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We don’t need to break international law to protect the UK’s internal market

Northern Ireland Protocol
Written by Roderick Crawford

Roderick Crawford suggests that the article 16 of the Northern Ireland Protocol could be used to protect the people and businesses of Northern Ireland against a heavy-handed interpretation of the Protocol.

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There are a number of ways to improve the working of the Northern Ireland Protocol without breaching international law.  The first way is to get EU agreement to make sure that the protocol better balances the aims of the Northern Ireland Protocol (set out in Article 1) by fully utilising the tools and commitments set out in Articles 5 and 6; second, is to utilise the safeguards set out in Article 16 (elaborated on in Annex 7) that allow unilateral measures to be taken if ‘serious difficulties’ arise due to the application of the Protocol or if trade is diverted; third, the consent vote in 2024 offers the opportunity for the Northern Ireland Assembly to discontinue the Protocol.

There is plenty of opportunity to reduce the current maximalist position of the EU as regards the East-West customs border through negotiations in the Joint Committee — but it requires the European Commission’s agreement. Article 5 (Customs, Movement of Goods) and Article 6  (Protection of the UK Internal Market) provide options that could facilitate a lighter touch customs border on the Irish Sea that meet EU concerns to protect the Single Market, and UK concerns at minimising the impact of the protocol on its internal market. At the same time the interests of Northern Ireland’s consumers, workers, businesses and communities can be protected, as well allowing the UK to address its responsibilities towards Northern Ireland.

A flexible and imaginative solution to balancing the concession on the border is set out in the first clause of Article 5, which states:

No customs duties shall be payable for a good brought into Northern Ireland from another part of the United Kingdom by direct transport, notwithstanding paragraph 3, unless that good is at risk of subsequently being moved into the Union, whether by itself or forming part of another good following processing’.

A light interpretation of ‘at risk’has the potential to lower the costs of GB-NI trade and, if no duties are due on such goods, then a very light-touch regime of checks could be in put in place.  Despite demands from the European Commission that the UK ‘operationalise the Protocol’, no move by the EU has been made to agree to the designation of goods ‘not at risk’ under Article 5.  The UK has delivered on the border, but almost one year on from the agreement the Commission has not agreed even one good to be so designated.

Article 6, which deals with protecting the UK’s internal market, states:

Nothing in this Protocol shall prevent the United Kingdom from ensuring unfettered access for goods moving from Northern Ireland to other parts of the UK’s internal market…Having regard to Northern Ireland’s integral place in the UK’s internal market, the Union and the UK shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the UK, in accordance with applicable legislation and taking into account their respective regulatory regimes, as well as the implementation thereof.  The Joint Committee shall keep the application of this paragraph under constant review and shall adopt appropriate recommendations with a view to avoiding controls at the ports and airports of Northern Ireland to the extent possible.’

The problem is that the EU is insisting on administering this ‘in accordance with applicable legislation and taking into account their respective regulatory regimes, as well as the implementation thereof’; the applicable legislation is the Union Customs Code and associated regulations and these alone do not facilitate a light touch regime.  The only current opt-out from this is by identifying goods as ‘not at risk’ of entering the single market and of negotiating and applying other agreements for NI-GB trade, such as exemptions from export summary declarations, which would be in line with Article 6. This is an obvious recommendation for the Joint Committee to make to the Commission.

The European Commission’s view has been that the UK is responsible for implementation and must do so by fulfilling the written code of the EU’s regulatory regime; the Commission sees this is a test for the UK rather than seeing implementation as a co-operative endeavour to achieve a successful achievement of the protocol’s aims for all parties, especially the Northern Irish.

Getting a co-operative working programme with the EU is the ideal way to minimise problems for Northern Ireland and for the integrity of the UK’s internal market.  The European Commission needs some incentives to change its current approach.  Article 16 and consent both offer much promise — if handled well.

The NI Protocol has safeguard measures in Article 16 the use of which are elaborated in Annex 7.  These allow the UK to act unilaterally in the event that the application of the protocol causes ‘serious economic, social or environmental difficulties’ or results in ‘trade divergence’ that is likely to persist.  The Commission is limited in its responses to UK action – it can respond only if the UK action creates an imbalance in the Protocol: it can then take measures to ‘rebalance’ it.

The wording of Article 16 gives wide scope for UK government action in the event that the Protocol is having detrimental effects.  These effects do not have to be Northern Ireland wide; they could affect just one sector of business, like hauliers, or a particular company that found itself experiencing ‘serious economic difficulties’; social difficulties experienced by local communities adversely affected by the operation of the protocol would also be covered by this provision.

The micro-economic and social examples used to support ‘no border’ on the island of Ireland are an indicator of the level of sensitivity that the UK should pay attention to on an East-West basis. The ability of the UK to properly support NI businesses and communities will require it to develop and apply policy to alleviate these difficulties; as importantly will be its ability and willingness to gather the data on which interventions can be based — both qualitative and quantitative — at an early enough stage to ensure timely intervention before job losses, cuts in hours, reduced job opportunities, loss of investments or contracts occur, and before social costs are actually caused and damage inflicted on a community.

If a specific business is in difficulty, it could be granted a special NI ‘trusted trader’ status, allowing it to avoid costs imposed by tariffs, checks or paperwork.  If abused, that status would be lost: if mismanaged, restricted. Micro-interventions would minimise any ‘imbalance’ that might occur to the Protocol.

If the Joint Committee fails to designate goods as ‘not at risk’ of entering the single market and this causes or is clearly going to cause serious economic or social difficulties — and the evidence is that bringing retail under this designation would be needed to avoid serious difficulties — then the UK can act on its own under Article 16.  There is a good case for arguing that if these goods are not considered applicable by the European Commission for this status then the Commission is not acting in good faith in their obligations under Article 5 (‘Customs and Movement of Goods’).  If the Commission cannot give this status to retail goods, then Article 5 would essentially be meaningless, and the balance of the Protocol, imperfect though its is, would be lost.  If this designation is considered too provocative by the UK, then special status could be given to the retail companies, subject to criteria: the effect would be the same.

What is key is that in using powers under Article 16 the UK acts in the interests of all the people of Northern Ireland — and is seen to do so by both communities and by Dublin. Our actions cannot be about creating leverage over other parts of the UK-EU relationship.  The UK has to be Northern Ireland’s champion — within the terms of the Protocol, albeit interpreting and applying measures under it in flexible and imaginative ways.

Before 31 December 2024 the Northern Ireland Assembly must vote to continue the customs regime of the Protocol.  If that regime is causing serious difficulties then there is the possibility the Assembly will vote for the Protocol to be discontinued and a better alternative put in its place.  The odds are long on this being won if it is seen as a unionist/nationalist vote, and that is certainly how it would be seen today.  But the purpose of amending the Protocol to include consent was not to provide a mere veneer of democracy to the Protocol: it was to make the people of Northern Ireland masters of the future of the Protocol, not the Commission or the Brits.

For the protocol to be terminated by the Assembly in four years would be a humiliation for the Commission. If the credibility of a vote against the Protocol rose, then the Commission ought to become more flexible in its approach or risk losing the Protocol.  This would provide the basis for a co-operative UK-EU relationship in the Joint Committee that can maximise the win-win for everyone.  That should be the UK’s primary aim.  If not, then let us ensure that the people of Northern Ireland and their representative feel entirely free to vote for Northern Ireland’s best interests in 2024 and again in 2032 if it still applies then.

To realise the benefits of this strategy, the UK must get its data gathering and analysis in shape so that it can present accurate evidence of serious difficulties and trade diversion in good time and it must develop policy options that can be used by the Joint Committee or unilaterally by itself under Article 16 to address difficulties as they arise.  This will require a transformation in its interface with Northern Ireland businesses and its engagement with the devolved government and its key departments.  A lot to ask — but then much is at stake.

Roderick Crawford was editor of Parliamentary Brief. He works on conflict resolution in Yemen, Iraq and South Sudan, as well as on UK-EU relations.

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Roderick Crawford