Placeholder while article actions load

The U.K. and the European Union are wrangling over Brexit arrangements covering trade between Great Britain and Northern Ireland that are designed to avoid the return of a hard border with the Republic of Ireland. The current regime, known as the Northern Ireland Protocol, is stifling the flow of goods and U.K. Prime Minister Boris Johnson’s government wants to rewrite the arrangements painstakingly agreed to in years of negotiations. The tensions are a reminder that, even though the U.K. officially parted ways with the EU at the start of 2020, fundamental aspects of the relationship remain problematic. 

It’s an arrangement to keep goods moving between Northern Ireland, a region of the U.K., and EU-member Ireland to the south, while making sure the border doesn’t turn into a soft target for smuggling goods into the EU. It did that by establishing physical checks on products when they arrive in Northern Ireland from mainland Britain. The U.K. government says the burden of new paperwork and customs procedures have disrupted trade and effectively created an internal border within a sovereign country. It’s also unhappy that the European Court of Justice oversees large parts of the protocol. Britain is now considering introducing domestic legislation that would override key parts of the arrangement. 

2. What could the U.K. do?

The U.K. is weighing two options. The first is to suspend part of the protocol by triggering an emergency clause known as Article 16, which either the U.K. or the EU can do if they believe it has caused “serious economic, societal or environmental difficulties” or a “diversion of trade.” Article 16 doesn’t allow one side to scrap the protocol entirely. The other option is to introduce domestic legislation giving ministers power to unilaterally turn off key parts of the Brexit deal, a move that’s bound to be met by strong EU opposition and could breach international law. Both choices would likely include a suspension of customs checks and paperwork requirements on products arriving from Britain. The U.K. insists it would prefer a negotiated solution, while not ruling these options out. 

It’s proposed concessions to reduce the customs burden on traders, but refused to scrap the role of the ECJ. EU officials say the U.K. already accepted that the protocol was the best solution to avoid a hard border on the island of Ireland and protect the integrity of the EU’s “single market” for goods, which ensures the same standards and rules governing areas such as food safety. 

4. How do people in Northern Ireland feel?

Support has been growing for parties that want to keep the protocol, weakening Johnson’s argument that it doesn’t have the confidence of the region’s population. In elections to Northern Ireland’s assembly on May 5, nationalist party Sinn Fein took seats from the Democratic Unionist Party, which wants to see the protocol scrapped. 

5. Where do we go from here?

Britain has long said that the threshold for triggering Article 16 has been met due to disruption of trade, but it’s held off from taking that final step. Unless there are exceptional circumstances, the protocol requires each side to give the other a month’s notice before activating Article 16, and they must then hold talks before any action can be taken. The other side would have the right to take immediate and proportionate retaliatory measures. If the U.K. were to suspend all customs checks on goods entering Northern Ireland, it would create a major dilemma for the EU: would the bloc be prepared to construct a border of its own between Northern Ireland and the Republic of Ireland to protect its single market? That prospect has been downplayed by EU officials. 

6. Could there be a trade war?

Quite possibly. Given the difficulty that a suspension of the protocol would create for the EU, it may look to retaliate against the U.K. in other areas of their trading arrangements. For example, it could seek to impose tariffs on sensitive industries, or increase the intensity of customs checks on goods crossing the English Channel. It might even go as far as terminating the entire post-Brexit trade deal. A tit-for-tat tariff dispute could also strain the unity of EU member states. The EU is the U.K.’s largest trading partner and businesses from both sides would lose market access. If the dispute were to spiral out of control, the hard-fought peace and stability of Northern Ireland could, ultimately, be in jeopardy. 

More stories like this are available on bloomberg.com

Leave a Reply

Your email address will not be published. Required fields are marked *