Weeks after signalling his plan, Boris Johnson’s Conservative government has published legislation that would override key parts of the Northern Ireland protocol, the part of the 2019 Brexit divorce deal that sets out trading rules for Northern Ireland after the UK left the EU.
What has the British government done today?
UK foreign secretary Liz Truss has presented a bill to the House of Commons that, if passed and acted upon, would fundamentally and unilaterally, without agreement from the EU, change the trade rules that the EU and the UK agreed would apply to Northern Ireland after Brexit.
What was the protocol intended to do again?
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The agreement was part of the Brexit deal brokered by the EU and the UK that kept Northern Ireland in the EU single market and applied EU rules and standards to ensure that goods would be checked at ports in Northern Ireland rather than at the land border between Northern Ireland and the Republic to avoid a trade border and customs checks on the island of Ireland.
How does the protocol work in practice?
Northern Irish companies must fill out paperwork on goods they are importing from Britain and, in the case of plants and food and drink products of animal origin, complete a significant volume of forms and complete checks to comply with the EU’s strict food health and sanitary rules. Many checks, such as on food products being delivered by large British supermarket chains to their stores in Northern Ireland and on parcels destined for consumers in the North, have not yet begun because there are grace periods in place delaying their introduction.
What effect have the protocol checks had?
Some businesses in Britain have stopped supplying to traders in Northern Ireland, forcing companies to look for alternative suppliers in the Republic and elsewhere in the EU. The volume of north-south trade on the island of Ireland has increased quite dramatically as a result.
What do people in Northern Ireland think of the protocol?
A majority of businesses and industry groups in the North say that the protocol is not perfect, creates new red tape and would like it changed but they like the fact that it gives them access to both the EU and UK markets. A majority of politicians recently elected in Northern Ireland support the protocol but unionists want it replaced because they argue that it damages Northern Ireland’s economy and undermines Northern Ireland’s place within the UK.
How is the UK government proposing to change it?
On a practical level, the British legislation would give UK ministers powers to rip up the protocol rules to take away the need for checks on goods that end up staying in Northern Ireland. The government’s view is that if the goods are essentially staying within the UK internal market then they should not be subjected to checks. It argues that only a sixth of goods going into Northern Ireland are at risk of entering the EU single market by travelling on into the Republic or elsewhere into the EU. On the other side, the EU has argued for the need to have checks on goods as they enter Northern Ireland from Britain in case they enter the EU single market.
How is the UK government proposing to make changes?
London wants to create a “green channel” for goods heading into and staying in Northern Ireland and a “red lane” for any goods moving from Britain into Northern Ireland destined for the Republic or elsewhere in the EU. A “trusted trader scheme” would be set up for established businesses trading across the Irish Sea with data shared with the EU “in real time” by UK customs officials and heavy penalties for those who abuse this new system.
The UK government would carry out any regulatory, fiscal or anti-smuggling checks on “red lane” goods. It is proposed that “dual” regulatory “routes” would be introduced to allow businesses to have a choice of whether goods placed on the market in Northern Ireland meet either EU or UK rules, (or even both), although the bill does not say how this complex arrangement might work.
What other changes are proposed?
Johnson’s government want Northern Ireland to benefit from the same tax breaks and spending policies as the rest of the UK. Currently, Northern Irish businesses cannot enjoy UK VAT rules on energy-saving materials given that EU VAT rules apply in the North, while Northern Irish companies are bound by EU rules on state aid under the protocol. More fundamentally, the UK want the European Court of Justice removed as the final arbiter in the mechanism to resolve any EU-UK disputes that emerge under the protocol – a position that Brussels has refused to countenance in any way.
So are we heading for a major dispute between London and Brussels?
The UK government has said its preference remains for a “negotiated solution” but that it had to act unilaterally to remove “unnecessary barriers” and “significant costs” on east-west trade between Britain and Northern Ireland. It has also argued that the protocol was preventing a new powersharing government being established in Belfast because of unionist opposition.
London has said the EU “must be willing to change the protocol itself” – but Brussels has rejected this option; European Commission vice-president Maros Sefcovic said the renegotiation of the protocol was “unrealistic” and that “no alternative workable solution has been found”. The Irish Government has said that the bill breaches international law.
London said the bill protects the “delicate balance” of the Belfast Agreement, Northern Ireland’s 1998 peace deal, while Sefcovic has said the protocol protects that agreement “in all its dimensions”. Johnson has dismissed the bill as “not a big deal”, whereas Minister for Foreign Affairs Simon Coveney has said that it is “a big deal”. This is underscored by the fact that the EU has threatened to unfreeze legal infringement actions taken against the UK over the introduction of grace periods on checks and to start new legal proceedings over this latest action.
What do businesses in Northern Ireland say will be the effect of the bill?
Industry groups say the proposed changes will significantly increase the burden on some businesses. Manufacturers or wholesalers who don’t know whether their product is going to end in Northern Ireland or in the EU will have to process everything through the “red channel” with significant amounts of additional paperwork required, including certificates of origin which are not required under the protocol. Food and drink producers believe the “dual” regulatory proposal could interfere with cross-Border trade between Northern Ireland and the Republic/rest of the EU. This is a big deal; a third of milk produced in Northern Ireland goes south.
Dr Mike Johnston, chief executive of the Dairy Council of Northern Ireland, told the BBC the protocol has been working. “Is it perfect? No. Can aspects of it be improved? Yes,” he said.
“The protocol needs reform, not the UK running through it like a wrecking ball,” said Stephen Kelly, chief executive of the industry group, Manufacturing NI.
