British Proposals for Renegotiating the Northern Ireland Protocol

Author Heenah Licence CC BY-SA 4.0 Source Wikimedia Commons

 

Jane Lambert

The pickle in which HM government finds itself over the Northern Ireland Protocol to the agreement between the EU and the UK for the UK's withdrawal from the European Union was hardly unexpected. If there is to be regulatory divergence between the UK and the EU there have to be customs inspections and formalities somewhere.  If the re-establishment of customs posts on the border between the Republic of Ireland and Northern Ireland is unacceptable to this country's European and American allies, then inspections and formalities have to take place between Great Britain and both parts of the island of Ireland.

Immediately after the end of the implementation or transition period provided by art 126 of the withdrawal agreement, there was disruption in the supply of goods from Britain to Northern Ireland.  These led to street protests and calls for the denunciation of the Protocol if not the whole of the withdrawal agreement.  But there are signs that Northern Ireland retailers are sourcing more and more products from within Northern Ireland, the Republic or the rest of the EU.  That is, of course, weakening economic ties with Great Britain and strengthening ties with the Republic. Ultimately that could lead to the cession of Northern Ireland to the Irish Republic. While Irish unification would be welcomed by some in Great Britain it would be regarded as a calamity not only by Northern Ireland Unionists but also by many members of the British Conservative and Unionist Party.   

Mrs Theresa May was offered an arrangement similar to the Northern Irish Protocol but she rejected it on the ground that it was something that no British Prime Minister could accept.  That raises the question of why her immediate successor did just that.  Para 13 of the UK Government position paper Northern Ireland Protocol: the way forward (CP 502) published on 21 July 2021 offers the following explanation:

"However Parliament’s insistence in the BennBurt Act that the UK could not leave the EU without an agreement radically undermined the Government’s negotiating hand; and the final compromise, while delivering the fundamental aim of a clear Brexit, and recognisably based on the UK’s proposal, included several elements which would prove to cause difficulties subsequently: notably, though not only, the EU’s insistence on customs arrangements between Great Britain and Northern Ireland, with detail to be worked out subsequently; and the failure to provide for Northern Ireland’s consent to enter the arrangements."

That does not make a lot of sense.  Had the government's negotiating hand not been "undermined" the government would have been free to take the United Kingdom out of the EU without any agreement on anything including the border between the Irish Republic and Northern Ireland.  That would inevitably have led to border controls and probably security forces to protect them.

The doleful consequences of the Protocol are summarized in para 20 of the position paper:

"Supply chains have been disrupted and costs increased, with staff redeployed to deal with new bureaucracy, impacting investment and growth. Consumers have seen real impacts: at least 200 companies in Great Britain have stopped servicing the Northern Ireland market; plants and trees long-sourced from Great Britain can no longer be stocked in nurseries or garden centres in Northern Ireland; supermarkets have reduced their product lines due to the delays and barriers in moving goods; and the costs of deliveries for those who do serve the market have continued to increase. The effects are felt more broadly too. Medicines are at risk of discontinuation because the hurdles to clear to reach the small Northern Ireland market make supply unviable. And pet owners, including those reliant on assistance dogs, have faced the prospect of unnecessary vaccinations and treatments, and bureaucratic certification hurdles simply to travel within the United Kingdom."

If this is true, the Northern Irish Protocol is clearly not working for the benefit of British suppliers to Northern Ireland but that does not mean that consumers in that province are going hungry.  There are signs that supplies from Great Britain are being replaced by supplies from Ireland and other EU member states (see InterTradeIreland Cross-Border Trade & Supply Chain Linkages Report).

In the position paper, the government is threatening to invoke art 16 of the Protocol.   It is hard to see how that will help.  The first paragraph of the article provides:

"If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Protocol."

It would appear that "safeguard measures" taken under this article are to be proportionate, short-term and to be taken only in an emergency.  If such measures lead to an imbalance between the rights and obligations under this Protocol, the other party may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance in accordance with art 16 (2).  Extensive consultations are required before a party may resort to art 16.

The revision to the Protocol that the British government appears to want is inspection-free entry of goods that are intended for consumption in Northern Ireland and full controls for goods intended for the Republic and beyond.   How this would work is not clear because most exporters to the Republic would be expected to choose the M4 to Fishguard or the A55 to Hollyhead rather than the long drive to Cairnryan. The only advantage of the latter would be the opportunity to smuggle. 

The other concession that the government seeks is to remove the resolution of disputes from the jurisdiction of the Court of Justice of the European Union. As EU law applies to the Protocol it is unlikely that there can be much movement there.

Anyone wishing to discuss this article may call me on +44 (0)20 7404 5252 during normal business hours or send me a message through my contact form.

Brexit Briefing - June 2021

White Cliffs of Dover

Photochrom Film Collection  Copyright expired

 

Jane Lambert

The transition or implementation period provided by art 126 of the agreement by which the UK left the EU expired on 31 Dec 2020 and commentators have been taking stock.   The British economy has not collapsed though some industries have reported difficulty,  On the other hand, the economy has not shown any signs of outperforming the economies of its continental neighbours.

Cabinet Office Policy Paper

The Cabinet Office has just updated a policy paper entitled Summary: The UK’s new relationship with the EU which it first published on 8 June 2021.  The policy paper purports to give an overview of what has changed, and what remains the same and refers to a special site at https://www.gov.uk/brexit for the detail.

Influence of EU Law

The first paragraph of that policy paper states that the UK has now left the EU Single Market and Customs Union which is entirely correct. It also claims that EU law no longer applies in the UK.  That is correct only in the sense that the British government no longer participates in EU legislation, courts in this country are not bound by decisions of the Court of Justice of the European Union and judges can no longer refer cases to the court under art 267 of the Treaty on the Functioning of the European Union. However, it ignores the incorporation of EU legislation and case law into the domestic laws of England, Wales, Scotland and Northern Ireland by the European Union (Withdrawal) Act 2018 and the European Union (Withdrawal Agreement) Act 2020 and the continuing right of courts in this country to have regard to judgments of the Court of Justice that have been or may be delivered since the end of the transition period.  Moreover, anyone in the UK who wishes to invest in, trade with or even visit the EU must continue to comply with EU law. 

Travelling to the EU

The right of free movement which was ensured by art 3 (2) of the Treaty of European Union no longer applies to British nationals.  There are now new rules for visiting the EU which are set out in the Passports, Travel and Living Abroad pages of the government website. Travellers are advised to take out comprehensive travel insurance, check that their passports meet new validity rules, and get any documents they may need to take their vehicles with them.  

Existing European Health Insurance Cards ("EHIC") will continue to be recognized until they expire and similar benefits are promised under the Global Health Insurance Card ("GHIC").   Applications for new GHICs or replacements for the EHIC are directed to www.nhs.uk/GHIC but that link is broken.  The correct site is headed Applying for healthcare cover abroad (GHIC and EHIC).   As my EHIC expired on 21 June 2021 I applied for a GHIC through that website while carrying out research for this article.  I received confirmation that my application had been successful almost immediately.

Visitors from the UK are not allowed to bring a ham or cheese sandwich or indeed any other meat or dairy products with them when crossing the channel.  Almost all plants and plant products, including fruits, vegetables, flowers and seeds, require a phytosanitary certificate.  Pet passports can no longer be relied upon.  Although it is not mentioned in the policy paper, roaming charges are to be reintroduced from January 2022 (see Anthony Reuben EE to reintroduce Europe roaming charges in January 24 June 2021 BBC).  Regulation (EU) 2017/1128 on cross-border portability of online content no longer applies to the UK which means that British travellers can no longer access online content in the EU (see IPO Guidance Protecting Copyright in the UK and EU 30 Jan 2020).

Trade in Goods

Businesses now need to comply with new customs procedures, including UK export declarations and import requirements on entry to the EU.   Some industries have found it harder to adapt than others.   The Food and Drink Federation reported a 47% drop in exports in the first quarter of 2021 compared to the same quarter of 2020 (see Exports snapshot: Q1 2021).   On the other hand, sales to Australia, China, Hong Kong, Japan and Saudi Arabia actually increased slightly in that period.  

Difficulties had arisen in sales of certain foodstuffs to Northern Ireland which is now treated as part of the EU for some purposes but the Commission has agreed to extend a grace period for the export of chilled meats for the time being.  Lord Frost, who was one of the UK government's principal negotiators has admitted that he did not anticipate the difficulties that have arisen over Northern Ireland (see Government Didn't Expect Brexit To Be So Disruptive For Northern Ireland, David Frost Admits  Adam Payne 17 May 2021).  If that is really the case it is extraordinary because I warned of them in this blog as did many others in other publications (see Brexit Briefing March 2020 4 April 2020).  

One bit of good news in manufacturing was Nissan's announcement of a substantial investment in battery production in this country (see Nissan to create thousands of UK jobs in battery investment 29 June 2021 BBC website).  It is thought that the British government has invested or promised to invest a substantial sum in the project.  Even with this investment, battery production in the UK will be a fraction of that of Germany.

Trade in Services

The Trade and Cooperation Agreement did not make extensive provision for trade in services.   Talks did take place between Her Majesty's Government and the Commission on recognizing each other's standards as equivalent but these have ended without agreement (see Sunak: Financial services equivalence deal with EU 'has not happened 2 July 2021 The Guardian).   Happily, the Commission has recognized the UK's data protection legislation as broadly equivalent to its own which should ensure that the mutual exchange of personal data shall continue for the time being (see Jane Lambert Commission Adequacy Decisions 29 June 2021 NIPC Data Protection).

.   
There had been consternation earlier this year when Amsterdam appeared to overtake London in the trading of equities (see Philip Stafford Amsterdam ousts London as Europe’s top share trading hub 10 Feb 2021 FT).  London has recently recovered its position as the leading equity market (see Philip Stafford London reclaims top trading status from Amsterdam 2 July 29021 FT).  According to Stafford, London regained its lead through trading in Swiss stocks.

Free Trade Agreements

The rationale for Brexit is that the world's fastest-growing markets lie outside the EU and that any loss of trade with mainland Europe can be more than offset by increasing trade elsewhere. It is argued that commodity prices are lower ln world markets than in the EU because there are no external tariffs and that British negotiators can obtain more favourable trade deals for the British economy than EU negotiators because British interests no longer have to be weighed against those of other EU member states. So far, most of the agreements that the British government has concluded with countries outside the EU have been based on agreements between those countries and the EU. The agreement with Japan was slightly different (see Jane Lambert Agreement in Principle on a Comprehensive Economic Partnership with Japan of 12 Sept 2020 and An Introduction to and Overview of the Comprehensive Economic Partnership Agreement with Japan of 28 Oct 2020), The prospective agreement with Australia is the first bilateral trade agreement to be negotiated from scratch (see Jane Lambert The Proposed Australia-UK Free Trade Agreement of 17 June 2021).  HM Government also opened negotiations for British accession to The Comprehensive and Progressive Agreement for Trans-Pacific Partnership on 22 June 2021 (see the Department for International Trade's press release Britain launches negotiations with £9 trillion Pacific free trade area 21 June 2021 DfIT website).

Further Information

I shall be monitoring and reporting on those developments over the next few months.   Anyone wishing to discuss this article or the Brexit experiment generally may contact me on +44 (0)20 7404 5252 during normal business hours or by sending me a message through my contact form at all other times.