The Good Friday Agreement

The Troubles, which began in 1968 and lasted until the Good Friday Agreement (GFA) in 1998, left more than 3,700 people dead. The GFA introduced a new power-sharing N Ireland Government structure; decommissioned paramilitary weapons; established a number of joint committees between the UK, N and S Ireland to oversee the implementation of the GFA and address any possible tensions between the N and S Ireland or between communities in the North; created the ‘all-Ireland economy’; and protected the Common Travel Area.  But perhaps the most totemic and visible sign of the GFA’s success was the removal of the physical border infrastructure between N and S Ireland.

N Ireland & Brexit

When the UK left the EU, so too did N Ireland. Once the UK was no longer in the EU, an international border between the EU and the UK was inevitable. The only shared land border is the N/S Ireland frontier. The tensions between preserving the UK’s territorial integrity; protecting the GFA; and preserving the EU’s Single Market create a circle which cannot be squared – putting the border back between N/S Ireland would please the Unionists/Loyalists, but breach the GFA; putting it between GB and N Ireland would please the Nationalists, but jeopardise the UK’s territorial integrity.  Theresa May sought to square this circle by means of the Backstop, which would have left the UK in the EU’s Customs Union.  This option was replaced by the NIP when Boris Johnson became the PM.

The Northern Ireland Protocol

The Northern Ireland Protocol (the NIP) was the answer to this Brexit conundrum.  Under the NIP, N Ireland remains in the EU Single Market for trading purposes, but remains in the UK for customs, legal and administrative purposes. To protect the GFA, the administrative border between the UK and the EU was placed ‘in’ the Irish Sea, meaning goods travelling from GB to N Ireland are inspected on arrival in N Ireland by N Irish inspectors who apply EU customs rules. No customs duties are payable on goods moved from GB to N Ireland, unless those goods are ‘at risk of making their way onwards into the EU.

Checks on Goods moving from GB to N Ireland

The NIP staggered the introduction of border checks to help companies adapt to the new trading arrangements. Some goods were subject to checks from 1 February 2021.  Others only after the expiry of a grace period at the end of March, designed hip.  A second grace period (which covers the import of chilled meats, including chicken nuggets, sausages and minced beef into the EU) expires at the end of June.  A third grace period expires in October.

Impact of the NIP on N Ireland

A Joint Committee, set up to oversee the implementation of the NIP, has made progress on some issues including the supply of medicines to Northern Ireland from GB; the movement of guide dogs between Great Britain and Northern Ireland; VAT on second-hand vehicles; the provision by the UK of provided interim; and long-term plans for the EU’s access to Britain’s customs IT systems and databases.

However, the NIP has led to shortages of some goods in shops and transport difficulties across the Irish Sea.  The N. Ireland Department of Agriculture stated the new Irish Sea trade border is checking some 2,000 Common Export Health Documents a week. A CBI paper, released in early June, quotes a number of examples – a cheese going from GB into N. Ireland requires eight new customs declaration forms.  According to the CBI, these checks are making trade “unviable” for many smaller GB businesses supplying Northern Ireland.

Grace Period Extension

The UK views the Irish Sea border as incompatible with the pledge that the NIP “should impact as little as possible on everyday life” in Ireland and N. Ireland.  The UK Government is increasingly public in its view that the NIP in its current form is ‘unsustainable’ and vocal in its demands for the EU to be ‘pragmatic’, rather than ‘legalistic’.

This conclusion led the UK, in March 2021 to request a two-year suspension of border checks. When the EU rejected that request, the UK unilaterally extended the March grace period for six months.  A further unilateral delay to the implementation of checks on pets moving from GB to N Ireland followed.  And the UK is now threatening to unilaterally extend the grace period is due to expire at the end of June.

The EU views the NIP as an immutable agreement, which cannot be renegotiated in whole or in part.  The Commission has made clear that the EU’s response to further UK unilateral suspension of grace periods will be “swift, firm and resolute”.

Legal Proceedings

The EU has already begun legal enforcement proceedings in response to the UK’s March grace period extension.  The next step in those proceedings is for the European Commission to give the UK two months to rescind its suspension of border checks.  If the UK does not comply within that time limit, the case will go to the ECJ, which has the power to impose a financial penalty or tariffs against UK exports.

The Withdrawal Agreement also allows for an arbitration procedure with sanctions including the imposition of wide-reaching tariffs for non-compliance.

Article 16 – the Nuclear Option?

Article 16 of the NIP allows either side to suspend it in the event of ‘serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade’.   The EU invoked this article at the end of January to prevent the export of vaccines from the EU into the UK.  Whilst the EU’s action was disproportionate and ill-judged, it had no practical effect, as it was revoked within hours.  However, the EU’s action created a precedent, of which the UK’s PM Johnson was conscious when he made explicit the UK’s willingness to trigger Article 16 at the end of the G7 Summit.

How are things in N Ireland Itself? 

Tensions are rising. The Unionist community feels abandoned and betrayed and view the NIP as working to the benefit of the Nationalists’ objective of a United Ireland.  The new DUP leader, Edwin Poots, has called for the NIP to be dismantled.  A protracted outburst of Unionist street violence in April (the worst seen for years) only ended in deference to the death of Prince Philip. Poots has warned of a recurrence of violence on the streets of Belfast – a prediction which seems depressingly realistic, with the traditional ‘marching season’ beginning next month.

At the moment when the GFA’s power-sharing arrangements, designed to manage community tensions, are most needed, the local politicians find themselves at loggerheads.  With the resignation of Arlene Foster as First Minister, the previous power-sharing structure ceased.  The DUP and Sinn Fein must appoint and approve successors to both First and Deputy First Minister positions within one week. However, Poots’ decision not to approve a new Irish Language Law provoked a threat from Sinn Fein not to support a DUP First Minister.  Failure to agree the nominees to the new positions within the time limit would result in the UK Government calling an election in N Ireland – arguably the last thing needed at a time of such tension.

What can be done?

The tensions over N. Ireland reflect the inevitable difficulties of Brexit and adjusting to new realities. The UK feels that the EU has not adapted to the presence of a third country with a large military force and powerful economy on its doorstep.  And the EU feels that the UK has not recognized that Brexit brings consequences in the way the EU treats and manage the UK.

The US and the EU were guarantors of the GFA.  Whilst the EU may no longer be wholly neutral in this affair, President Biden has taken a close interest in N Ireland, warning that peace in Ireland could not be ‘collateral damage’ of Brexit.  So concerned is the President that it is reported that the US made a point, on the eve of his first overseas trip, of warning the UK government it was “inflaming” tensions in Ireland. There are rumours the President may appoint a N. Ireland Envoy.

But the long-term solution is the willingness of the EU and the UK to find a compromise. Those discussions have begun – the UK is proposing a system of mutual recognition of agrifoods standards (which would obviate the need for most checks) and the management of any future divergence through a mixture of product labelling schemes and enforcement by either side.  The EU has suggested that the UK could follow their rules on sanitary standards (and the US has indicated that taking this step would not affect the chances of a trade deal with the US – the ultimate prize).

The combination of Covington’s teams of public policy experts in the EU and the UK and our lawyers in Ireland, means that we are ideally placed to advise clients exporting their goods to or from N Ireland.  We would be delighted to discuss these issues.