NI Protocol: Complex & inconsistent? Or Just Founded on lies?
Originally posted on Facebook 2 Oct 2021
At first glance, the NI protocol seems to be political-lying-as-usual: Boris promises no Irish sea border, then signs up to a deal creating one, and, when it comes into effect, blusters, asks for flexibility, and tries to change the subject.
The reality is more complex, because the NI protocol is not a coherent document with unambiguous intent or effect. It is a political document, with clauses that contradict each other.
The EU wanted wording that protected the EU Single Market & borderless trade within the island of Ireland. The UK wanted wording protecting the UK single market across GB and Northern Ireland, freedom for the UK to set rules that diverge from EU rules, and a GB exit from the EU customs union. The UK and the EU both got wordings saying what they wanted.
UK: ‘Northern Ireland is part of the customs territory of the United Kingdom and will benefit from participation in the United Kingdom's independent trade policy’ and ‘importance of maintaining the integral place of Northern Ireland in the United Kingdom’s internal market, and ‘This Protocol respects the essential State functions and territorial integrity of the United Kingdom.’.EU ‘the rights and obligations of Ireland under the rules of the Union's internal market and customs union must be fully respected’
The paragraphs are logically incompatible: strict adherence to the commitments made in one area involves encroaching on commitments detailed elsewhere.
Article 1 sets out “This Protocol is without prejudice to the provisions of the 1998 Agreement in respect of the constitutional status of Northern Ireland and the principle of consent, which provides that any change in that status can only be made with the consent of a majority of its people” [the GFA further specifies the consent mechanism “the consent of a majority of the people of Northern Ireland voting in a poll held for the purposes of this section”.
This is building the whole edifice on shaky foundations, as, the NI protocol itself has not been subject to the consent mechanism set out in the GFA, but it does alter the
constitutional status of Northern Ireland relative to Great Britain, delays for 4years any consent process, and then lets the U.K. chose a Stormont vote instead of a plebiscite.
One could argue that, absent a specific NI vote endorsing the change, the only way to respect the GFA would be for the UK and EIRE to have the same relationship with the EU (in or out), but lets not go down that rabbit hole [not least as that interpretation could undermine the constitutionality of the GFA itself, if successor UK parliaments were restricted from GB leaving the EU without EIRE also leaving] .
Article 5 details “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”. So far so good, and, given that during UK membership of the EU, goods trade between NI and ‘the Union’ was not great, one might think that the risk was similarly small. But the article goes on to set the default assumption that goods are at risk unless they won’t be subject to commercial processing in NI and ‘fulfils the criteria established by the Joint Committee’. As the Joint Committee operates by consensus, only EU goodwill, or giving weight to other words in the protocol, would stand in the way of the EU failing to agree criteria that allow any goods to be deemed not at risk of “subsequently being moved into the Union”.
Article 6: Protection of the UK Internal Market, para 2. “Having regard to Northern Ireland's integral place in the United Kingdom's internal market, the Union and the United Kingdom shall use their best endeavours to facilitate the trade between Northern Ireland and other parts of the United Kingdom, 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.”. This sounds fine, but the wording ‘to the extent possible’ could mean almost anything: it is possible to have no checks, operate an ‘honesty box’ style system based on the honour of the declaring party, and to accept the risk of dishonesty/smuggling. It would even be quite practical to start with an ‘honesty box’ and to design/implement controls only where lying in the self-certification process was causing problems [Under Article 17 Protection of Financial Interests, action to stop tariff arbitrage smuggling would be an obligation: ‘The Union and the United Kingdom shall counter fraud and any other illegal activities affecting the financial interests of the Union or the financial interests of the United Kingdom’] . Equally, the EU may want to read “to the extent possible.” as implying ‘possible without risking entry to the EU Single Market of anything that does not meet EU standards’.
One could argue that the UK should not have signed up to a document that was vulnerable to an unreasonable approach / interpretation by the EU. But the protocol is not necessarily a trap allowing the EU carte blanche to say that “the extent possible” of “avoiding controls at the ports and airports of NI” is Zero, or to say that no goods meet the criteria to be not at risk of of “subsequently being moved into the Union”. There are at least two articles that give the UK an escape route in the event that the protocol, whether due to EU interpretations or otherwise, is not beneficial.
The first is Article 16: Safeguards, para 1: “If the application of this Protocol leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade, the Union or the United Kingdom may unilaterally take appropriate safeguard measures.”. It is interesting that when it comes to ‘economic, societal or environmental difficulties’ they must be both ‘serious’ and ‘liable to persist’ before unilateral safeguards are allowed, but the ‘diversion of trade’ criterion stands on its own and need not be ‘serious’ or ‘liable to persist’. That said, only a fool could think that there would be zero diversion of trade (a single consumer ordering a lightbulb from Dublin instead of Liverpool would constitute diversion of trade and thus, technically, meet the conditions for triggering Article 16), so, arguably, the only reasonable interpretation of ‘diversion of trade’ is to read it as qualified by, at least ‘non-trivial’; I would not qualify it with ‘serious’ because the use of ‘serious’ to qualify the wording on ‘economic, societal or environmental difficulties’ but not ‘diversion of trade’ must have been deliberate. Article 16 operation is governed by Annex 7 which is slightly contradictory: “The Union or the United Kingdom, as the case may be, may not take safeguard measures until 1 month has elapsed after the date of notification under point 1, unless the consultation procedure under point 2 [finding a commonly acceptable solution] has been concluded before the expiration of the state limit. When exceptional circumstances requiring immediate action exclude prior examination, the Union or the United Kingdom, as the case may be, may apply forthwith the protective measures strictly necessary to remedy the situation.” Interestingly the Annex does not permit measures to be taken without 1 month notice / agreement: such measures would be in breach of the protocol, but it recognises that they may occur in exceptional circumstances and allows the other side to take balancing measures.
The second is Article 18: Democratic Consent in Northern Ireland para 1 “Within 2 months before the end of both the initial period and any subsequent period, the United Kingdom shall provide the opportunity for democratic consent in Northern Ireland to the continued application of Articles 5 to 10.”. The initial period ends on 31st December 2024 (ie ‘4 years after the end of the transition period’.). The mechanism of Democratic Consent is up to the UK, ‘in a manner consistent with the [GFA]’. The UK government has legislated to use a vote in the NI assembly as the consent mechanism, but could change the law and use direct democracy.
So much for the protocol text, what has happened in practice? Boris Johnson’s talk of ‘no Irish sea border’ has proved wrong, but that that was never in doubt. The protocol creates a border, and checks. The only question is the significance of the border: the level of checks, and their real world impact. In March 2021, during a ‘grace period’ supposedly limiting the paperwork/checks required by the protocol (eg food & plant checks were being applied to only 30% of agri-food goods potentially covered), NI’s Department of Agriculture, Environment and Rural Affairs (Daera) reported that ‘The number of regulatory checks currently required on goods arriving into Northern Ireland from Great Britain equates to 20% of the total undertaken by the entire EU’. As the trade involved is under 0.5% of the EU total, it seems the EU is treating GB:NI trade as needing 40 times more checking than is usual for goods entering the EU from outside the EU. Unsurprisingly, this red tape has resulted in NI businesses moving their custom from GB suppliers (involving Irish sea checks) in favour of EIRE suppliers (no checks on the land border), who had saw exports to NI increase 50% during early 2021. Despite there being no bureaucracy in NI when lorries arrive from EIRE, the same has not been true the other way around. In July 2021 M&S’s Archie Norman made headlines revealing that it had hired 13 full-time vets to ‘simply tick boxes and fill out forms’; it had to fill out 720 pages, ie three large books worth of forms for every truck it sends over the border. M&S as a whole had to complete 40,000 pages per week for exports going to EIRE [forecast to be 120,000 pages per week after the grace period ends and lorries for NI are included]. Its error rate was less than 0.01%, but 20% of M&S exports are being turned away ‘If one page is blue instead of black typeface, the entire wagon is turned away.’, and 40%, while not turned away, face ‘delays of 24-48 hours, [meaning] most products have to be destroyed’ (these are food products like sandwiches). As a result M&S had already cut 20% of its range from its Irish stores. The Guardian reported on 21st Jan 2021 (only 21 days after transition ended) “the income of Northern Ireland hauliers and freight companies had dropped an estimated £20m since 1 January”. The EU’s general rules on food safety prohibit child meat products, including all sausages, from entering the single market from outside EFTA/EEA, implementation in EIRE has involved M&S having a lorry load of food turned back because the driver had a ‘non compliant’ sandwich in his cab for his lunch. The EU has said that when the grace period ends, Northern Ireland will no longer be able to import sausages etc from GB.
I have read about unhappiness in the unionist community at the barriers being erected between NI and GB, but I have not seen the situation on the ground, and am no expert there. Given the ‘Diversion of Trade’ situation, I don’t need to go into this as the A16 position is unambiguous even without giving weight to other factors. That there has been ‘Diversion of trade’ is obvious, as is the fact it is significant and would meet most reasonable definitions of ‘serious’ (were this required, which it is not). Thus the conditions to use Article 16’s Safeguards exist.
The UK government’s comms on the protocol have been weak. When Frost says he wants the EU to be ‘flexible’, it sounds asif he is asking for a favour, and, by implication, that this may be granted or withheld at the EU’s discretion. That is not the whole picture. He should be asking the EU to respect its legal commitments in the Protocol to “the integral place of Northern Ireland in the United Kingdom’s internal market”, and ‘the territorial integrity of the United Kingdom”. The EU is insisting on a level of checks that is incompatible with its treaty obligations. Yes the treaty says the EU can require checks, and the EU has a wide range of discretion, BUT that discretion must be exercised with an eye on the EU’s obligations and commitments within the protocol.
An analogy would be a situation where a large house, inhabited by two families, used to have a hi fi system which piped the same music/speech into every room. Then the two families decided that they didn’t want to listen to the same things, and so re-wired the sound system so that there were two groups of speakers. One in the rooms occupied by family A, and another in the rooms occupied by family B. The families agree that, rather than having to squabble and find an uneasy consensus on what to play all the time, each family should be independent “The families commit to respecting each others right to the quiet enjoyment of their own spaces, to use them for habitation, relaxation, leisure, dining, sleeping, entertaining, etc. and to the autonomous choice that each family is entitled to make regarding audio entertainment”. This means that one can listen to ‘Gardiners Question Time’, while the other chooses ‘The top 40’. But if one family puts on Wagner at full volume at 3am, waking up the other family’s toddler, then a request to turn it down to an appropriate volume is not just a request for a favour, it is asking for adherence to the commitment made that the family and its toddler can have quiet enjoyment of their bedroom and can use it for sleeping. At the moment, the EU is putting on Wagner at 3am
As far as I can see, there is a silver lining, because reasonable, and in fact pretty robust, protection of the EU’s Single market is possible with far less fuss than currently. The EU has suggested that at least 80% of checks could be abolished if the U.K. was within the EU phytosanitary regime (ie the U.K. was committed to dynamic alignment with EU rules in this area). But dynamic alignment has nothing to do with protecting the single market today. The EU currently has a U.K. that is fully aligned with the relevant EU phytosanitary rules. So, by their own admission, current UK rules allow most of the checks to be abolished. The checks are not there because the U.K. has lower standards than the EU, but because the U.K. has the ability to change its rules in future. As the EU is proposing that the U.K. adopt dynamic alignment as the way to get rid of most Irish Sea paperwork / checks, it is pretty obvious that the EU’s approach of having 40 time’s more checks than is typical at an EU border, and playing silly buggers rejecting M&S Lorries if one of the 720 pages of paperwork is completed in blue rather than black ink, is not about any risk to single market standards from M&S sandwiches. It is just a crude way to apply pressure on the U.K. because the EU would prefer that the U.K. parliament gave up its ability to diverge from EU rules that no longer suit the U.K., or, perhaps more importantly, its trade policy. The EU has a big trade surplus in agricultural goods with the U.K., which would be endangered if the U.K. opened up trade with Argentina/Australia/America, so the EU is keen to have food standards as a tool in its armoury to frustrate, or limit, such opening up. The free flow of goods across the Irish Sea would have virtually no impact on the single market. EU food exporters facing rest-of-world competition in the GB market, is a much bigger issue. But limiting Argentinian meat sales to England & Wales is not a legitimate use of protocol checks on goods going from GB to NI.
To extend the earlier analogy, the family playing 3am Wagner would not suffer if they had to play it only quietly, or through headphones. Nor would it be right or reasonable for them to say ‘we will stop playing Wagner at 3am only if you let us have your car parking space’:
Perhaps the EU ‘Wagner’ strategy of 40 times the usual level of checks and causing a headache for UK business in the hope of Parliament tying the hands of its successors with dynamic alignment was informed by their experience when Theresa May and Olly Robbins were in No10. But the issue is really a non starter and, once the EU abandons it, they will find that their legitimate interests can be protected with a relatively light touch.
The ‘Wagner’ strategy, which gives a lot of weight to the protocol wordings about protecting the EU single market [in our analogy the right to choose their own musical entertainment], and all but disregards the commitments in the protocol regarding the U.K. single market and avoiding distortion of trade [in our analogy the quiet enjoyment and use of rooms for sleeping]. The U.K. is quite reasonable to say that this is not what it envisaged, and that it requires the EU to operate the protocol in a way that minimises distortion of trade. Failing that, the UK can and should use the Article 16 safeguards that the EU agreed could be invoked in the event of such distortion. This is not ‘ripping up the agreement’, it is following the agreement. In commercial terms, it is like exercising a break clause in a lease when the conditions set out have been met. Interestingly, when the EU said it was going to use its A16 rights in Feb 2021, it said it would not honour the treaty commitment to have a 1 month consultation period first: the equivalent of walking out on a lease when the conditions to exercise the break clause had not been met.
Invoking Article 16 does not destroy the protocol, nor does it undermine it. It is a temporary measure which requires quarterly reviews. The existence of the possibility of using A16 should provide an incentive to the parties to find a compromise before it has to be invoked. The current EU approach is to pretend that using A16 is more than the usual and proper operation of the protocol. But that is nonsense: A16 was put in to be used if needed, and if there is any shame in its use, it must be borne by both parties for the failure of negotiations.
The other ‘escape route’ is Article 18 democratic consent provisions. If we want the EU to agree to a light touch regime that minimises distortion of trade and avoids economic / societal problems, why not put the regime to a vote in NI? Announce a referendum in 2023 and give the EU an incentive to look at what works for the people of NI.
FWIW, I suspect the best solution for NI would be for it to be fully in the Single Market. To have MEPs, and a seat in the council of ministers (including a veto). To accept that the relationship with GB has changed, keep the cultural links but, aim to make the change economically positive. To encourage banks to set up offices in Belfast because the City of London is not getting passporting anytime soon. But I am not of Northern Ireland, so I tread carefully. This should be their call. So far they have been treated as a political football by the EU, and have been not the main priority of the U.K. government. Unless and until they are ruled by people whose focus is the flourishing of NI, the chances of such flourishing are small.
Another approach would be Irish unification. In continental Europe many EU apparatchiks and ideologues want it, mostly as a way of showing that the UK has ‘lost out’ from Brexit. It is the stated policy of many in EIRE, though ‘be careful what you wish for’ springs to mind. The UK chancellor & treasury would probably breathe a sigh of relief at the vast savings to be made from ending subsides to NI. And what would the republic gain? The Middle East is not a close analogy, but the potential for discord is large. Irish nationalists who want not only an ‘all Ireland economy’ but also political union with the North, may be wise to think in terms of winning the peace as well as winning the battle to rule the north. That requires a unionist population that can accept becoming Irish citizens, rather than seeing southerners as unwelcome imperialists annexing Ulster and set on doing them down. A legacy of EIRE and the EU using the protocol to bash GB:NI business, impose wearysome checks, and force lorry loads of U.K. sandwiches to be dumped in landfill, would not be a good foundation for Dublin to build trust.