits all proposition. The relevance of dual market access varies depending on a company’s requirements, the industry and their geolocation. That is part of the challenge in educating and informing the market about Northern Ireland’s position. While dual market access is an important factor for businesses to consider, we know that it is only part of the business decision-making process. From an FDI perspective potential investors equally want to hear about our skills availability, our lower operating costs, our infrastructure details and what Government support is available. From a trade perspective, buyers are interested in quality, cost and deliverability. Dual market access is one consideration within the overall decision making.

We are still in the relatively early days of the post-EU exit era.

However, there are signs that Northern Ireland is faring better than other parts of the UK in terms of manufacturing exports to the EU. Between 2022 and 2023, Northern Ireland saw an increase in its manufacturing exports to the EU of 14%. By contrast, exports from Wales largely flatlined, those from England declined by 4% and Scottish exports were down by 11%. Growth in exports to the EU has been across almost all parts of Northern Ireland, with Derry and Strabane achieving the highest growth at nearly 33% in 2022. This reflects the importance of the regions in driving Northern Ireland’s economic growth and how they have a pivotal role in driving regional economic growth. Furthermore, companies are diversifying where they export to, with a number of non-traditional export markets in the EU seeing an uplift in products sourced from Northern Ireland. In particular, Denmark, Poland, Portugal and Bulgaria have seen impressive growth as export destinations for Northern Ireland goods and services.

In summary, our dual market access position gives Northern Ireland a unique competitive advantage that we are keen to maximise. Our Minister for the Economy, Conor Murphy, is actively supporting Invest Northern Ireland to promote this, including on a recent trade mission to Chicago and Toronto. Later this month, he will be leading a business round table in Berlin that is focused on dual market access as we continue to spread the message across Europe and educate the market about our proposition.