UK set to reject EU's NI Protocol proposals as spectre of Article 16 looms

Mon 11 Oct 2021
Posted by: William Barns-Graham
Trade News

Lord Frost

The EU is to table a package of proposals to improve the Northern Ireland Protocol, but the UK seems set to reject them, potentially triggering a trade war.

European Commission vice president Maros Sefcovic will table four papers on Wednesday offering solutions around the movement of medicines, inspections on meat, dairy and plant products, and customs facilitation.

According to the Guardian, this will include a “national identity” exemption for British sausages and other products that would otherwise be banned from moving from Great Britain to Northern Ireland.

Squabble

Brussels and Britain have been in disagreement over the implementation of the Protocol since it came into force at the end of the transition period on 31 December 2020.

Under the Protocol, agreed to in the Withdrawal Agreement in 2019, Northern Ireland continues to abide by EU single market rules to prevent the need for a hard border on the island of Ireland.

De-escalation

The FT reports that the EU has offered to scrap many of the border controls put in place between Northern Ireland and Great Britain under the Protocol, allowing free circulation of many food products in NI, in an attempt to de-escalate tensions.

The European Commission has already agreed to permit the free circulation of medicines from Great Britain, which were in danger of no longer being supplied due to new and costly regulatory requirements.

Despite concessions, the Guardian says a trade war remains likely and that EU relations minister Lord Frost will use a speech in Portugal tomorrow to say that the EU’s concessions do not go far enough.

New arrangements

Renewing his call for “significant” changes, Frost will say: “Without new arrangements in this area, the Protocol will never have the support it needs to survive.”

Britain wants to remove the European Court of Justice (ECJ) as the arbiter of disputes over the Protocol, something not included in Sefcovic’s papers.

Coveney vs Frost

Frost and Irish foreign minister Simon Coveney exchanged Twitter blows over the ECJ’s role this weekend.

Coveney questioned how serious the UK government was about negotiations when it was creating “a new ‘red line’ barrier to progress, that they know the EU can’t move on”.

Frost responded that “the issue of governance and the ECJ is not new”.

He added: “We set out our concerns three months ago in our 21 July Command Paper. The problem is that too few people seem to have listened.”

Short window for negotiation

Frost has said there is a short window of opportunity to strike a deal once the EU proposals are tabled.

“We need a short and intensive negotiation, and when I say short, I mean weeks, three weeks,” he said.

Frost has threatened triggering Article 16, which allows the UK and the EU to suspend any part of the agreement that causes “economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”.

Key events

  • Tuesday 12 October – Lord Frost will make a speech in Lisbon and present a legal text to the EU reflecting the UK's proposals for a renegotiated NI Protocol
  • Wednesday 13 October – the EU will unveil its own proposals for reforming the Protocol
  • Early November  Lord Frost has stated that he will trigger Article 16 no later than the beginning of November if the EU's proposals are not satisfactory

Test of EU unity

According to Politico, the European Commission accepts the UK is likely to unilaterally suspend parts of the Protocol before Christmas.

It says this could pose a major test of European unity as member states are undecided on the extent of EU retaliation should the UK triggers Article 16.

Article 16 timeline

The UK would have to give one-month’s notice before invoking Article 16, kicking off a lengthy process of consultation.

The EU would then consider its options and would likely reactivate the two paused lawsuits it launched following unilateral suspension of grace periods by Britain in March.

Only once legal avenues have been exhausted would tariffs be imposed.