The United Kingdom will table new legislation in the coming weeks which, if adopted, would override the trade provisions of the Northern Ireland protocol – and set the UK on a path of fresh confrontation with the EU.
A draft bill is to be tabled in the UK parliament which would enable the free flow of goods between Great Britain and Northern Ireland though so-called ‘green channels’ – and allow businesses to choose between meeting UK or EU standards in a “new dual regulatory regime”.
Announcing the unilateral initiative in the House of Commons on Tuesday (17 May), UK foreign secretary Liz Truss emphasised that negotiations on changes to the protocol would continue in the meantime.
She noted that she had already invited her EU counterpart, European Commission vice-president Maroŝ Šefčovič, to hold talks in London to discuss the government’s plans.
But she admitted that the planned solution would inevitably lead to conflict with Brussels, noting that the changes could not be implemented unless the protocol was amended – “but the EU’s mandate does not allow the Protocol to be changed”.
Šefčovič promptly responded by saying the UK announcement “raises significant concerns”, and underlining that the EU “will need to respond with all measures at its disposal” should the UK persist with unilateral measures.
UK seeks to enforce preferred option for GB-NI trade
In essence, the UK is proposing to legislate to enforce key aspects of a proposal tabled last July in a so-called ‘command paper’ setting out a mandate for negotiations with the EU.
This proposal was countered by a Commission plan, tabled last October, which sought to provide what it saw as a more acceptable package of facilitations for movements of goods from Great Britain to Northern Ireland.
But the UK dismissed the Commission proposals as insufficient – while the EU had earlier rejected the UK’s own proposals as contrary to the terms of the Northern Ireland protocol.
Exacerbating the situation on the UK side is a crisis of governance within Northern Ireland.
The largest of the unionist parties, the Democratic Unionist Party, is refusing to sanction the formation of a new administration following the 5 May elections to the Northern Ireland Assembly until, and unless, the UK government takes action to address its concerns over the protocol.
Safeguarding east-west trade within UK
Truss told MPs in the House of Commons that even though the protocol had yet to be implemented in full – due to the operation of various grace periods and easements – traders were nevertheless already facing intolerable obstacles to movement of goods from Great Britain to Northern Ireland.
“EU customs procedures for moving goods within the UK have already meant companies are facing significant costs and paperwork. Some businesses have stopped this trade altogether,” Truss said.
“These practical problems have contributed to the sense that the east-west relationship has been undermined.”
The foreign secretary summed up the UK’s objective as “cement[ing] those provisions which are working in the Protocol, including the Common Travel Area, the Single Electricity Market and North-South cooperation, whilst fixing those elements that aren’t: on the movement of goods, goods regulation, VAT, subsidy control, and governance”.
New ‘green channel’ for trusted traders
In essence, the new parliamentary bill would shift the burden of proof away from UK traders who, under the current arrangements, have to demonstrate that their goods are not ‘at risk’ of being filtered into Ireland and the wider EU market.
Goods destined to remain within the UK would pass through a new ‘green channel’ into Northern Ireland, while goods destined for Ireland would undergo EU checks.
This, said Truss, would involve the creation of a ‘trusted trader scheme’ to provide the EU with real-time commercial data, “giving them confidence that goods intended for Northern Ireland are not entering the EU Single Market”.
The ‘green channel’ idea was in fact also contained in Šefčovič’s proposals from last October, as part of the Commission’s own facilitation proposals – although the Commission had insisted on the need to retain at least some controls on goods entering the territory.
A dual regulatory regime
At the same time, the new bill would remove regulatory barriers for goods sold in Northern Ireland, by allowing businesses to choose between meeting UK or EU standards under a new dual regulatory regime.
Truss also spoke of a desire to lift Northern Ireland out of the EU’s regulatory zone for value-added tax – one of the facets of the protocol – and apply UK VAT in the region.
The UK is also demanding that the European Court of Justice should no longer have jurisdiction in Northern Ireland – contrary to the current provisions of the protocol – and that the provisions on state aid should be revisited in light of the subsequent agreement in this area within the EU-UK Trade and Cooperation Agreement.
The biggest problem with the UK’s proposal is that it amounts to a renegotiation of the protocol. This is a point on which, as Truss herself conceded, the EU has no mandate to renegotiate.
Šefčovič: EU ‘will respond with all measures at its disposal’
In his response to the foreign secretary’s statement, Šefčovič insisted that he too wanted to find a mutually acceptable agreement to settle the Northern Ireland question, but he warned the UK firmly against unilateral action of the type proposed by Truss.
“The Protocol is an international agreement signed by the EU and the UK. Unilateral actions contradicting an international agreement are not acceptable,” the vice-president said.
“Should the UK decide to move ahead with a bill disapplying constitutive elements of the Protocol as announced today by the UK government, the EU will need to respond with all measures at its disposal,” he added.
“Our overarching objective is to find joint solutions within the framework of the Protocol. That is the way to ensure legal certainty and predictability for people and businesses in Northern Ireland.”
Uneasy stalemate set to continue
This week’s developments look set to extend the uneasy stalemate between the UK and the EU into the foreseeable future.
Truss’s repeated insistence that the UK wants negotiations with the EU to continue is a sign that the draft legislation is viewed as a kind of ‘insurance policy’ which the government hopes never to have to draw on.
Šefčovič’s oblique threat of trade sanctions against the UK raises a prospect which will likewise be viewed in Brussels as a measure of last resort.
But any solution to the Northern Ireland protocol will require trust between the two sides to make it work – and this is a commodity which is sorely lacking at present.