Niall Moran (Dublin City University)
On July 21, the UK government published its Command Paper seeking fundamental change to the rules governing trade in goods and the “overarching institutional framework” of the Protocol on Ireland/ Northern Ireland. Later that day, Commission Vice-President Maros Ševčovič clarified in a statement that the EU is not willing to renegotiate the recently agreed Protocol. Commission President von der Leyen reiterated this point and underlined that the EU will continue to be “creative and flexible” within the Protocol framework. While the EU wishes to be a constructive partner and for the implementation of the Protocol to succeed, there are limits to the creativity and flexibility it can demonstrate. These limits are explored here with reference to the three fundamental areas of concern set out in the Command Paper where “new and durable arrangements” are sought.
Governance and enforcement
In relation to the governance of the Protocol, the UK government seeks alternative dispute settlement arrangements to those in Article 12(4) to 12(7). Article 12(4) places Articles 5-10 of the Protocol under the jurisdiction of the CJEU (these are the Articles that will be subject to a ‘democratic consent vote’ from elected MLAs in 2024). The UK government now seeks a “normal treaty framework” under which governance and disputes are managed through international arbitration.
However, the result of the Protocol is that EU law applies to the United Kingdom, in respect of Northern Ireland. The CJEU has exclusive jurisdiction to interpret the EU customs code as well as the rules and standards on goods that form part of the Protocol. This context, in which more than one hundred EU Regulations referred to in Annex 2 of the Protocol apply in Northern Ireland (as well as all of the other EU legal acts referred to), forms the basis for the Protocol. The EU cannot accept having an arbitration panel pronounce upon EU law, as this would represent a threat to the autonomy of the EU legal order.
The UK is well aware of this and this proposal is a non-starter in its current form.
A lot more detail would have to be forthcoming from the UK before the EU could even consider altering the current arrangement. One possible scenario in which an arbitration panel could interpret a revised agreement would involve replacing the Protocol’s references to EU law with sui generis rules. This mammoth task of replacing the references to hundreds of EU legal acts in the Protocol would however put the foundation of the Protocol at risk, as it is premised on EU law being applied to goods entering Northern Ireland. Ultimately, this request to sideline the jurisdiction of the CJEU without detailing a viable alternative allowed the EU to quickly reject the Command Paper’s proposed renegotiation of the Protocol.
Trade in goods within the UK / within Northern Ireland
In terms of trade in goods, the Command Paper proposes risk-based controls or checks for goods moving from Great Britain to Northern Ireland. Where a UK trader states that a good’s final destination is Northern Ireland, the product would not require customs processes (paragraph 48). The paper cites the evidence of “extremely limited risks” to the Single Market as a basis for this. There are however limits to ‘trusted trader schemes’ and once goods enter into Northern Ireland, there would be difficulties preventing their movement across the EU.
The proposal extends this risk-based approach to SPS goods proposing that there would be no need for certificates or checks on items intended for the Northern Ireland market. It does acknowledge the need for “risk-based controls” on consignments of agri-food and live animals moving into Northern Ireland.
This is not new territory; the EU has long rejected the idea of a risk-based approach in these areas, as it would be capable of undermining the integrity of the European Union Single Market. Just as the UK has rejected alignment with EU rules, the EU has rejected the idea of equivalence or a risk-based approach. There are various reasons why these proposals are unacceptable to the EU including the UK’s commitment to divergence from EU standards in its new trade agreements.
The limits to creativity and flexibility
So where might we expect to see creativity and flexibility from the EU? Short of the UK proposing an acceptable solution outside of the existing framework, any flexibility or creativity should be limited to areas within the current framework.
(The current UK proposals consisting of removing the jurisdiction of the CJEU and adopting a risk-based approach to trade in goods are outside of the current framework and fall far short of being acceptable solutions.)
The EU has already made significant accommodations to date. It has shown flexibility by agreeing to the extension of grace periods, as well as in making changes to its rules on medicines, guide dogs, and the movement of livestock. The EU has identified further flexibilities to facilitate the export of certain plants and the movement of sheep and goats. It has also paused its legal actions against the UK “in order to provide the necessary space to reflect on these issues and find durable solutions”.
Such flexibility must come from both sides and the principle of parallelism has to return to the ongoing negotiations; some progress must be seen across the board and not just in areas where a headline that is potentially damaging to the EU can be generated if removed from its full context. The UK has not shown this level of flexibility to date, notably in terms of traceability requirements for food products, the construction of permanent Border Control Posts (BCPs) and access to UK customs IT systems. The construction of BCPs has been halted since February and there are capacity issues with the temporary facilities.
The Command Paper proposes a standstill on existing arrangements, including the operation of grace periods in force (paragraph 77). If there are further areas where the UK requires flexibility, these should be considered on an ad hoc basis, in line with the risk they pose to the Single Market and progress in other areas where the UK hasn’t fully implemented its obligations under the Protocol.
The next Northern Ireland Assembly election is scheduled for May 2022 and those elected will vote on Articles 5-10 of the Protocol at the end of 2024. If the Assembly were to vote against the Protocol, this could lead to a renegotiation of the customs border between the EU and the UK. While it may seem unlikely that Northern Irish voters would revive the prospect of a land border, frustration with the Protocol could lead to a vote against the status quo (this risk could be heightened if the full implementation of the Protocol is hindered and if debate centres on the shortcomings of the Protocol rather than the lack of any desirable alternative). The future of the Protocol depends on convincing the Northern Ireland electorate that it remains the best solution to the question of a border between the EU and the UK necessitated by the type of Brexit chosen by the UK government.
It is in the EU’s interest to make the Protocol work and to be seen to be making every effort to make it work. Of course, this does not extend to compromising the integrity of the Single Market, exposing itself to an open customs flank, or jeopardising the EU legal order. Furthermore, the EU has multiple trading partners and cannot risk being seen as a soft touch in the face of fresh UK demands in areas agreed upon all too recently. Creativity and flexibility are always welcome, but for the Protocol to work this must be shown by both sides, first and foremost in implementing their obligations under the current framework.
Niall Moran is an Assistant Professor in Law at Dublin City University, where he lectures in International Trade Law. He holds a PhD in International Economic Law from Bocconi University and has previously worked on trade negotiations at the European Commission.
The views expressed in this blog reflect the position of the author and not necessarily that of the Brexit Institute Blog.