Explainer: Northern Ireland Protocol continues to cast its shadow | Business | Economy and finance news from a German perspective | DW | 17.05.2022

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Explainer: Northern Ireland Protocol continues to cast its shadow

On Tuesday, the UK government will announce planned legislation on the Northern Ireland Protocol that could end up killing its post-Brexit deal with the EU. A trade war could follow.

A British soldier pictured at the Irish border in 1974

Many questions around the Northern Ireland Protocol will still have to be sorted out

The Northern Ireland Protocol is back in the news. Indeed, it has never really gone away. Neither a two-year global pandemic nor a devastating European war have been able to take the sting out of what remains by far the biggest block to positive EU-UK relations.

The protocol is part of the UK's Brexit deal with the EU. It lays out a system of rules which governs trade in Northern Ireland since the UK left the EU. It was devised as a means of avoiding a hard border on the island of Ireland, allowing Northern Ireland to remain in the EU's single market.

However, the complicated political situation in Northern Ireland means questions over the region's status have been the primary sticking point between the EU and the UK since Brexit negotiations began.

The pro-union community in Northern Ireland (those in favor of continued union with the UK) generally resent the protocol as they feel it dilutes the strength of its union with the UK, and that it needlessly complicates trade with Britain.

The Irish nationalist community in Northern Ireland (those who favor union with Ireland) is generally in favor of the protocol, as is the main political party, the Alliance Party, which represents the "other" category (those who are neutral on the question of Irish reunification). They say it enables Northern Ireland to have the best of both worlds, namely free trade with both the UK and the EU.

So what's the latest?

The British government will on Tuesday introduce legislation to scrap parts of its Brexit deal with the EU, specifically those parts related to Northern Ireland. The UK government says it will only enact the legislation if negotiations with the EU over the protocol fail and collapse.

Watch video 01:53

Sinn Fein hails 'new era' in Northern Ireland

Such unilateral action would breach the EU–UK Trade and Cooperation Agreement, signed in December 2020, and would be a breach of international law. The EU has urged London not to go ahead with the plans. Simon Coveney, the Irish foreign minister, said: "Unilateral action will make all of this worse. It will result in legal action. It will result potentially in countermeasures."

The EU has said it is open to improving the protocol, but it will not renegotiate it, having already made considerable concessions previously to change how it operates.

What about the political situation?

Two weeks ago, elections took place in Northern Ireland. For the first time since the statelet was created over 100 years ago — and whose structures were specifically designed to perennially enshrine unionist power —an Irish nationalist party (Sinn Féin) won the most seats, topping the poll with 29%.

The Good Friday Agreement, the peace deal struck in Northern Ireland in 1998 following a 30-year ethno-nationalist conflict, requires that power is shared between the biggest unionist and Irish nationalist parties. However, the Democratic Unionist Party (DUP) has refused to help form a government until the protocol is removed. They are fully behind any move by the UK government which would override the protocol.

On Monday, Johnson visited Northern Ireland where he met the leaders of the main political parties. His plan was to convince the DUP to help form a government, hoping the planned legislation on Tuesday. would reassure them. However, that plan appeared to have backfired when the hardline DUP announced after the meeting that it would only allow Northern Irish political institutions be reestablished once legislation to remove the protocol had actually been enacted, and not only proposed.

Sinn Féin said Johnson had acted "shamefully," pointing out that the protocol was something Johnson's government had willingly signed up to. "No ifs, no buts, no conditionality, no unionist veto," the party's leader, Mary Lou McDonald, said after the meeting.

European Commissioner Maros Sefcovic

European Commissioner Maros Sefcovic has warned the UK against taking unilateral action on Northern Ireland

Is the Northern Ireland Protocol working or not?

There are mixed views. Businesses say additional paperwork and bureaucratic requirements as a result of the protocol have been a problem. "One in five manufacturers say their GB supplier is no longer willing to send goods to Northern Ireland at all," Stephen Kelly, CEO of Manufacturing Northern Ireland said last October.

Northern Irish businesses reliant on the import of components from Britain have had the most issues, with the new paperwork requirements complicating trade flows. Another grievance businesses and consumers have is that goods which are highly unlikely to leave the Northern Irish market, including certain food products, are still subject to strict checks.

However, the Northern Irish business community is not in favor of scrapping the protocol and prefers tweaks to see it operate more efficiently.

The Northern Ireland Business Brexit Working Group, which includes almost all major business groups in the region, believes the protocol can work and it has highlighted five possible improvements.

They include a reduction on sanitary checks on food products coming into Northern Ireland, specifically for produce that will remain in the region. They also want a reduction in the amount of detail required on paperwork, a voice in future changes to the protocol, a review mechanism for the protocol and barrier-free trade to help Northern Ireland benefit as best it can from access to both the EU and UK markets.

However, some economists have argued that Northern Ireland is already benefiting.

A recent study from the UK's National Institute of Economic and Social Research found that the Northern Irish economy outperformed the UK economy as a whole recently, reversing a trend in which the opposite has happened for several years.

Jeffrey Donaldson

The DUP (its leader Jeffrey Donaldson is pictured, center) is refusing to faciliate the functioning of government in Northern Ireland unless the protocol is removed entirely

"This is partly an outcome of the Northern Irish protocol and its special status in the Brexit arrangements, including better trade and investment conditions as part of the EU's single market and customs union," the report said. "Closer links with the EU, through trade and also potentially labor mobility, have benefited Northern Ireland post-Brexit," it added.

What happens now?

The UK government has threatened to take unilateral action on the protocol several times before, but has always backed down due to the possibility of the EU retaliating by withdrawing from its Brexit deal with the UK. A trade conflict could follow.

The EU and the UK are still officially negotiating the protocol, although talks have stalled in recent months. Coveney said on Tuesday that the EU was still trying to find solutions that would distinguish between goods which remain in Northern Ireland after arriving from Britain, and those which move on to EU member state Ireland.

The next big question will be when, and how seriously, negotiations between the EU and UK resume. The EU says the UK has not seriously engaged with negotiations for several months now. 

As it has largely been since the beginning of the entire Brexit process, the situation regarding Northern Ireland remains at a perplexing impasse.

Edited by: Hardy Graupner

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