Apple could make its smartphones in the UK compliant with EU rules, to simplify processes, or it could supply Northern Ireland with phones entirely from the EU to avoid any customs checks on the Irish Sea border.
The protocol, which prevents a hard Irish border, means British goods are subject to checks to ensure they meet EU standards.
“Businesses in Great Britain may avoid supplying the Northern Irish market if the particular version of the mobile devices they sell are not manufactured with the USB-C receptacle that the European Commission wants to make mandatory,” the European Scrutiny Committee report said.
“A reconfiguration of supply chains of such devices for the Northern Irish market could result, if it is easier to source compliant products from the EU rather than the rest of the UK.”
Trade diversion is cited by the Government as a reason for why the protocol needs to be overhauled and as a justification for threats to override parts of the treaty by triggering Article 16 of the agreement. Protocol talks will now continue next year.
Apple has not yet made any decisions on how to handle the regulatory divergence. Apple opposes the bill and is pushing for a longer transition period to the new rules than the 24 months foreseen in the legislation. .
“We remain concerned that strict regulation mandating just one type of connector stifles innovation rather than encouraging it, which in turn will harm consumers in Europe and around the world,” a spokesman said.
MEPs have called for the scope of the new bill to be widened to include wireless chargers, laptops and smartwatches, which the European Commission opposes on technical grounds.
The bill can be amended by both the EU governments and the European Parliament but an identical text must be agreed by the two before it can become law.
The commission hopes that could happen in 2022. Member states then usually have a two year transition period for member states to transpose the rules into national law and, if the bill is unchanged, manufacturers will have 24 months to change.
About 420 million smartphones and portable electronic devices were sold in the EU last year.
