UK-EU Trade Deal Could Collapse Over NI Protocol


Photo Credit: Euronews

The disputes around Brexit are far from over. Vice-president of the European Commission, Maros Sefcovic, who is responsible for relations with the United Kingdom, warned last Friday of “serious consequences” if the British Government fulfills its threat to suspend the application of the protocol for Northern Ireland.

The United Kingdom has made it known that it could activate Article 16 and unilaterally suspend parts of the Northern Ireland Protocol that regulates the traffic of goods. 

During the Brexit negotiations, the European Union and the United Kingdom came to an agreement called the Northern Ireland Protocol. It was designed to avoid a hard border between Northern Ireland, which is part of the UK, and the Republic of Ireland, which is a member of the EU. The protocol also prevents merchandise controls from being established for products coming from Northern Ireland and entering the Republic of Ireland. Its raison d’être, the reason for existence, is to preserve the 1998 Good Friday Agreement that ended decades of sectarian violence.

On a technical level, the Protocol states that Northern Ireland must comply with the rules of the EU single market. In practical terms, this implies establishing controls for several products from England, Scotland, and Wales. The Unionists of Northern Ireland claim that the Protocol not only weakens ties with the United Kingdom but also causes shortage problems and financial damage.

Article 16 of the Protocol is a mechanism that allows either party to take unilateral safeguard measures in the event that the Protocol gives rise to “serious economic, social or environmental difficulties that may persist or divert trade.” The article states that the measures should be restricted in scope and duration to what is “strictly necessary to remedy the situation.” This means that Article 16 is not intended to interrupt or suspend the Protocol. If the EU or UK activate the clause, the other party can take proportionate measures to “remedy the imbalance”. The party deciding to apply safeguard measures must notify the other party of the decision “without delay” and provide “all relevant information.” Both the UK and the EU then immediately start consultations to find a solution.

The EU considered activating Article 16 during its confrontation with the pharmaceutical company AstraZeneca. The idea was to control the export of COVID-19 vaccines between the European Union and Northern Ireland to prevent European production from being diverted to the UK. But the Commission quickly changed its mind after the barrage of criticism it received from Dublin and London.

Jess Sargeant, a researcher at the think tank Institute for Government, told Euronews, “It is not entirely clear what the UK government would do with Article 16 and what measures it would take.” London has already unilaterally introduced grace periods for customs controls on certain goods and the Protocol states that any measure must address a specific problem. “If the British government established that the problems stem from customs processes, it could say that using Article 16 to eliminate those processes would end the problem,” continues Sargeant. “But there is the idea that the British government could go further and use Article 16 to suspend almost all of its trade-related obligations”.

If this were to happen, according to the protocol (after the activation of Article 16), one month of negotiations between the United Kingdom and the Joint Committee of the EU begins immediately before the safeguard measures are introduced. And once introduced, they must be reviewed every three months. However, if Brussels decides that London is using Article 16 improperly or is in breach of the Withdrawal Agreement, it can resort to the dispute resolution mechanism. “This would create an arbitration panel that would consider the issue and presents an opinion on whether the UK has violated the [Brexit] Withdrawal Agreement and Protocol more broadly,” Sargeant explains.

Hence, the collapse of the commercial relationship between the EU and the United Kingdom, although it would have to be notified twelve months in advance, would have devastating consequences on the British economy. In addition, the European Union can use its right to suspend parts of the Withdrawal Agreement and also the Trade and Cooperation Agreement, which would allow it to impose tariffs in some areas. Despite everything, the Foreign Minister of Ireland, Simon Coveney has expressed that the EU is “in a way to find solutions”, and that it has shown “enormous flexibility” in drafting a report that solves many of the problems of the implementation of the Protocol in Northern Ireland.

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