The author is managing director for Europe at Eurasia Group
In threatening the EU on the Northern Ireland protocol, the UK once again risks mistaking its wishes for reality. There may be differences of opinion in the EU. There will not be — if push comes to shove — the stark divisions that London imagines.
Despite a commitment to intensify negotiations and a slightly softer tone last week from Brexit minister Lord David Frost and European Commission vice-president Maros Sefcovic, Brussels fears that the UK government will notify its intention to suspend parts of the protocol, probably in December.
The British calculation is that member states will be united in making a fuss in public but much less aggressive in practice. London believes that the Irish and French are isolated and that the Dutch, Germans and Poles will oppose any suspension of the UK-EU trade deal.
While it is true that persisting Brexit issues create the risk of “Irish fatigue” — something that Dublin is acutely aware of — the UK government’s assessment of potential EU splits is mistaken.
First, its characterisation of the German and Dutch position is simply wrong. Second, Poland understands that it cannot expect the EU’s support over its borders with Belarus and not support Ireland over its border issues with the UK.
There is a strong current of thinking in Whitehall that member states are not particularly bothered about Northern Ireland — certainly not enough to risk their commercial interests. British officials believe that many EU capitals see little objective risk to the single market if unchecked goods flow from Britain into Northern Ireland. There is also a belief in London that member states are frustrated with the commission for failing to deliver the constructive strategic relationship with the UK that they seek.
The government is betting that the deal it can secure with an Article 16 notification will be better than anything it can secure without one. It wants a controlled explosion, allowing an agreement to come together in 30 days of talks after notification. It would never have to suspend the parts of the protocol that it claims are causing “serious economic, societal or environmental difficulties” and a “diversion of trade”.
This is a huge gamble.
The EU will view the government’s use of Article 16 as the culmination of a process of “bad faith” which began with the Internal Market Bill, the unilateral extension of grace periods to ease trade between Britain and Northern Ireland and the command paper in July setting out the UK’s plans to rewrite the protocol. The latter, EU officials believe, would require a fundamental reconstruction of it — much more than the “renegotiation” Lord Frost demands, and which the EU refuses to entertain.
Brussels suspects the ultimate British objective is to establish facts on the ground. The aim would be to show there is little risk to the EU single market’s integrity if goods from Britain destined for Northern Ireland remain free of customs and regulatory controls.
As the commission will not force Dublin to impose a border on the island of Ireland, pressure will build over time to implement checks on goods heading onward from Ireland to the rest of the EU. But the EU is determined never to let Ireland be separated from the single market. It will be confronted with what it regards as British blackmail — forced to accept the risk of an unchecked, open Irish border or jeopardising Ireland’s place in the single market.
The EU will not allow either to create a new reality which member states believe is contrary to their interests — especially if Britain diverges from EU regulations and standards in the future.
Starting a process to terminate the post-Brexit trade deal — or an announcement to consider such a move — is possible. But while it has been a useful rallying cry in recent weeks, and the reason why many in the EU believe Lord Frost is engaging more constructively in negotiations, building consensus on full termination will not be easy. Partly terminating the trade deal — except for chapters on social security and police co-operation — is more plausible.
Brussels and member states are also exploring more subtle, legally creative ways to strike immediately against the UK, without waiting months for arbitration or a European Court of Justice ruling. This could involve tariffs on sensitive UK goods, putting London under pressure to respond in kind. An explosion might be difficult to control.
UK officials argue that they will not be undermining the protocol if they issue an Article 16 notification. But the state of UK-EU relations is dire. The EU will see it as a hostile act and give a quick, forceful response. It would take a brave, perhaps foolish prime minister, to wager the opposite.
Source: Economy - ft.com
