Earlier this month, the Prime Minister of Ireland, Michael Martin, commented on the UK’s breach of Northern Ireland’s protocol bill, “the unilateral breach of the Protocol is very serious – an international deal ratified by British Parliament and approved by the PM”, as quoted by Reuters. The Northern Ireland protocol, enforced at the start of 2021, is a set of trade agreements for the transportation of goods between the UK, the European Union and Northern Ireland, post-Brexit. After the ratification of Brexit, Northern Ireland was considered no longer part of the EU, and as such, the NI protocol agreed that imported goods would be checked at Northern Ireland’s ports, and there would be no additional regulations on imported goods between Northern Ireland and the Republic of Ireland. The protocol was implemented to avoid trade barriers, and ensure free movement of goods between Northern Ireland and the EU. As implemented by the protocol, Northern Ireland would operate under the EU’s free movement of goods and custom union rules; allowing goods to be sent into the EU without trade barriers, tariffs, or custom checks.
Under the protocol, Northern Ireland operates as a part of the EU’s single market for goods, which makes the movement of goods from Great Britain to NI subject to EU custom union rules. On the 13th of June, the UK introduced new legislation to the NI protocol, which exempts goods imported from Great Britain to be subject to EU custom rules. As outlined in the UK Government’s press release, the amendments consist of implementing a green and a red channel to differentiate between goods imported to Northern Ireland and those imported to the Republic of Ireland and the EU. This legislation would also change tax rules, allowing Northern Ireland businesses, who currently follow EU VAT rules, to benefit from UK tax breaks, loans, and VAT cuts. Lastly, the UK is pushing for an independent body to settle disputes over the protocol, separate from the European Court of Justice.
The UK government argues that these amendments protect the EU, whilst also preserving the Good Friday agreement, which is vital for the preservation of political stability in Northern Ireland. According to BBC News, Foreign Secretary Liz Truss said she wanted to “fix the problems with the Northern Ireland Protocol and restore political stability”. However, the EU commission states that these amendments would only create further uncertainties. During a Q&A, which took place on June 15th, the EU commission stated that the proposed channel system would “create significant risks for the EU Single Market and would be open to all kinds of fraud”. When asked if there were any alternative negotiations, the EU representative stated that “no workable alternative solution has been found to this delicate, long-negotiated balance. Any renegotiation would simply bring further legal uncertainty for people and businesses in Northern Ireland”. When specifically asked about the UK’s concern for the Good Friday agreement, the representative stated that “the EU has proven time and again its commitment to the Good Friday agreement to preserve the hard-earned gains of the peace process”, and that the UK has not fulfilled its own obligations to the NI protocol.
According to BBC news, the EU has stated that it is open to discussing the protocol and is willing to consider reducing customs duties, checks and paperwork. However, the commission stated that if the UK is not open to discussing within these limits, it “reserves the right to act at any time to protect the EU Single Market and to uphold respect for its agreements and international law.” While the EU has proposed alternative solutions, it has also made clear that their response is unrestricted, if the UK passes the legislation on the NI protocol. As a result, there is a potential of a trade war between the UK and EU, which would leave businesses and consumers vulnerable. As of Monday the 27th of June, the legislation passed its first vote in the House of Commons, despite varying opinions in parliament. While Prime Minister Boris Johnson and Foreign Secretary Liz Truss affirmed that the legislation was necessary and legally justified, the shadow Foreign Secretary David Lammy stated that “this bill is damaging and counterproductive. The strategy behind it is flawed. The legal justification for it is feeble. The precedent it sets is dangerous, and the timing could hardly be worse. It divides the United Kingdom and the European Union.” Similarly, according to the Guardian, former Prime Minister Theresa May, former International Aid Minister Andrew Mitchell, and former Labour Chair of the Brexit committee Hilary Benn, have all expressed concern for the passing of this bill. They believe that the legislation is unnecessary, could hinder the Good Friday Agreement, would be a breach of international law, and would harm Northern Ireland businesses.
Ultimately, the potential of a trade war would be extremely damaging to Northern Ireland and the Republic of Ireland’s economic growth, it would heavily taint the UK’s reputation in its commitment to international law, as well as affect the living standards and welfare of consumers and business owners who are forced to face higher prices and costs. As of now, a trade war has not fully begun, however, if the UK continues and succeeds in its plan to pass the NI legislation, the European Union will be free to take legal action. As such, communication between the UK and EU right now is crucial in order to avoid an escalation of the current trade dispute. The EU has expressed that it is open to discussion, and the UK’s engagement is necessary to avoid a further divide of parliament, but more importantly to avoid the economic strains of trade conflicts.
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