LONDON – A UK move to suspend the Northern Ireland Protocol after Brexit could be a major test for European unity.
The protocol, which aims to avoid the need for a land border between Northern Ireland and the Republic of Ireland in the south, has long been the most complex Brexit conundrum. The compromise reached in the Brexit talks kept Northern Ireland sticking to key points of EU law, but the two sides disagree on how to implement it.
Talks between Brussels and London over the controversial trade deals intensify this month, with the EU set to come up with new proposals on Wednesday and the UK expected to come up with more details on its own ideas next week.
But member states are not yet sure how far they should react if Britain hits the atomic button – and some fear that a trade war with Britain could be damaging to both sides.
POLITICO spoke to officials and diplomats on both sides to find out what could happen if Boris Johnson’s administration chooses to act.
What the series is about
Britain wants the EU to restrict the scope of border controls on goods shipped to Northern Ireland from England, Scotland and Wales, given the significant disruption to business and the deep anger of Unionist politicians in Northern Ireland who see the deal as a wedge between Northern Ireland and the rest of the UK
But the British reform course – outlined in a Release in July – would de facto force Brussels to trust its assurances that restricted goods cannot enter the EU internal market via the Republic of Ireland. The EU has warned the UK not to expect a major renegotiation.
Compromises could arise in areas such as simplifying customs procedures for goods moving from the UK to Northern Ireland, including drugs – but this will not meet all UK requirements. At the heart of the problem is Britain’s attempt to change several aspects of the protocol that were controversial in the Brexit divorce negotiations and that the EU believes to have been done since the Withdrawal Agreement became international law.
These include the application of EU state aid rules in Northern Ireland and the supervision of the European Court of Justice (ECJ) when it comes to EU law in the region – the UK wants to abolish supervision. The latter is the biggest question in the eyes of the European Commission, which it sees as an ideological demand by British Prime Minister Boris Johnson rather than an issue that directly affects Northern Ireland’s businesses and citizens.
The Commission now accepts that the UK is likely to unilaterally suspend parts of the Protocol before Christmas through its Article 16 mechanism, which allows either side to avert trade problems or “serious economic, social or environmental difficulties”. Johnson and his Brexit leader David Frost have made it clear that they believe this test has already been passed.
What could the UK do?
The Commission’s formal response to the UK’s proposal – by Wednesday – is expected to include an exemption for “nationally identifiable foods” that will allow sausages and other products to enter Northern Ireland from the UK after previously agreed grace periods, official said.
Frost will present a new piece of legislation to the Commission this week that will lay the “foundation” for a new protocol.
In a speech in Lisbon on Tuesday, Frost warns that the EU proposals are inadequate. He will urge the bloc to completely lift its ban on imports of British chilled meat from the rest of the UK into Northern Ireland and remove ECJ oversight in the region, arguing that the court has “a deep imbalance in how it works of the Protocol ”.
This will open a phase of intensive talks that London does not want to last longer than three weeks, said Frost at the Conservative Party conference. Under this schedule, the UK will not take any unilateral action until at least mid-November.
The UK is expected to opt for a partial suspension limited to those areas where no compromise is reached. This could be achieved by refusing to implement it Articles 5 and 7 of the Protocol, which deal with duties on goods entering Northern Ireland from another part of the UK, as well as certifications and standards.
Depending on the outcome of the talks, the UK could also add Article 10. This requires the UK to notify Brussels of any government subsidy decisions benefiting UK companies that supply goods to Northern Ireland. Rewriting Article 10 is one of Frost’s most important demands.
The suspension of the protocol – which the bloc sees as a worst-case scenario but is supported by even the most moderate members of Johnson’s cabinet – would allow Britain to impose its own solutions. London would gain time to gather evidence to support its hypothesis that the UK approach is not really undermining the EU’s single market and to convince member states that trade retaliation would be more painful for their own economies than it was for the UK
How would the EU react??
The ball would then lie with the EU court. Article 16 of the Protocol gives the bloc the option to take “proportionate compensatory measures” for revenge if the UK fails to meet its terms. Though a long way off, the possibility of tariffs on valuable British exports such as automobiles is already being circulated.
“There would be a trade war,” said an EU diplomat when asked about the EU’s reaction. “But it won’t be right away.”
However, time is on the British side. The UK would have to give Brussels a month before invoking Article 16. This would set in motion a lengthy consultation process in the Joint Committee on the Withdrawal Agreement between the EU and the UK, in which the EU is led by Commission Vice-President Maroš Šefčovič and Great Britain von Frost.
The EU would then examine its options and likely reactivate two paused lawsuits it launched against the UK in March. Only when all legal possibilities have been exhausted are tariffs imposed.
The Commission remains in “non-escalation mode” and is focused on finding solutions, said an EU official. Work on a response to the UK began before the summer, but officials preferred not to have a list of potential measures that could get into the press and poison the talks.
However, recent frost threats and growing concerns among EU countries have led the Commission to resume this work and it now plans to consult with the EU ambassadors in Brussels on speeding up retaliation, said one of the diplomats.
Why that could put a strain on the unit
Agreeing to an EU-wide response to Article 16 will be a delicate balancing act. Diplomats from some member countries are concerned about the impact tariffs could have on their own economies as they try to recover from the pandemic.
“What retaliatory measures are taken, how quickly they happen and how hard they bite will be a test for the unity of the EU,” said Raoul Ruparel, former Brexit advisor to Theresa May as British Prime Minister.
Two diplomats said France was angry with AUKUS, the new Indo-Pacific alliance that resulted in Paris losing a billion dollar contract to build submarines for Australia; an ongoing dispute with the UK over fishing permits in the English Channel; and a dispute over asylum seekers crossing the English Channel could lead other EU capitals to go beyond what they are willing to accept.
“The root of the problem is, in a way, the very poor state of the British-French relationship,” said Charles Grant, director of the Think Tanks Center for European Reform. “It’s so bad that it makes the French pretty reluctant to even help the British on Brexit issues. And of course the French have a lot of influence on the EU institutions. ”
Grant argued that if Britain “started getting serious about diplomacy” and tried “to behave better and make some friends in Europe, then unity would be jeopardized because not everyone would follow the hard line they are following Strike the French “. . “
A trade war would be a negative outcome for all sides, so EU countries will do their utmost to avoid tariffs, said a fourth diplomat representing a member state with a high bilateral trade volume with the UK
“History has shown that EU countries stayed united on Brexit because everyone agrees that defending the integrity of the internal market is more important than any bilateral advantage with the UK,” they said. And they insisted, “Unity will win.”
Measures under consideration include putting on hold a letter of intent on financial services that was negotiated earlier this year by the UK Treasury and the Commission but has not yet been signed by EU governments. The freezing of British participation in Horizon Europe will also launch the EU’s research and development program, which the UK wants to follow up this year.
Ruparel believes, however, that neither of these two moves would force a change in the UK’s position, as protocol is heavily represented on Downing Street – while high tariffs on cars and other significant exports or the suspension of data equivalence could potentially do so. “The only really tough enforcement the EU has here is how much pain it can cause the UK – and is that pain costing the UK more than it appreciates what it wants to do in Northern Ireland?”