Greetings from a sunny, serene Brussels. The daffodils are emerging, the birds are singing and there is a deal on the Northern Ireland protocol.
European Commission negotiators have emerged blinking from the dreaded “tunnel” of intensive talks required to thrash out an agreement after two years of tensions with the UK.
I am told the final days included late-night sessions deciding how much time British businesses would get to tweak production lines to slap labels on produce stating it was “Not for EU”. And precisely which goods could be sold in Northern Ireland below the 5 per cent minimum EU VAT rate. (They settled on only things that could be bolted down such as heat pumps, unlikely to escape across the Irish border.)
There was then the difficulty of trying to nail down the Windsor framework, a rather bespoke, ramshackle arrangement, with more than 100 pages of legalese.
The agreement ends a bitter dispute over the trading arrangements for Northern Ireland, the result of the UK leaving the EU single market in 2021. To avoid a trade border on the island of Ireland after the UK left the single market one was imposed in the Irish Sea. That led to checks on goods arriving from Britain and a ban on beloved products such as oak saplings, angering Northern Ireland’s unionist community.
Here is a quick recap on the main points of the deal that might smooth EU/UK relations, at least for a few months:
A new “green lane” for freight destined to remain in the region with lighter controls while freight moving on to — or through — the Republic has tighter ones.
The free circulation of British medicines in Northern Ireland.
Fresh meat and other foodstuffs made to UK standards will be allowed to enter Northern Ireland as long as they are labelled.
Parcels to friends or family and shopping online will not require customs paperwork and businesses using approved parcel carriers will have simplified customs procedures.
The ability for the UK to set VAT rules on some items, with the two sides drawing up a list of others.
The ability for the UK to set excise duties according to alcoholic content and cut them for alcohol sold in hospitality locations (but not in shops where the bottles could move into the single market). Subject to EU minimum levels.
British seed potatoes and plants can enter Northern Ireland.
The Stormont brake, through which the assembly could ask the UK to block updates to single market rules that previously applied automatically in the region.
Some of these changes require amending the protocol, including the brake. The two sides used Article 164 of the EU-UK Withdrawal Agreement, which enables them to revise the deals for up to four years in the event of “unforeseen” errors or omissions.
The Commission will now present a proposal to change the Northern Ireland protocol to which a qualified majority of member states must agree. That is expected this month, diplomats say. Maroš Šefčovič, the commission vice-president in charge of Brexit, can then make the change in the Joint Committee, a body he co-chairs with UK foreign secretary James Cleverly.
Other measures, such as medicines, require legislation with the European parliament involved as well, which could take a few months.
EU diplomats say while there are questions about the Stormont brake — member states cannot pick and choose which rules they accept — they expect broad support for the deal. “No one wants to go back to the negotiating table,” said one.
The brake can only be used “as a last resort”, the framework says, and if it is abused the EU can take “remedial measures” though these must be proportionate. Any disputes are resolved by international arbitration.
EU diplomats dispute Rishi Sunak’s boast that he has secured a veto over updates to single market rules that apply in Northern Ireland. If the arbitration panel ruled the UK should apply it and it refused, it would undermine the entire framework and indeed put the post-Brexit tariff-free, quota-free trade deal at risk.
However, no one wants to comment publicly until the prime minister has implemented the deal: it still has to pass a vote in the House of Commons and overcome possible resistance by the Democratic Unionist party.
Simon Coveney, Irish enterprise minister, said earlier today that the EU needed to provide “reassurance to everybody who is asking questions” and “give people time and space to try to respond to this new agreement in a positive way”.
As foreign minister until December, Coveney knows just how hard it was to secure a deal — especially when Boris Johnson and Liz Truss chose a path of confrontation with Brussels.
“The most important thing . . . is the improvement in the trust between the Prime Minister’s office and the present European Commission. And the appetite to try to solve problems together in partnership is clearly now there,” he said.
There are those who question whether the EU had shown too much faith in the British. The key breakthrough came in January when it was satisfied that the UK had a reliable system to track goods that the EU could look at in real time to check for fraud.
“If the commission sees a vast increase in pork pies heading for Northern Ireland it can take action,” said one EU diplomat.
Ireland also bolstered its market surveillance before Brexit. Now, market stalls and corner shops can expect more frequent visits from undercover inspectors looking for pork pies or titanium-laced cakes. Titanium dioxide, used to whiten foods such as chewing gum and cake icing, is banned in the EU as harmful but allowed in the UK — and therefore Northern Ireland under this deal.
So while the UK stresses the freedoms Northern Ireland has gained the EU talks about safeguards. If banned goods or dangerous foods were found heading into Ireland and the single market it could revoke parts of the deal, for example demanding full customs checks again.
“These reform proposals come with strings attached,” said Billy Melo Araujo, senior law lecturer at Queen’s University Belfast.
“There are significant data sharing commitments taken by the UK, reinforced surveillance mechanisms that the UK has to put in place.
“Based on recent history, to what extent will the UK actually invest in infrastructure and institutions which ensure surveillance, data sharing and enforcement of these rules on a continuous basis? We simply do not know.”
That question is also being asked in EU capitals. Countries such as the Netherlands and Germany have long feared an influx of dangerous goods entering the single market across the Irish border. However, British officials say that after two years during which the UK refused to deploy the full controls on imports demanded by Brussels there has been no evidence of this happening — a fact which convinced them to effectively outsource border control to London.
“It’s a system relying entirely on EU-UK trust now,” says Georg Riekeles, associate director at the European Policy Centre, who helped negotiated the original protocol. “They are using Article 164 to substantially empty/alter the protocol — on VAT and excise, agrifood, health standards, checks and controls.”
For Northern Ireland’s sake, we must all hope that trust is justified.
Brexit in numbers
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The Windsor framework has received almost universal acclaim. But one person with reservations is Wales’ first minister. Mark Drakeford told me on a visit to Brussels that the deal creates “perverse incentives” to move freight destined only for Northern Ireland to direct routes.
That could divert trade away from the Welsh ports of Holyhead and Fishguard, which link Great Britain to Ireland.
“We hope that there won’t be perverse incentives for firms to avoid ports where the direction of travel is directly to the Republic in favour of ports that operate directly between Northern Ireland and GB,” he said.
“It’s a concern for us that we’ll be watching carefully.”
Dublin to Holyhead, once the main route used by Irish hauliers taking goods to France and beyond over the so-called “land bridge”, has suffered already and is 30 per cent down on pre-Covid, pre-Brexit levels. Meanwhile ports such as Cairnryan, which serves Larne and Belfast, have had a boost.
The Irish government said it was also alive to unforeseen impacts of the deal.
Dublin port traffic has recovered almost to pre-Covid levels as customers switch from Holyhead to routes to France.
But Irish minister Coveney said he would raise any negative impacts through the EU/UK Joint Committee that can change aspects of the protocol.
Arriving for a meeting in Brussels, he said: “We want to make this work and we want to make sure that if there are any other issues that need to be teased through and resolved, that there is an appetite to do that in the appropriate structures that were put in place to do that, in this case, the Joint Committee.”
Stena Line, the Swedish company that operates Holyhead port, also has direct routes from England and Scotland to Belfast. It welcomed the deal that “removes the notion of a border in the Irish Sea”.
But Ian Hampton, Stena’s chief operating officer, said: “What we need now is alignment with Wales and the removal of the current disparity between the Republic of Ireland and Northern Ireland, because Britain intrinsically trades with the island of Ireland as a whole.”
The company has joined a bid for a freeport in Holyhead, which would abolish many customs controls and simplify trade on these indirect routes to Northern Ireland.
He added: “Restoring freight flows through the British land bridge will also lower costs for our customers in Ireland and on the continent.”
Peter Foster is on leave, writing a book about Brexit and will return later this month.
Britain after Brexit is edited by Gordon Smith. Premium subscribers can sign up here to have it delivered straight to their inbox every Thursday afternoon. Or you can take out a Premium subscription here. We welcome feedback so please get in touch via email at britainafterbrexit@ft.com or hit reply on this newsletter.
Source: Economy - ft.com
