Trade deals, like peace agreements, aren’t worth the paper they’re printed on without good faith vested in their implementation.
Just weeks after the Brexit trade agreement entered into force, intentions over the part of the deal that applies to Northern Ireland have been called into question by both the U.K. and the European Union. Once again, the relationship between the two sides hinges on resolving differences around trade across the Irish border..
To make a long story short, the U.K. is claiming the new trading rules for Northern Ireland aren’t working, but the EU says a deal is a deal and Britain must abide by its treaty commitments. U.K. cabinet minister Michael Gove and EU Commissioner Maros Sefcovic met last week to dial down the tensions and work toward a solution. Should cooperation between the two sides break down, it would be destabilizing for Northern Ireland and it would hamper the U.K. and EU’s ability to resolve contentious issues left out of the Brexit deal, from financial services to shellfish exports to touring musicians.
The EU lit this particular fire two weeks ago when it rashly triggered Article 16 of the Northern Ireland Protocol, a safeguard measure that effectively overrides the open-border arrangement in Ireland. That was done as part of an effort to prevent Covid vaccines being exported outside the bloc. The European Commission quickly apologized and retracted the measure, but the damage was done.
Keeping an open border between EU member Ireland and Northern Ireland — which would preserve a key achievement of the 1998 Good Friday Agreement that re-established peace — was the sine qua non of the torturous Brexit divorce talks. It was also the EU’s trump card in negotiations: An open border meant the U.K. had to either stay in the EU’s customs union (a deal-breaker for Brexiters who wanted the freedom to strike independent trade deals) or put a border in the Irish Sea, which is what Boris Johnson ultimately signed up to in agreeing to the Protocol.
The EU’s vaccine misstep both undermined trust (neither Ireland nor Britain were consulted) and seemed to confirm unionist and Brexiter suspicions that the bloc only used the border issue for leverage.
It gave the U.K. an opportunity to wrangle a few more concessions out of the EU. In a letter to Sefcovic last week, Gove demanded a number of extensions and derogations to the deal, including on the export of chilled meat products to Northern Ireland.
Gove and Sefcovic agreed that the joint committee tasked with implementing the Protocol would meet by Feb. 24 to provide “the necessary political steer.” That will be the first big test of this new body, which will have to work out myriad issues going forward. As always, what complicates things are the politics.
In Northern Ireland, there are frustrations with the changes Brexit has brought, best captured by the outrage of gardeners who found they couldn’t purchase plants that might have British soil on them because of EU rules. It didn’t help that Johnson has always denied that the Protocol would mean increased checks, paperwork and new restrictions. Arlene Foster — the Democratic Unionist Party leader who held Theresa May’s government to ransom for two years — seized on the row to argue that the Protocol should be scrapped altogether, calling it a “sticking plaster.” Meanwhile, there is pressure on the EU side not to
change the agreement or allow any exemptions that would compromise the single market.
If it isn’t already clear, plenty about the U.K.-EU divorce remains unsettled. The U.K. is out of the EU, but that relationship was so deep and broad — and the new trade arrangements are so full of lacunae and booby-trapped with review clauses — that it will take years to find a new normal. In this partial state of limbo, attitude matters. Leadership on both sides and personal relationships (like that between Gove and Sefcovic) will determine whether disagreements escalate or are resolved.
The reality is that there is no alternative to the Northern Ireland Protocol for now, but with goodwill it can be improved to protect what has long been a delicate peace in Northern Ireland.
If the tensions can’t be resolved, they will impact discussions on financial services and other areas of bilateral trade. Elections in Northern Ireland next year and a 2024 vote on the Protocol itself will also provide an opportunity for voters to dissent. Plenty may be happy to do just that.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Therese Raphael is a columnist for Bloomberg Opinion.
Source: Bloomberg
