This afternoon, the UK Government dropped a 28-page Command Paper entitled Northern Ireland Protocol: The Way Forward, outlining a series of proposals for how the customs arrangements for Northern Ireland need to change, in its view. While the paper itself is relatively dry, this move from Government will have far-reaching implications for trade, for international relations and for the future of the United Kingdom.
As a reminder, the Northern Ireland Protocol was an attempt to ensure that Brexit would not lead to a hard border between Northern Ireland and the Republic of Ireland. Under this protocol, Northern Ireland has remained in the European Single Market for goods and continues to operate under EU custom rules. This allows for products to be exported from the EU to Northern Ireland without checks, including exports from the Republic of Ireland, minimising the need for physical border infrastructure that could raise tensions and threaten the peace process. Instead, it has effectively placed a trade barrier between Northern Ireland and Great Britain. By invoking Article 16 of this protocol, either the EU or the UK can unilaterally suspend aspects of its operations if they see this aspect as causing ‘economic, societal or environmental difficulties’.
As part of today’s announcement, Cabinet Office Minister Lord Frost told the House of Lords that “We cannot go on as we are” and argued that there was justification for invoking Article 16, although stopped short of doing so. The Command Paper cited a rise in “political and community instability” ascribed to the Protocol and the lack of buy-in to its operation from the unionist community. Frost called for a new “balance” whereby governance of the Protocol would be no longer the responsibility of EU institutions and the European Court of Justice, as well as a standstill period to maintain grace periods already in place to allow further UK-EU negotiations.
It is already clear that what happens next with the Protocol will make a big difference to trade in goods between Northern Ireland, the rest of the UK and the European Union. Stakeholders from all sides have increasingly commented over the past months on the challenges posed by the Protocol. Over the weekend, six of Northern Ireland’s leading supermarkets called for urgent action to avoid trade disruption from October, when the end of the grace period will lead to goods arriving into Northern Ireland from Britain facing increased checks and additional paperwork, causing increased costs and complexity for retailers. The British Retail Consortium said that its members are already experiencing increased costs and challenges to ‘just in time’ supply chains, and warned of less choice and higher costs on essential products for consumers in Northern Ireland. Without action from London, Brussels and Dublin to plan for the end of the grace period, we could expect significant negative implications for imports to and exports from Northern Ireland and for its economy.
The UK Government’s unilateral declaration today could also have major implications for its global relationships. US President Joe Biden, an Irish-American, has been vocal in his support for the peace process and the Good Friday Agreement and has made clear on multiple occasions that any UK-US trade deal is contingent on preventing the return of a hard border between Northern Ireland and the Republic. Biden discussed the Protocol with Prime Minister Boris Johnson at their bilateral meeting last month at the G7. Closer to home, Taoiseach Micheál Martin made the Irish Government’s position clear this afternoon, saying that mechanisms already exist within the Withdrawal Agreement to resolve issues with the operation of the Protocol. European Commission Vice President Maroš Šefčovič backed up this position, saying this afternoon that the EU is prepared to seek ‘creative solutions’ to problems posed by the Protocol, but is not prepared to renegotiate it. Increasing tensions with international partners won’t just harm trade, but could also damage other areas of potential international cooperation.
The fudging of the border issue through the Protocol has raised tensions in Northern Ireland and called into question the future of the Union with Britain. The effective trade border between Northern Ireland and the rest of the UK has added to perceptions that Northern Ireland isn’t quite an equal partner with the other nations of the UK and led to anger from sections of the unionist and loyalist community about being left behind or forgotten by Westminster. Last month’s Northern Ireland Life and Times Survey found that nearly 53% of voters in Northern Ireland would opt to stay with the UK in a future border poll, including 17% of Catholics, but this position could change if Northern Ireland continues to be treated differently than England, Scotland or Wales. However, the publication of today’s Command Paper by the UK Government has itself stoked tensions. The reaction of the unionist community has been broadly positive, with both the Democratic Unionist Party and Ulster Unionist Party welcoming Lord Frost’s comments today. The nationalist community is less enthused, with Social Democratic and Labour Party leader Colum Eastwood MP calling it a ‘shameless position based on political expedience’ that does not serve the interests of Northern Ireland.
Today’s announcement has placed pressure on all sides to resolve some of the issues with the operation of the Protocol. This afternoon, the British Chambers of Commerce has suggested that aligning UK and EU sanitary and phytosanitary standard may resolve “the most obtrusive border checks and controls”, but called for resolution on customs and e-commerce issues to encourage the flow of goods both east-west and north-south. With time running out, expect further negotiations on the future of the Protocol over the course of the summer.