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Raoul Ruparel was the prime minister’s special adviser on Europe under Theresa May and was directly involved in Brexit negotiations for three years. Last year he predicted how the two sides would break a major deadlock over fishing.
Three months into Brexit, we need a permanent fix to problems at the Northern Ireland border.
The Northern Ireland protocol — which essentially keeps NI inside the EU’s customs union and single market for goods — means checks and controls need to be imposed on goods moving from Great Britain (GB) to NI.
But ongoing problems for businesses in Northern Ireland saw the U.K. controversially and unilaterally extend grace periods for food products moving from GB to NI. That led to much anger in Brussels. Despite the tensions, both sides have committed to make the protocol work. So here’s what’s at stake, and how they might do it.
If no permanent solution is found, food businesses like supermarkets face significant burdens at the end of the current grace periods which waive checks. The potential disruption centers on Sanitary and Phytosanitary (SPS) checks, which mean traders need export health certificates for many products, including official sign-off from vets.
The time and cost associated will disrupt NI’s food supply chains and have a real impact on everyday life. Yet the two existing ideas for a long-term fix to the SPS problem don’t look viable.
The first is an SPS agreement similar to the one the EU has with Switzerland. That essentially requires Switzerland to adopt all EU legislation in the area to remove any need for certification or checks. Britain has made it clear it will not agree to anything which involves indefinite alignment of rules, so this approach is politically unworkable.
Simply copying this agreement is also unlikely to be acceptable to the EU – at the very least it would need its own bespoke dispute resolution mechanism, and the EU has been clear it won’t replicate the arduous political resolution process it has with the Swiss elsewhere.
The second is a veterinary agreement similar to that between the EU and New Zealand. This would not require any alignment of rules, but it seeks to acknowledge the other party’s high SPS standards and allow for a reduction in the proportion of goods needing checks at the border. The U.K. and EU should really have reached such an agreement already. Yet even this plan would not fundamentally change the major burdens on business in NI given that they arise from the nature of the checks and certification needed, and not just their volume.
That means we need something new, and there are two potential solutions; one U.K.-wide and one NI-specific.
A UK-wide fix
The U.K.-wide approach would involve the U.K. and the EU reaching a novel SPS agreement based on managing divergence to try and limit the need for any checks or certification.
The concept of managing divergence has already been agreed in parts of the Trade and Cooperation Agreement (TCA) struck by the two sides last year, with the U.K. committing not to regress on current labor and social employment law. If it does, the EU can take remedial measures. This is enforced and overseen by a panel of experts.
Furthermore, a rebalancing clause allows either side to take steps if a trade-distorting gap opens up in the legislation of the two parties, such as if the U.K. decided not to follow EU laws in the future. Together these processes provide a mechanism for managing divergence which can be used elsewhere.
While the mechanisms in the TCA are focused on avoiding tariffs, applying these principles for agri-food would make sense. If Britain decided to regress or change its SPS standards, the EU would be free to take remedial measures and reinstitute full certification and checks. Similarly, if the EU instituted new regulations or legislation in SPS areas and the U.K. chose not to follow, the EU could respond. As in the TCA, both actions would be subject to review by an arbitration panel, deciding if the steps were necessary and proportionate.
The judgments would likely focus less on distortion of trade, but on any potential reduction in quality or standards for consumers. The TCA already provides for a rapid response, and the processes should be supplemented by strong domestic enforcement agencies on both sides. It could be tailored to the specific challenges being faced, too. For example, checks on live animals between GB and NI are working relatively well and were present to some extent before Brexit, so these could continue.
This solution essentially means minimal to no barriers on agri-food trade, but still lets the U.K. diverge in the future if it wants to. It would look similar to the Swiss agreement on the ground — and arguably offer even more protection for the EU by having a clear, rapid resolution mechanism in place as opposed to the woolly political mechanisms of the Swiss pact.
It also has the advantage of not requiring any changes to EU law. The U.K. would be meeting the requirements under EU law while gaining the benefits of the agreement, and if it stopped meeting those requirements, it would stop gaining the benefits.
NI-specific plan
If that U.K.-wide solution is not desirable, there’s another plan, and this one is NI-specific.
Such an approach has already been floated by Northern Ireland business groups. Essentially, it would extend the concept of goods being deemed “at risk” of being sold in the EU from just tariffs and rules of origin now to include agri-food regulations. If there’s no risk goods will be sold on, they would be exempt from agri-food requirements.
If Britain and the EU agree to extend grace periods until the end of the year, and, crucially, set up extensive monitoring and data sharing, it will bolster confidence in such a plan. Firms who have consistent data to prove their goods are only sold in NI should qualify for waivers from the end of the grace periods.
This approach would require some derogation from EU law, but this could be justified by the unique circumstances in NI and would not need to be copied elsewhere. The Northern Ireland protocol already does this by keeping NI in the EU’s customs union and single market for goods but not the rest of the single market.
Many on the EU side will ask why they should agree to either of these. Yet no one can predict what rejecting proposals like these will mean in the long term. The Northern Ireland protocol has a consent mechanism built in, meaning it ultimately rests on the support of the Northern Ireland Assembly. It would be a brave person indeed who would predict how Northern Irish politics will develop over the next four years, given the tensions already surfacing.
The EU took on commitments and responsibilities for both communities in Northern Ireland when it agreed to the protocol, and this is not simply a U.K. or Irish issue. The protocol promises to “impact as little as possible on the everyday life of communities in both Ireland and Northern Ireland.” This applies not just to disruption to life across the border with Ireland, but to Northern Ireland’s place as part of the United Kingdom. It’s hard to see how that’s being met under the current approach.
These proposals are not about scrapping or removing the protocol, but ensuring it is both fair and sustainable. If they don’t work or if the U.K. chooses to diverge, the worst case scenario is we end up where we started, albeit with a store of goodwill for the the EU from Northern Ireland’s unionists, something which is sorely lacking at the moment.
British politicians should listen too. The U.K. is arguably in the worst of all worlds when it comes to SPS regulations, aligned with the EU while being treated entirely like any other third country. By taking the U.K.-wide approach Britain can bank the benefits of smooth trade, while maintaining the right to do something different in the future if it wishes. Neither approach would stop the U.K. agreeing a trade deal with the U.S. or joining the CPTPP trading pact. And the plans could help address the 75 percent year-on-year fall in U.K. food and drink exports to the EU seen in January.
I am under no illusion that reaching such an agreement will be easy given trust between the two sides is so low, something only exacerbated by the U.K.’s unilateral actions. But both sides made commitments to the people of Northern Ireland and promised to consider pragmatic solutions. It’s time to back that up with action.
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