Will the Northern Ireland Protocol be eased for business?
A sense of crisis is building around the checks on trade between Great Britain (GB) and Northern Ireland (NI) under the Protocol agreed to prevent a hard border in Ireland. The basis for Boris Johnson’s 2019 ‘oven-ready’ Brexit deal is now denounced by all NI Unionists, and tensions between London and Brussels over the Protocol’s implementation threaten to draw in Washington too.
Here are five reasons why we think a crisis will be averted, with some temporary easements of the Protocol checks – but no fundamental re-negotiation.
- Neither alternative to the Protocol is acceptable to Boris Johnson
There are only two alternatives to customs checks being carried out across the Irish Sea. The UK as a whole – rather than just NI, de facto – could stay inside the EU Customs Union and Single Market for goods; a huge, probably career-ending u-turn by Boris Johnson back towards Theresa May’s deal, which would split the Conservative party. Or the border checks go up instead on the island of Ireland; more intrusive than checks at ports, requiring armed policing – and risking a return to violence. That is a red line for Ireland, the EU as a whole and, in practice, for President Biden. Going down this road would mean the end of any trade deal between the UK and EU, as well as seriously souring relations with Washington. That, too, is a price that Boris Johnson will not pay, especially ahead of the UK G7 presidency and hosting COP26 this year.
- Both London and Dublin need the Protocol to work
For these reasons – and to avoid instability in NI – both the UK and Irish governments want the Protocol to work, and gradually take the sting out of bilateral tensions over Brexit. The government wants to keep the pressure up on the European Commission to ease the Protocol checks, but is unlikely to push this to a full-blown crisis (e.g. by triggering Article 16 to suspend parts of the Protocol). The Irish government will support short-term easements, but are very mindful of other EU Member States’ concerns about a leaky EU border via NI.
- There are commercial solutions to the new trade barriers
The clear implication of the Protocol is that it will be cheaper and more predictable in the long-term to supply and distribute regulated goods to NI from within the EU single market, rather than from GB. Privately, the European Commission have been explicit with trade bodies about this necessary commercial shift, if businesses want to avoid third country border checks.
Although smaller firms have been heavily hit by the new paperwork, the biggest political ripples have been caused by household names like Marks and Spencer and Sainsburys, who supply or distribute largely from GB, struggling to keep their shelves filled in NI. To avoid the extra costs, many suppliers are taking direct ferry routes from France or even Spain to Ireland. However, freight and retail business groups in Northern Ireland are very clear that this is not a sustainable solution for most time-sensitive imports into Ireland. We are likely to see more local sourcing, and back to using the land bridge via GB, perhaps with more sealed (‘bonded’) loads.
- Unionists are unlikely to win a local majority to exit the Protocol
DUP leader Arlene Foster had accepted the reality of the Protocol, and talked about how NI could take advantage of its unique position in both the UK and EU markets. However, the DUP’s position has shifted, driven by local newspaper campaigns highlighting empty supermarket shelves, internal pressure from DUP MPs who hope to succeed Foster, and – most of all – by local polling showing the DUP haemorrhaging support. NI Assembly elections are due in 2022, and the DUP has a perennial fear of being outflanked by more hardline Unionists. Under the Protocol, the NI Assembly could, from late 2024, vote itself out of the Protocol – triggering a two-year standstill period while Border solutions were sought. However, it is very unlikely that Unionists would secure such a majority – the fears of a disruptive land border would alienate the NI middle ground. The 2022 Assembly elections are more likely to erode an anti-Protocol Unionist vote further – though the DUP may not care if they can shore up their party position in Unionist heartlands.
- The Commission are under pressure to show flexibility
The Commission’s recent, ham-fisted proposal to trigger Art.16 of the Protocol to ensure EU Covid vaccines didn’t ‘leak’ into GB from NI drew condemnation in Dublin, from all political parties in NI and in London, and was swiftly withdrawn. With NI Unionists threatening a political crisis, the Commission are likely to propose extending temporary easements – such as on checks for chilled meats or ready meals into NI from GB – to help commercial solutions bed in. The Commission may also consider raising its risk threshold for goods unlikely to move from NI into the EU. But long-term suspension or scrapping of the Protocol’s checks – which the EU sees as protecting its Single Market against diverging post-Brexit UK standards – would be blocked by the Member States. Michael Gove, the Cabinet Minister in charge of Brexit implementation, will meet his EU opposite number, Maros Sefcovic, on Thursday to discuss Protocol flexibilities.
Although the UK-EU relationship has been characterised by confrontation and competition (on Covid vaccines, China, and even UK downgrading of the diplomatic status of the EU delegation in London) since the overall trade deal was agreed, the Northern Ireland Protocol is too dangerous to become a battleground.