Politically and economically, the Northern Ireland Protocol is not fit for purpose
The government is right to pursue major changes to the post-Brexit treaty.
There is a huge disconnect between received political wisdom, which now accepts Brexit, and insistence on the maintenance of the Northern Ireland Protocol, which is incompatible with a Brexit that embraces regulatory divergence from the European Union.
The government’s critics cannot have it both ways. Politically and economically, the protocol is not fit for purpose.
Both the parliamentary Conservative Party and official opposition ostensibly oppose realignment with the EU.
The Labour Party is calling for a “New Zealand-style SPS” agreement to reduce checks on agricultural products, the same easement Lord Frost pressed the EU to accept at an earlier stage of the negotiations. A supporter of Boris Johnson during the Conservative leadership election, and now a vocal critic, cited the government’s plans to rewrite aspects of the Northern Ireland Protocol in his letter to the 1922 committee.
The protocol removes any customs formalities in Northern Ireland in respect of the land border between Northern Ireland and the Republic of Ireland. The UK has formally left the EU, but Northern Ireland remains in the EU Internal Market. The protocol has established barriers to trade at the new “Irish sea border", impeding exports from Great Britain to Northern Ireland.
The government has so far mitigated the effects of the protocol by subsidising customs processes for exports from Great Britain to Northern Ireland. This scheme, known as the UK Trader Support Service, also benefits traders exporting products to the Republic of Ireland. The EU and the UK have also agreed and extended a series of temporary grace periods for supermarkets and on chilled meats, which are banned in the EU.
Many unionists believe the protocol threatens the constitutional position of Northern Ireland in the United Kingdom. The DUP, the largest unionist party, will not re-enter power-sharing until the UK government restores Northern Ireland’s position in the UK internal market. The Act of Union 1800 guarantees the citizens of Great Britain and [Northern] Ireland shall…be entitled to the same privileges, and be on the same footing … generally in respect of trade“. The Supreme Court is currently ruling on whether the protocol subjugates the Act of Union.
It is hard to see how the protocol, in its current form, is economically sustainable.
Regulatory divergence risks locking Northern Ireland out of UK supply chains.
In the Queen’s Speech, the UK government announced the Genetic Technology (Precision Breeding) Bill to simplify the regulatory regime for precision-bred plants and animals with genetic changes that could have arisen through traditional breeding or natural processes. These products are banned in the EU Single Market under its legislation on “genetically modified organisms” (GMOs), and under the protocol would be banned in Northern Ireland. The Republic of Ireland is expanding shipping routes to the rest of the European Union. This risks undermining the UK Trader Support Service: the re-routing of goods through Northern Ireland may expand to take advantage of the subsidised route to the EU Internal Market.
As the UK policy document published on Monday states: “East-West trade links are critical to the economic success of Northern Ireland.” The value of goods purchased in Northern Ireland from GB is more than four times that from the Republic of Ireland. Trade bodies highlight new trade barriers between the Republic of Ireland and Northern Ireland would threaten agricultural supply chains. But as the ONS points out, comporable data is not available for agricultural trade between Great Britain and Northern Ireland.
The European Research Group, of which I am a member, is taking legal advice on the details of the government legislation. I will therefore not comment on it in detail.
I have some concerns about what dual regulation means in practice.
But, if the EU is not willing to change its negotiating mandate and explore alternative arrangements for protecting the EU Internal Market, as foreseen in the political declaration of the Withdrawal Agreement, there may not be a negotiated solution.
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