May 17 (Reuters) – Britain said on Tuesday it would push forward new legislation to effectively roll back parts of a post-Brexit trade deal for Northern Ireland, stoking tensions with Europe. Read more
Below are details of how the trade rules have worked in Northern Ireland, the impact they have had on provincial policy and what the new dispute could mean for UK-Ireland relations. EU.
WHAT IS THE NORTHERN IRELAND PROTOCOL
As part of Britain’s departure from the EU, Prime Minister Boris Johnson’s government agreed to effectively leave Northern Ireland in the EU’s single market for goods and customs union given from its open border with EU member Ireland.
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This has created a customs border in the sea between the rest of the UK and the province, which pro-British communities say is eroding their place within the UK.
London says the bureaucracy created by the Northern Ireland protocol is intolerable and is now threatening the 1998 peace deal that ended three decades of sectarian violence in the province.
CHECKS AND DOCUMENTS
Many checks on goods from Britain were not implemented after London applied grace periods. Where changes have taken effect, paperwork, costs and staffing requirements have increased.
Britain says a ‘green lane’ should be introduced for products destined for Northern Ireland, avoiding the comprehensive checks needed for the EU. Additional labeling would, however, increase costs for producers.
UK retailer Marks & Spencer says it takes around eight hours to complete post-Brexit paperwork to transport goods to its stores in the Republic of Ireland, and around an hour for Northern Ireland currently, due to delays of thanks.
In the first year of the protocol, trade between the Republic of Ireland and Northern Ireland surged, with imports increasing by 65% and exports to the province by 54%, suggesting stronger ties between Northern Ireland and the Republic.
WHAT BRITTANY WANTS, WHAT BRUSSELS SAYS
Britain has already tried to force change on Northern Ireland’s trade, through an Internal Markets Bill that several British officials described to Reuters as a “shock tactic”.
After an initial backlash, trade negotiations resumed. The EU offered to relax the rules in October 2021, but Britain said they did not go far enough and were actually worse than the current operation in some respects.
Government officials say that when the protocol was signed, both sides agreed that some parts might have to change if the treaty caused problems for the province.
Under the new plans, the legislation would make it easier to move goods, apply the British tax system in Northern Ireland and give London more leverage over the laws governing the province.
The EU says the protocol is a legally binding treaty that was freely entered into by the UK government and is frustrated by cycles of repeated ‘Groundhog Day’ outbursts over the issue.
Brussels says any unilateral action is unacceptable, but has repeatedly said it is willing to seek practical solutions within the existing framework.
WHAT CAN EUROPE DO?
The Commission could relaunch “infringement proceedings” which were originally triggered by a UK decision to extend grace periods. They were cut short in favor of more talks.
The Commission could immediately relaunch these proceedings regarding alleged breaches of EU law, although it could take two years before any decision and fine from the European Court of Justice. He could also simply retaliate on a broken treaty.
The Commission could also consider a separate dispute resolution system that was included as part of the Brexit divorce and commerce deal. This could result in the suspension of parts of the EU-UK trade deal and lead to the imposition of tariffs.
THE ROLE OF TRADE UNIONISTS
Elections to the Northern Ireland regional assembly this month reaffirmed that a majority of lawmakers favor keeping the protocol and that it should be refined in talks with the EU. All pro-British Unionist politicians oppose it.
The Democratic Unionist Party, the largest pro-British party, refused to enter a power-sharing administration until protocol was overridden, preventing the assembly from sitting. Read more
The DUP, which fears a loosening of ties with the British mainland, wants the removal of all planned post-Brexit checks or controls on goods moving from Britain to Northern Ireland. He said the British threat of unilateral action was not enough.
Irish nationalist Sinn Fein, the largest party in the province after assembly elections, accepts the protocol given the party’s aim of Irish unification and wants to remain in the EU.
With small militant groups still behind sporadic violence in the region, analysts say a political vacuum is never good in Northern Ireland. However, there was no major impact when a disagreement between the main parties prevented the regional assembly from sitting between 2017 and 2020.
The Northern Ireland Assembly is due to vote for the first time in 2024 on whether to keep the protocol. If a simple majority votes against, it would cease to apply after two more years. However, if, as expected, lawmakers vote to keep it, the next vote will take place four years later.
CAN BRITAIN AND EUROPE ALLOW A TRADE WAR?
With inflation soaring in Britain and the EU, a trade war would be detrimental to both sides. Johnson’s government escalated the rhetoric several times, before softening its tone. But the problem remains unresolved.
Philip Shaw, chief economist at Investec, said the pound remained potentially subject to further selling if it looked like Europe might impose tariffs.
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Written by Kate Holton; Additional reporting by James Davey and Dhara Ranasinghe in London, Phil Blenkinsop and John Chalmers in Brussels; Editing by Jon Boyle
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