The UK government has issued a new Command Paper, discussing the working of the Northern Ireland Protocol and seeking a change in approach.
The paper states that some aspects of the Protocol are not working well in practice, leading to disruption of supply chains and impacts upon shoppers. The paper states that:
- The UK has made great efforts to deliver the Protocol (para 18)
- All businesses moving goods from GB to NI are affected by the Protocol, but especially agri-food (para 19)
- Shoppers in NI have already been affected directly, in terms of reduced choice and availability (para 20)
- Burdens are expected to grow over time, as special easements begin to run out (para 22)
- Impacts are political and social, as well as economic (para 23)
- The current situation is not sustainable (para 27)
A “talking cure”
The Protocol contains provisions allowing signatories to act unilaterally, under certain circumstances (the Article 16 mechanism).
The new Command Paper states that circumstances to justify use of Article 16 currently exist, but that this option will be held in reserve, at least for the time being (para 34).
Instead, the UK government is seeking a “standstill on existing arrangements” (para 77) and urgent talks to find a new “consensual path” (para 36).
Such talks would focus only on the goods trade, the aspect of the relationship that is most problematic (paras 36 and 37). Specific proposals are as follows:
- Removing barriers to trade in goods between GB and NI, whilst protecting the EU:
- Customs / SPS paperwork is need to move goods from GB to NI, creating a barrier to movement
- It is suggested that traders moving goods from GB to NI will specify the final destination (para 48)
- Where goods are meant to go to the EU, full customs / SPS procedures would apply
- Goods means only for sale in NI would not require further paperwork (para 48)
- This builds on current special arrangements, but would involve high levels of trust in traders
- Allowing goods that are legal for trade in the UK to circulate within NI:
- Currently, NI remains aligned to the EU for purposes of market regulation
- It is suggested that NI should move to an explicit dual regulation regime
- In this scheme, goods meeting either EU or UK rules would be able to enter NI (para 59)
- Any goods intended for onward movement into the EU would have to meet EU rules
- Improving governance:
- The Protocol specifies that EU institutions have jurisdiction to resolves disputes
- This is unusual
- It is therefore suggested that arbitration should be handed to an international body (para 69)
The EU has indicated willingness to continue engagement with the UK on the Protocol, but no desire to renegotiate either the Protocol or the wider Trade and Co-operation Agreement.
EU Commissioner Maros Sefcovic made a statement, saying “we will continue to engage with the UK, also on the suggestions made today … We are ready to continue to seek creative solutions, within the framework of the protocol, in the interest of all communities in Northern Ireland. However, we will not agree to a renegotiation”.
More economic news and analysis
Sign up to our bulletin
Our round-up of the latest economic and political news, focused on FMCGs