The NI protocol should be given the benefit of the doubt – but not forever

By Pete North - February 26, 2021

Remainers are making hay with the fact that Brexiteers and Unionists are furious about the Northern Ireland protocol, despite it being Johnson’s creation and one they emphatically voted for. Brexiteer mullahs hostile to May’s deal turned on a sixpence to tell us that Johnson’s deal was a tolerable improvement.

The implication here is that leavers have no right to complain that the protocol is a dog’s dinner. On the face of it they’re right, but only to a point. I argued that May’s deal was the better option in that it implied a softer Brexit. That the backstop was a backstop is a point that seemingly got lost in the noise. The implication of it, however, was that to prevent the backstop activating, it would have to be replaced with a more comprehensive deal than the one we currently have.

Though that might have been desirable from a trade perspective, the only only logical way to avoid the backstop taking effect was to remain in the EEA. But then my reasoning was faulty in that we were not dealing with logical operators, and in all likelihood, were there to be a whole UK solution, it would more resemble a patchwork of rules ported in directly from EU regulations. I don’t know precisely what form that would have taken but there’s every chance it would be even more of a dog’s dinner than the actual backstop.

Failing that, the backstop itself might have provided the template leading to a quasi customs union which wouldn’t have solved very much at all, created problems for the UK in forging new deals elsewhere, and largely tied to a regulatory regime over which we would have even less influence than Norway. The one the the ERG Ultras are right about is that May could not be trusted not to give up too much in her desire to limit the economic impact of Brexit.

However, by the time the ERG ridded us of Mrs May, it was already too late. The NI protocol as it exists now was the only other option – aside from no deal, and by that time, no-deal Brexit was a political non-option. Thus the Tories glossed over it with the intention of fixing it after the fact.

At this point it becomes a matter of attitude. Do we simply roll over accept that it’s a done deal in perpetuity, and live with the consequences of that earlier political quagmire, or do we continue to fight for something we can live with? Remainers and trade wonks fall into the former category (not that there’s much difference between them), but I see no reason to roll over.

As we keep pointing out, all comprehensive trade treaties are designed to evolve. Trade relations are a continuum, and if the EU is at all sincere about ensuring all the stakeholders are satisfied, then that must also include Unionists. They, after all, have to live with it – and the dead man’s switch is in their hands.

As it happens I don’t think we should reach for the safeguard measures as the nuclear option, but the implied threat of using them is our leverage. We should at least try to work with the system, but we must also be prepared to dump it if absolutely necessary.

On this I think there is more flex than is generally believed. During Brexit talks, everything was about rules and the letter of the law, but the game has changed now. Now it’s all about politics and what rules they can reasonably sustain in the face of public and commercial pressure. Particularly with a situation as sensitive as NI.

There is an emerging view that the EU is being overly pedantic in its application of the rules, and I have no problem believing that to be the case. Goods deemed proven to be staying in Northern Ireland should be exempt from the most invasive aspects of the protocol’s formalities and since EU official controls are contingent on risk assessment, there is scope for establishing low risk status.

We are told that the EU cannot possibly makes exceptions, but I don’t believe that to be the case since there are few directly comparable circumstances, and more to the point, it is unlikely anyone will lodge any formal complaint, lest they want to be bogged down in dispute panels arguing how it affects them. There are enough loopholes in WTO rules, and with the ever present threat of political instability, though often spuriously invoked, it provides the pretext for special exemption.

It certainly suits remainers and trade wonks alike to pretend the rules are set in stone and the EU has no flexibility, but at this point they are not good faith actors. Where there’s a will, there’s a way.

More to the point, Britain is not wholly without leverage. If the EU wants to play silly buggers with administrative exclusions, two can play that game. Targeted retaliation could see the EU winding its neck in. We are still an important market for EU agri-exports.

Further to this, the EU needs the UK to cooperate in terms of securing its customs frontier. As I understand it, the UK is dragging its heels in implementing certain measures to the irritation of the EU, and it looks like we’re going to keep doing it until the EU agrees to less stringent controls. It’s not a lot of leverage but if played well the UK is still in the game.

Brussels, of course, knows this – and will be hesitant to make any major shift in policy lest it become a precedent for controls at Calais that the UK will then exploit. We can therefore expect the NI situation to be a long war of attrition until the politics catches up with it, leading to a broader review.

My feeling is that the Protocol is not a viable long term solution, and unless unfettered trade can be restored inside our own territory then it has to go. There is talk of bilateral veterinary agreement, though this would likely mean adopting EU rules, and with Frost back in charge, I don’t see that happening, having made a big show of sovereignty. Moreover, Brexit is a chance to depart from the EU’s bureaucratic and costly system, and it would be a great shame not to capitalise on it.

For the time being, there is no danger of the Tories hitting the nuclear button on the Protocol. The UK will need to get its other bilateral deals sorted first (and CPTPP accession underway) before reopening serious EU disputes, but this matter will be an ongoing concern. As we have always averred, Brexit is a process rather than an event, and signing the TCA was by no means the end of the matter. The relationship as it stands is not one we can live with. That’s the one thing nobody is in any doubt about.