Comment

Three scenarios for the Northern Ireland Protocol

Sam Lowe / Feb 2022

Photo: European Union, 2022

 

At the time of writing the DUP’s Edwin Poots, Northern Ireland’s minister of agriculture, environment and rural affairs, has ordered officials to cease checking goods entering Northern Ireland from Great Britain.

These checks are mandated by the EU-UK withdrawal agreement and are a direct result of the UK government deciding to leave Northern Ireland de facto encased within the EU’s customs territory and single market for goods, so as to accommodate both Westminster’s desire for regulatory divergence (for Great Britain), and avoid a new trade border between Northern Ireland and Ireland.

Poot’s orders – if carried out – would place the UK in breach of its international obligations and put further pressure on the ongoing EU-UK attempts improve the protocol, and reduce the burden it places on movements of goods to Northern Ireland from the rest of the UK.

In the short run, it is difficult to predict how the EU will react. Companies are being advised to continue complying with the rules as before, while officials seek further legal advice. The UK government is also in a bind: any move to force officials to carry out the checks would play badly both with unionists in Northern Ireland, and with hard-line Brexit supporters within the Conservative party.

At the same time, Northern Ireland’s first minister, Paul Givan, is reportedly threatening to resign which would trigger a period of enhanced political turmoil in Northern Ireland in the run up to the Stormont elections in May. The UK will argue that the turmoil is further evidence of the disruptive impact of the Northern Ireland protocol on unionist communities; the EU will point out that any consequences are ultimately due to the UK’s own political choices. Neither will be happy that this has kicked off now – given their shared interest and focus on events in Ukraine.

Most probably, the EU will give the UK a deadline to uphold its treaty obligations before instigating arbitration procedures – in practice kicking the can until after the elections. But swifter escalation in the form of unilateral trade sanctions cannot be ruled out entirely.

Even if this specific issue is resolved quickly, it is just a symptom of the wider problem facing those people and businesses hoping for a stable post-Brexit settlement for Northern Ireland.

But is a stable settlement even possible? The future is unknowable, but it is worth considering three scenarios:

The first would see the EU and UK reach a negotiated solution. This would build on existing EU proposals to reduce the customs and regulatory burden on goods entering Northern Ireland from Great Britain, and its unilateral regulatory measures to ensure medicines authorised and released in Great Britain can be administered in Northern Ireland.

In respect of customs compliance, rather than assuming all goods entering Northern Ireland are at risk of onward movement into the EU unless proven otherwise, the burden of proof could be reversed through the creation of an agreed list of products which would remain subject to more stringent process, controls and interventions. While there would still be notification requirements for off-list products, and the need for random spot-audits and occasional checks to keep the system honest, the customs-compliance burden could then be drastically reduced for the vast majority traders.

For regulatory checks on food, the EU has already indicated its willingness to entertain the idea of trusted trader schemes incorporating simplified certification and a reduction of physical checks for food products that will be sold directly to Northern Ireland consumers. The question is how far this can be extended. It also remains possible – although very unlikely – that the UK reopens discussions on a Swiss-style veterinary agreement, which would completely remove the need for certification and checks on food products moving both from Great Britain to Northern Ireland, but also Great Britain to the EU.

In this scenario, more ethereal issues would be fudged. For example, folding the European Court of Justice’s direct effect in Northern Ireland could be revoked by rolling the ECJ back into the general withdrawal agreement dispute settlement structures, with the ECJ’s opinion only being sought in the event a dispute between the EU and UK centres on the interpretation of EU law.

While a solution along the lines the above would resolve many, if not all, of the issues facing businesses moving goods between Great Britain and Northern Ireland, and drastically soften the trade border within the UK, it is unlikely to ever be enough to satisfy the DUP.

Scenario two is a complete failure to reach agreement on the Northern Ireland protocol and a total breakdown in relations between the EU and UK. This could involve the UK using Article 16 to justify reneging on its protocol commitments, trade sanctions being imposed by the EU in response, and years of tit-for-tat, consuming political attention and capital that could have otherwise been spent elsewhere.

Under such a scenario EU-UK trade and political relations deteriorate further, and Northern Ireland fails to reap the benefits of having a foot in both the EU and UK markets because no one in their right might would commit to long-term investment given the uncertainty. Nobody wins.

Scenario three is a continuation of the status quo. A permanent solution is never found, the UK continues to engage in low-level non-compliance, negotiations begin, stall, and begin again. Threats are made, threats are withdrawn. UK Brexit ministers come, and UK Brexit minister go. Nothing is ever resolved, but it doesn’t get much worse either. Eventually the ongoing uncertainty just becomes another part of the messy compromise that is Northern Ireland politics. It’s not ideal, but it could also be a lot worse.

All of the scenarios have one thing in common: they won’t please everyone. But if scenario one isn’t possible, three is starting to look all the more tempting.

Sam Lowe

Sam Lowe

February 2022

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