The EU and the UK are investing strongly in finding an arrangement to address some British concerns over the Northern Ireland Protocol negotiated in the 2019 Brexit agreement. As things stand, reaching a deal will be very difficult. Succeeding however would draw a big prize for the UK’s diplomatic relationships across the world.
The United Kingdom is dealing with a ‘trilemma’, in which it has to choose between regulatory dis- alignment with the EU in Northern Ireland, removing border checks on the island of Ireland, or removing such checks between Great Britain and Northern Ireland. It can’t have all three at once.
The deal with the EU was not to have border checks on the island of Ireland. In choosing regulatory divergence as first priority, the Boris Johnson government had to accept in 2019 what is known as an Irish Sea customs ‘border’. This comes to the dismay of Northern Ireland’s unionist community who regard themselves as an integral part of the UK.
The Northern Ireland Protocol, agreed as the final part of the UK’s 2019 Withdrawal Agreement with the EU, has never been fully implemented. For example, initial ‘grace periods’ on some customs checks across the Irish sea on products such as chilled meats, and customs declarations on parcels have been continually extended.
For the government under prime ministers Johnson and Liz Truss, such flexibilities did not go far enough. In their view, a full renegotiation of the protocol was required to respect the UK internal market to assuage unionist concerns.
By contrast, the EU’s solution has been to extend grace periods and change EU law to ensure medicine supply into Northern Ireland without changing the withdrawal treaty. Brussels would also note that the EU has been giving a foreign government control over an effective border to the EU single market, and that the barrier-free trade from Northern Ireland into the EU is a genuine economic opportunity.
London’s demands
Expectation among Brexit watchers has been that reaching some agreement would require the UK to move significantly towards the EU position. Brussels is optimistic that this is the path taken by the UK and that resolution could be within reach.
In fact formidable difficulties lie ahead.
Hopes that 2023 would see agreement on the Northern Ireland Protocol were raised with a deal on data sharing, under which the UK would provide access to real time data on goods movements across the Irish Sea. This should help implement a concept on which both parties agree, that customs checks should only be required for goods in danger of entering the EU.
More difficult is the demand from London that there should be a dual regulatory regime in Northern Ireland, under which businesses would be able to choose between meeting UK or EU product regulations. Most commentators don’t see this as a realistic suggestion – and the UK government will almost certainly have to drop it.
Keeping the primacy of EU product regulations in Northern Ireland inevitably means there is a role for the European Court of Justice. At present disputes under the protocol just go to the court – an obvious red flag to the UK government.
Finding a compromise where disputes are initially the subject of bilateral process, only going to the ECJ on matters of EU law, would seem to be achievable.
Similarly, state aid requirements under the protocol could change to be more in line with those in the Trade and Cooperation Agreement.
Political challenges in London and Belfast
There is no requirement for the UK government to seek a parliamentary vote for changes to the Northern Ireland protocol. EU member states would almost certainly welcome resolution – provided the integrity of the single market was maintained.
Since becoming UK prime minister in late October 2022, Rishi Sunak has sought to reset relations with the EU.
Perhaps sensing that, as a supporter of leaving the EU in the 2016 referendum, he does not need to prove his Brexit credentials with the Tory party, the prime minister has been able to oversee a marked decline in verbal aggression from London towards Brussels.
Rishi Sunak will however be well aware that large sections of his party, including his two predecessors, are likely to raise problems for him if he is seen to have backed down to the EU.
In the past the UK government has promised that it would either fundamentally change the protocol through negotiations or unilateral changes enacted by parliament. The relevant bill is currently paused by government choice. But to abandon it without achieving its aims would seem a risky move.
Politics in Northern Ireland is more fraught still. Unionists have been boycotting the devolved assembly, thereby preventing the functioning of the executive in Belfast and explicitly stating that the protocol is the reason for this action.
The UK government has not yet responded to frequent suggestions that Northern Ireland’s politicians and businesses need to be more involved in finding the solution to the protocol issues. Without such involvement, however, the political issues could be overwhelming.
Economic and diplomatic prize in store for resolving impasse
Previous UK governments seem to have thought resolving issues around the Northern Ireland protocol was a matter of waiting for the EU to backtrack on what was believed to be an unreasonable attitude.
Such an attitude seems to have been replaced under Sunak with a genuine wish to move on, not least because of the number of other benefits this could deliver.
Most obviously, UK-EU relations have never really had the chance to find a new equilibrium while dominated by rows over Northern Ireland.
The UK would like to participate in the EU’s Horizon research funding programme – a request which has been held up due to this dispute.
Relations with the US have also been weakened given widespread distrust of UK government intentions towards Northern Ireland. While a full FTA with the US is still unlikely, other areas of cooperation could be unlocked by resolving the Northern Ireland standoff, starting with a state visit by US president Joe Biden in April.
Britain’s CPTPP accession requires the UK’s market access negotiations to be completed, but also the UK to stop threatening to override the protocol unilaterally.
At a time when the UK economy is struggling, resolution would be a boost to the UK government. Further focus could be provided by the knowledge that a future Labour government would reach agreement by weakening the current focus on regulatory divergence through a veterinary agreement with the EU.
With these incentives clear – plus improved mood music – one can understand the increased optimism that a deal will be found over the protocol.
Political challenges remain formidable, however. Resolution will require far more sophistication than we have yet seen from the UK government.
David Henig runs the column ‘Perspectives’ on the politics of global trade for Borderlex. He is also a UK director at the think tank ECIPE.
