LONDON — A British move to suspend the post-Brexit Northern Ireland protocol could pose a major test of European unity.
The protocol, which seeks to avoid the need for a land border between Northern Ireland and the Republic of Ireland to the south, has long been the most complex Brexit conundrum. The compromise struck as part of Brexit talks kept Northern Ireland aligned to key bits of EU law but the two sides disagree on its implementation.
Talks between Brussels and London over the controversial trade arrangements intensify this month, with the EU due to put forward a fresh set of proposals on Wednesday and the U.K. expected to offer more detail on its own ideas next week.
Yet member states aren’t yet settled on how far to go in response if the U.K. presses the nuclear button — and some fear a trade war with Britain would be damaging for both sides.
POLITICO spoke to officials and diplomats on both sides to map out what might happen if Boris Johnson’s government decides to act.
What the row is about
Britain wants the EU to reduce the scope of border controls on goods shipped into Northern Ireland from England, Scotland and Wales, in the face of major disruption to business and deep anger from unionist politicians in Northern Ireland, who see the arrangement as driving a wedge between Northern Ireland and the rest of the U.K.
But the U.K.’s pitch for reform — outlined in a paper published in July — would effectively require Brussels to trust its assurances that restricted goods can’t make their way into the EU’s single market through the Republic of Ireland. The EU has warned Britain not to expect a significant renegotiation.
Compromise could emerge on areas such as simplification of customs processes for goods moving from Great Britain into Northern Ireland, including drugs — but this won’t meet all of the U.K. demands. The nut of the problem is Britain’s attempt to change several aspects of the protocol which were controversial in the Brexit divorce negotiations and that the EU considers settled since the Withdrawal Agreement became international law.
These include the application of EU state aid rules in Northern Ireland, and the oversight of the European Court of Justice (ECJ) when it comes to EU law in the region — oversight the U.K. wants to scrap. The latter is the biggest ask in the eyes of the European Commission, which considers it an ideological demand by U.K. Prime Minister Boris Johnson rather than an issue directly affecting Northern Ireland’s businesses and citizens.
The Commission now accepts the U.K. is likely to unilaterally suspend parts of the protocol before Christmas through its Article 16 mechanism, which allows either side to act to avert trade trouble or “serious economic, societal or environmental difficulties.” Johnson and his Brexit point-man David Frost have made it clear they believe this test has already been met.
What could the UK do?
The Commission’s formal response to the U.K.’s proposal — due Wednesday — is set to include an exception for “national identity food products,” allowing sausages and other products to enter Northern Ireland from Great Britain after the end of previously-agreed grace periods, an EU official said.
Frost will submit a new legal text to the Commission this week, setting the “foundation” for a new protocol.
In a speech in Lisbon Tuesday, Frost will warn EU proposals are insufficient. He will press the bloc to scrap its ban on British chilled meats entering Northern Ireland from the rest of the U.K. altogether and remove oversight of the ECJ in the region, arguing the court “has created a deep imbalance in the way the protocol operates.”
This will open a period of intense talks that London would like to last no more than three weeks, Frost told the Conservative party conference. Under this timetable, Britain will refrain from taking any unilateral action until at least mid-November.
The U.K. is expected to opt for a partial suspension, limited to the areas where no compromise is reached. This could be achieved by refusing to implement Articles 5 and 7 of the protocol, which deal with customs duties on goods entering Northern Ireland from any other part of the U.K. as well as certification and standards.
Depending on the outcome of the talks, the U.K. might also add Article 10 to the mix. This requires the U.K. to inform Brussels of any state subsidy decisions benefitting British firms supplying goods to Northern Ireland. Rewriting Article 10 is one of Frost’s key demands.
Suspension of the protocol — considered the worst-case scenario by the bloc but supported by even the most moderate members of Johnson’s Cabinet — would give Britain an opportunity to impose its own solutions. London would buy time to gather evidence supporting its hypothesis that the U.K.’s approach does not actually undermine the EU’s single market, and to persuade member states that retaliatory trade measures would be more painful for their own economies than for the U.K.
How would the EU respond?
The ball would then be in the EU’s court. Article 16 of the protocol gives the bloc the chance to retaliate with “proportionate rebalancing measures” if the U.K. fails to comply with its terms. Although a distant prospect, the possibility of tariffs on valuable British exports like cars is already being floated.
“There would be a trade war,” an EU diplomat said when asked what the EU response would be. “But it won’t be immediate.”
Time, however, is on Britain’s side. The U.K. would have to give one-month’s notice to Brussels before invoking Article 16. This would kick-off a lengthy process of consultation at the EU-U.K. Withdrawal Agreement Joint Committee, where the EU is represented by Commission Vice-President Maroš Šefčovič and the U.K. by Frost.
The EU would then consider its options and is likely to reactivate two paused lawsuits it launched against the U.K. in March. Only once all its legal avenues have been exhausted would tariffs be imposed.
The Commission remains in “non-escalation mode,” and concentrated on finding solutions, an EU official said. Work on a response to the U.K. started before the summer, but officials preferred not to have a list of potential measures that could leak to the press and poison talks.
Yet recent threats from Frost and growing anxiety among EU countries have pushed the Commission to reactivate this work and it now plans to consult with EU ambassadors in Brussels on faster retaliatory measures, one of the diplomats said.
Why that could strain unity
Agreeing an EU-wide response to Article 16 will be a delicate balancing act. Diplomats from some member countries are uneasy about the impact tariffs might have on their own national economies just as they try to recover from the pandemic.
“Exactly what retaliation is taken, how quickly it happens, and how hard it bites will be a test for the EU’s unity,” said Raoul Ruparel, a former Brexit adviser to Theresa May as U.K. prime minister.
Two diplomats said France’s anger over AUKUS, the new Indo-Pacific alliance which resulted in Paris losing a multibillion contract to build submarines for Australia; an ongoing row with Britain over fishing permits in the Channel; and a dispute over asylum seekers crossing the Channel could lead it to push other EU capitals beyond what they are willing to accept.
“The root of the problem, in a way, is the very bad state of the British-French relationship,” said Charles Grant, director of the Centre for European Reform think tank. “It is so bad that it makes the French quite unwilling to help the British at all on Brexit issues. And the French of course are very influential on the EU institutions.”
Grant argued that if the U.K. “started to get serious about diplomacy” and tried to “behave better and make some friends in Europe, then there would be a threat to unity because not everybody would want to follow the hard line that the French are taking.”
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, who represents a member country with high levels of bilateral trade with the U.K.
“History has shown that EU countries have remained united on Brexit, because everybody agreed that defending the integrity of the single market was more important than any advantage one could have bilaterally with the U.K.,” they said. And they insisted: “Unity will prevail.”
Measures under consideration include permanently putting on ice a memorandum of understanding on financial services, negotiated by the U.K.’s Treasury and the Commission earlier this year but not yet signed off by EU governments. Freezing Britain’s participation in Horizon Europe, the EU’s research and development program — which the U.K. is hoping to associate to this year — is also floated.
Yet Ruparel believes neither of those two moves would force a change in Britain’s position given the strength of feeling on the protocol in Downing Street — whereas high tariffs on cars and other significant exports or the suspension of data equivalence just might. “The only real hard enforcement the EU has here is how much pain they can cause the U.K. — and does that pain cost the U.K. more than it values what it wants to do in Northern Ireland?”
Source: Politico
