Brexit Saga Continues: The Northern Ireland Protocol
The notion that the EU-UK Trade and Cooperation Agreement, signed at the end of 2020, would be the last chapter of the Brexit saga has already been proven to be a misconception. As part of the Brexit Withdrawal Agreement, the EU and the UK agreed to the Northern Ireland Protocol, which practically, but not legally, severs Northern Ireland from the rest of the UK and keeps it within the EU’s customs union. As foreseen by many, this has already been the source of tensions amongst the UK and the EU, and more controversies are bound to exacerbate the already fractured EU-UK relationship.
Why was the Northern Ireland Protocol needed?
The Northern Ireland question dominated much of the Brexit negotiations. The requirement of the Good Friday Agreement to keep an open border between Northern Ireland and the Republic of Ireland, an EU member state, meant that a different approach was mandated in relation to Northern Ireland than the one adopted for the rest of the UK.
The Good Friday Agreement of 1998 resolved the long-standing political conflict in Northern Ireland between those who wished to unite Northern Ireland with the Republic of Ireland and those who favoured remaining within the UK. The agreement brought peace to the region and it provided that Northern Ireland was to remain a part of the UK, but many executive powers would be devolved to the regional assembly and there would be no border controls between Northern Ireland and the Republic of Ireland.
Both the EU and the UK identified the need to abide by the Good Friday Agreement, recognising its essential nature in keeping peace and stability within the isle of Ireland. Tough negotiations ensued, with the end result being the Northern Ireland Protocol.
The terms of the Protocol
Under the Protocol, Northern Ireland will be treated as a part of the EU’s customs union when goods move from Northern Ireland into the EU. Customs checks will be implemented at the border between Northern Ireland and the rest of the UK instead of the border between Northern Ireland and the EU. A significant portion of EU law will remain applicable to Northern Ireland, with annexes 1 to 5 of the Protocol specifying which articles, regulations, directives, and commission notices are set to remain in force.
Article 4 of the Protocol states clearly that, legally, Northern Ireland is part of the UK’s customs territory and any trade deal the UK concludes with 3rd countries will have effect in the territory of Northern Ireland as well. Yet, article 5 changes the way Northern Ireland is to be treated when it comes to the EU. When goods enter Northern Ireland, either from another part of the UK or a 3rd country, and there is a risk that those goods will be moved into the EU’s territory, then EU customs duties will be payable on the point of entry in Northern Ireland.
Importantly, there is a presumption that any good that enters Northern Ireland from a non-EU member state or other parts of the UK will be at risk of being moved into the EU and where there is no mutual agreement on the existence of such risk, the product will be considered at risk. Traders wishing to avoid paying EU customs will have to displace that presumption by filling in various forms and declarations. Several grace periods (each for different product types) were agreed upon between the parties, allowing trade to continue unhindered during these periods so that businesses could adjust to the new procedures for moving goods between Northern Ireland and the rest of the UK.
What problems have already surfaced?
Even before the transition period was over, the Northern Ireland Protocol was at the epicentre of the tensions between the two parties when the UK government proposed the Internal Market Bill in September 2020. Under the proposed law, UK ministers would have the power to unilaterally determine which goods would be at risk of being moved into the EU. Even by the government’s own admission, this law would ‘break international law in a specific and limited way’.
The Bill was widely criticised across the whole of the UK’s political spectrum, garnering scathing criticism from even the government’s own backbenchers. Understandably, the EU was furious at the perceived contempt of the UK towards its international law obligations, and it sent a letter of formal notice to the British government to warn of potential legal action if the Bill was not amended. The backlash against the Internal Market Bill eventually led to the withdrawal of its controversial clauses in December, and a trade deal was reached between the two sides.
The grace periods proved pivotal in ensuring that the Brexit associated disruption at the Irish border on the 1st of January 2021 was kept to a minimum, with only a small number of issues arising. The EU-UK Trade and Cooperation Agreement, providing for tariff-free trade between the two parties, also helped to soften the immediate effects of the UK’s exit from the EU customs union. Businesses were mostly able to continue trading across the border with only a few significant changes, yet trouble was already brewing.
Article 16 of the Protocol has proven itself to be the most controversial part of the Protocol. This article allows either party to take ‘appropriate safeguard measures’ when the application of the Protocol’s provisions would lead to serious economic, societal or environmental difficulties that are liable to persist. This effectively means that either side may suspend the Protocol in emergency situations, but any suspension must be necessary and proportional to the difficulty it aims to remedy.
In January 2021, AstraZeneca informed the EU that it would be unable to supply the number of Covid-19 vaccines it had originally planned to do, but its supply to the UK would remain unaffected. In response, the EU threatened to invoke article 16 to prevent the export of vaccines from the EU to the UK, in an attempt to force AstraZeneca’s hand into redistributing its vaccines. This did not prove to be a popular move amongst EU member states, with the Irish government especially warning against such actions. The Commission quickly withdrew its threat, offering an apology for its ‘error of judgment’.
It was not long before another issue arose; with the UK being the culprit this time. With the first grace periods coming to an end, the UK decided to unilaterally extend them. The EU objected to the UK’s decision and threatened legal action through the second letter of formal notice. If the British government does not change its approach, the EU can either instigate proceedings against the UK in the Court of Justice of the EU, with a penalty likely to be imposed, or it can refer the dispute to the binding arbitration process envisaged under the Withdrawal Agreement. Either way, the relationship between the two former partners is likely to become even more adversial.
The end result of the Protocol is that Northern Ireland, whilst being a part of the UK’s customs territory, effectively functions as an entry point into the EU’s customs territory. This means that the EU is reliant on the UK to regulate the entry of goods into its customs union, whilst the UK benefits through its compliance with the Good Friday Agreement. Yet, this relationship requires mutual trust and understanding, something that is not currently present between the two sides.
The EU-UK relationship has deteriorated to such an extent that further tensions seem inevitable. Brexit was no amicable divorce and the ‘custody’ of Northern Ireland for trade purposes is set to remain a controversial issue, at least for the next 4 years. Article 18 of the Protocol provides for the need to obtain the democratic consent of Northern Ireland to the current system in 2025, and then again every 4 years after that. The Northern Ireland question is likely to be mired in even more controversy as we move closer to this referendum, with legal actions and political manoeuvrings set to exacerbate an already tense situation.