Northern Ireland’s 30 years of ‘Troubles’ were brought to an end by the 1998 Good Friday Agreement (the GFA). The GFA was based on the principle of cross-community support from both nationalists and unionists: a delicate compromise which sought a middle path between the Unionists – who see N Ireland as an integral part of the UK – and the Nationalists – who view the future of N Ireland as lying in reunification with the Republic.
The success of the GFA was underpinned by the fact that both the UK and the Republic of Ireland were in the EU. Whilst both countries were members of the EU, there was no need for a border between N Ireland the Republic – goods and services could flow unimpeded across the border. Leaving the EU required a bespoke solution to N Ireland – one that respected the GFA and did not reimpose a physical border between N Ireland and the Republic: a visible manifestation of a divided island.
Squaring the circle of respecting the GFA, whilst taking the UK as a whole out of the EU, was always the most complicated part of Brexit. With the UK outside the EU, a customs border would be required somewhere: it could not be between N Ireland and the Republic, because of the need to respect the GFA and avoid antagonizing the Nationalist community. The only place that border could be therefore, was in the Irish Sea between N Ireland and the rest of GB – which risked irritating the Unionist community.
The Northern Ireland Protocol
The solution to this delicate balancing act was the Northern Ireland Protocol (the NIP), which left N Ireland in the EU Single Market, but brought it out of the Customs Union, enabling N Ireland to have the best of both worlds, with one foot in the UK and the other in the EU. However, the NIP imposed checks on goods (especially food and medicine) from GB arriving into N Ireland, to ensure they complied with EU standards and avoid the risk of them leaking into the EU Single Market through the back door: these checks have so far been unilaterally postponed by the UK.
Elections add to the complexity…
Underpinning the principle of cross-community support, the GFA introduced a power-sharing agreement for government in N Ireland. The Party that won the most seats in the elections would appoint the First Minister and the Party that came second would appoint the Deputy First Minister. In effect, the powers of the two roles are identical, but the N Ireland Government cannot be convened without the two roles being filled. Until the 5 May Elections, the Unionist DUP had always occupied the role of First Minister, with Nationalist Sinn Fein appointing the Deputy First Minister. However, on 5 May, the Unionist vote was split between three Unionist Parties (the DUP, the Ulster Unionist Party and the Traditional Unionist Vote) allowing Sinn Fein to become the largest single Party and, accordingly, winning the right to appoint the First Minister.
The DUP views Sinn Fein’s victory in the N Ireland elections as (further) evidence that the NIP is damaging the status of N Ireland within the UK and, by treating N Ireland differently from the rest of the UK, increasing the possibility of Irish reunification (an eventuality foreseen in the GFA). The DUP has taken the position that until the NIP is reformed (or abandoned) it will refuse to appoint anyone to the role of Deputy First Minister; nominate any Ministers to form a new Executive; or support the election of a new Speaker – effectively bringing government in N Ireland to a standstill.
The UK Government Position
The UK Government has been arguing for some time that the NIP in its current form is ‘unworkable’ and has been calling on the EU to ‘show flexibility’. The UK demands are essentially:
- the removal of all checks and paperwork for the transport of goods between Great Britain and N Ireland;
- that goods remaining in Northern Ireland only need to meet British standards without also needing to comply with EU law; and
- the removal of the jurisdiction of the European Commission and the European Court of Justice in overseeing the NIP.
The EU responded in October 2021 with a series of proposals:
- 80% reduction in checks on food products arriving in Northern Ireland
- Reduction in customs information firms need to provide.
- Passing legislation to allow trade in medicines between GB and Northern Ireland to continue; and
- relaxing rules on the transport of chilled meats.
The EU has indicated it would be prepared to go further in reducing checks on goods coming into the region from Great Britain, but argues that it needs improved access to relevant U.K. data on the goods coming in from Britain (see comment section below).
The Notorious Article 16…
For its part, the UK has been arguing for some time that the conditions for invoking the now-famous Article 16 of the NIP (which allows either side to suspend any part of the agreement which is causing “economic, societal or environmental difficulties”) have been met, but that the UK has not triggered Article 16 as a ‘gesture of good faith’. The position of the DUP enables the UK government to make the case that the NIP is damaging the prospects for peace in N Ireland and that – if the NIP cannot be renegotiated – it should be dis-applied (notwithstanding the fact that a majority of those who voted in the 5 May elections voted for Parties that support the NIP).
The UK PM Boris Johnson is in Belfast today to meet the leaders of the political Parties. On Sunday evening he confirmed that the U.K. will unveil its “next steps” on the Northern Ireland protocol “in the coming days.” It appears that the UK the Government is preparing to pass the necessary legislation to override the NIP – perhaps even as early as tomorrow.
If the UK does dis-apply the NIP, the EU is likely to respond with retaliatory and escalating trade measures. The Irish Government this morning warned the UK that it would face a “very difficult summer” if took unilateral action on the NIP, which is viewed in the EU as an integral part of the overall UK-EU Brexit trade deal.
The UK threatened to over-ride the NIP before: it has not yet done so. Despite the fact that this time it has taken the step of preparing draft legislation, it seems unlikely that the UK government will choose now – with a war on the European Continent and a weakening economy – to provoke a trade war with its nearest and most important economic partner.
It seems more likely that the PM’s visit to N Ireland will result in a compromise, the landing ground for which is clear – see note above. The PM’s article in The Telegraph today suggests that he expects the DUP to rejoin the Executive and to make politics in N Ireland function. The new UK legislation gives the UK leverage in trying to force further compromise from the EU. The risk is that the EU does not move fast enough in response and the UK finds itself forced not only to pass its draft legislation into law, but to put it into effect.
If trading relations between the UK and the EU do deteriorate, then companies exporting goods between the two may find themselves subject to new constraints. Those companies will need to understand the dynamics between the UK and the EU and ensure they are well-positioned to avoid the worst impacts of any increase in trading frictions.
Covington’s mixed teams of regulatory and public policy experts with our teams in Brussels London and Dublin is well-placed to help clients navigate these complex issues and would be delighted to work with you.