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The Briefing

NI Protocol Deal – Analysis of February 2023 Developments

NI Protocol Deal – Analysis of February 2023 Developments Banner

by Aiken PR


AIKEN’s corporate team run the rule over the NI Protocol deal amid talk of a breakthrough between the UK and the EU.

There is growing speculation, from both UK and EU sources, that a deal is imminent on the Northern Ireland Protocol with it being reported that this could be as early as next Tuesday 21st February.

This has followed a flurry of talks between the EU and the UK, with Prime Minister Rishi Sunak expected to meet EU leaders this weekend at the Munich Security Conference, which European Commission President Ursula von der Leyen is also due to attend. This would provide the opportunity for Sunak and der Leyen to meet and discuss the proposal.

The greatest challenge for any deal will come in the form of the role of the European Court of Justice (ECJ). For both parties the future influence of the ECJ regarding arbitration of the EU single market in Northern Ireland is crucial. From an EU perspective it protects the integrity of the EU single market and, from a UK perspective, a role for the ECJ would potentially have an unacceptable impact on full sovereignty. The major difficulty for Rishi Sunak will be convincing those within the Conservative Party’s European Research Group (ERG), and crucially the DUP, on this significant issue.

It is notable that the Northern Ireland secretary, Chris Heaton–Harris, former leader of the ERG, has been involved in the negotiations from the start, accompanying the foreign secretary, James Cleverly, in all talks with the European Commission vice–president Maroš Šefčovič. Albeit, relationships between Heaton–Harris and DUP are currently strained with the latter accusing the former of political blackmail on the issue of the implementation of Organ Donation legislation, which the Secretary of State saying that it would only take one day if it was delivered through the Northern Ireland Assembly.

1. What are the key issues the deal will need to address?

Negotiators are said to have settled on a ‘red and green lane’ system, whereby goods from Great Britain destined to remain in Northern Ireland undergo fewer checks.
A key question for the DUP and Northern Ireland businesses will be to what extent checks and paperwork are eliminated.

1.1 The Lanes:

The Green lane would be for UK goods, within a trusted trader scheme, that are staying in the UK and would unburdened of unnecessary paperwork, checks and duties. From a UK government perspective, the deal will reduce checks on agri–food goods; removes tariffs on UK trade; and lifts unnecessary bans on goods.

It is being reported that negotiators have agreed that products for retail should go through this “green” lane, with discussions continuing on how to deal with wholesalers who supply to independent shops and hospitality.

The Red lane for UK goods going to the EU, or moved by traders and not in the new trusted trader scheme, they would be subject to full checks and controls and full customs procedures protecting the EU Single Market.

Talks are also continuing on how to deal with ‘intermediary’ goods, including components which may end up in finished products destined for sale in the EU’s single market.

1.2 The European Court of Justice

The EU is sticking to one of its red lines, which is the continued role of the of the European Court of Justice (ECJ). When the UK signed up to the NI Protocol they accepted a role for the ECJ, which is the guardian of EU law and single market rules. However, the UK government wants a mechanism that puts the ECJ at arm’s length from any disputes regarding the EU single market, which NI is subject to as a consequence of the NI Protocol and the unique position of having access to EU and UK markets. The most likely outcome in relation to the ECJ is that it’s a fudge, which will keep as many of the protagonists on both sides content.

It is being reported that a new path has been agreed in principle on governance and the role of the European court of justice (ECJ) in dispute resolution. It is thought this path includes the creation of a new arbitration panel and the involvement of Northern Ireland courts in devolved matters, including food and agriculture health standards. The panel would involve legal representatives from the EU and the UK and include a mechanism to give the ECJ a role in advising on matters of EU law.

2. What are Northern Ireland businesses saying?

The key question for businesses in Northern Ireland is what would you need to do to qualify for the green lane and what on–going paperwork is needed to move goods into Northern Ireland, in this way? Business groups have said that the biggest issue is not the checks at the NI ports, but the paperwork. Northern Ireland business groups say there must be a “lasting, inclusive settlement” that removes unnecessary red tape and has better mechanisms for managing divergence between EU and UK rules.

3. What are the implications for the NI Executive?

The DUP brought down the NI Executive in February 2022 when then First Minister Paul Givan resigned. They subsequently failed to elect a Speaker and a deputy First Minister after the Assembly election in May 2022 stating that they had a mandate from the electorate to address the ‘anti–democratic protocol which puts Northern Ireland’s place within the Union at risk’. The DUP had set out seven tests for the protocol, which it says must be met for it to end its boycott of devolved government in Northern Ireland.

If we are in a position whereby a deal is on the table next week, it will be over to the DUP to assess whether those tests have been met. The narrative in recent weeks by the DUP leader Sir Jeffrey Donaldson, Sammy Wilson MP, Ian Paisley MP and others has been that the ECJ, as an undemocratic institution, can have no say on internal UK/Northern Ireland matters. While many privately within the DUP may accept a fudged/ arms–length approach of the ECJ, more hardline opposition unionist parties, particularly the TUV, will seek to ensure the maximum possible leverage is extracted on this issue and this may influence the DUP’s decision. We have seen in recent times the ‘tail wagging the unionist dog’, with Jim Allister MLA consistently stating that he will be holding the DUP to their word, with the party increasingly wary of the unelected unionist influencer Jamie Bryson who has a strong media profile and is unwavering in his total opposition to all things protocol.

Interestingly, DUP MP Sammy Wilson this morning warned that, “The DUP will be the final arbiter as to whether or not any UK/EU deal meets our seven tests, not the UK Government. The fundamental issue to be dealt with is the democratic deficit and the constitutional damage caused by the imposition of EU law. If that is not dealt with then any proposed deal is worthless.” This suggests that the party is preparing to take a stringent line.

Another not insignificant factor is if this was all to play out, would be how the DUP sell this to the electorate given their stance, not least with the potential for them re–entering an Executive which would see a nationalist/republican as Northern Ireland’s First Minister, for the first time in its history.

It is not inconceivable that there is an NI Protocol deal, but no deal in place that will enable the formation of the Northern Ireland Executive.