Boris Johnson has thrown everything up in the air. The EU has to bring them down to earth

The roller coaster continues.

In its story today the Times slips in unattributably Johnson’s terms for a deal.

The right of government  to subsidise company development  is the Trojan horse  that has emerged as the biggest obstacle to a deal because it continues to apply to GB as  well as NI,  leaving a remnant of  EU regulation at the heart of the UK that the sovereignty zealots find intolerable.  On this apparently esoteric topic depends much of the future character of the relationships between the UK and Europe,  the different parts of the UK, and in Ireland  north and south.

State Aid is the stumbling block but the EU allows for state aid. UK and EU negotiators are to meet in two weeks to thrash out the level of customs checks required under the Irish protocol, on goods and produce moving between Britain and Northern Ireland. The joint committee will also try to agree on whether export declarations are needed for Northern Irish firms sending goods into the UK and what constitutes a state subsidy under the agreement.

A senior source said that if a satisfactory agreement could be reached then it would not be necessary to make good the threat to give ministers the power to override the agreement. “The expectation is that we will be able at the joint committee to resolve these questions,” they said. “We hope against hope that we never need to go there. And if it is the case that an agreement was secured at the joint committee then we would not need to exercise those powers. We could drop them from the bill.”

 The question is whether the bad blood of the past five days will make compromise harder.

Sources insist that Boris Johnson’s decision to deploy the “nuclear” option was the result of EU provocation over exports of British meat. This could have stopped Britain sending some foods to Northern Ireland, which the government could not countenance.

And so a strategy, discussed for months, was deployed by which the UK would threaten to legislate to let ministers override the withdrawal agreement.

Whitehall knew the move was incendiary. The issue was not helped when the plan leaked.

There is still irritation in Brussels and, more importantly, Dublin, where perceptions have been reinforced that Mr Johnson cannot be trusted.

If the EU agrees to ease the passage of goods GB to NI within the next fortnight, he will promise not to self harm by removing the breaches of international law Boring old details to be worked out in the joint committee. To say the least, the contrast in negotiating styles is stark. But is Johnson’s offer a runner?

RTE’s Tony Connelly muses over the prospects

The British government has always loathed what it signed up to. Boris Johnson and others lost no time in denying the Protocol’s implications, to the exasperation of the partners with whom he had just signed the treaty.

What this week’s Internal Market Bill does (and what the Finance Bill is expected to do) is neuter the things London hates: tariffs applying to goods moving from Great Britain to Northern Ireland, exit summary declarations for goods moving from Northern Ireland to GB, and the application of EU state aid rules.

There are other obligations London hates: the chore of building EU Border Control Posts (BCPs) at Northern ports to carry out checks on live animals, animal-derived products, and food coming in from GB.

Brussels is now waiting to see if the Agriculture Bill will try to swot aside those obligations as well. Already the BBC has reported that Northern Ireland’s Agriculture Minister Edwin Poots wants to suspend work on BCPs because the Internal Market Bill means all bets are off.

From the word go, the UK portrayed the Joint Committee as a place where they could keep negotiating the Protocol. London said it aimed “to negotiate with the European Union additional flexibilities and sensible practical measures across all aspects of the Protocol…” (according to the New Decade, New Approach paper which enabled the restoration of the Assembly).

Not so, said the EU. The Joint Committee is there to implement what has already been negotiated.

The Joint Committee (and its specialised subcommittee) did have discretion to look for flexibilities so long as they were compatible with the legal framework. Indeed, workstreams were under way to look at, for example, how consignments for supermarkets could be handled, and what might be done to ease the burden of exit summary declarations. 

One element of the Protocol which is not within the remit of the Joint Committee is state aid…

.Despite the lack of media attention, in reality state aid was a very hot potato from the start. The EU made it clear that, if Northern Ireland was to remain within the orbit of the single market then EU state aid rules would apply, and they would have a reach-across effect on the rest of the UK…

According to sources closely involved throughout that period, nothing was hidden, and Boris Johnson and his team were fully cognisant of all the state aid implications (and, indeed, the details around tariffs and exit summary declarations).

So why did Downing Street detonate the Protocol at the most sensitive point of the future relationship negotiations? Why too did Johnson decide to use the most toxic issue that had bedevilled the divorce (Ireland) and is still bedevilling the future relationship (state aid)? “

Number 10 seems to have belatedly realised that holding out for full independence on state aid in any EU trade deal would be hugely undermined by the ‘oven ready deal’ Boris Johnson signed last October,”  said Paul McGrade, a former Foreign Office and European Commission official and a senior counsel at Lexington consultancy.

Another theory is that London is deliberately using the Protocol as a wedge to open up the entire state aid issue in the hope that they can hammer out a last-minute grand bargain: delete the state aid reach-across, and even some other Protocol irritations, and we can discuss what you’re proposing on the broader state aid relationship.

“If there’s no agreement on state aid,” mused one EU official close to the negotiations, “it might be a too-clever-by-half strategy.

“You tell the chief negotiator, look, we will deny it if you discuss it any further, but do you think there is a case for having a single state aid system [for the EU and UK] which is wider, but which means we overwrite the state aid element of the Withdrawal Agreement?”

It seems implausible, not least because trust lies at the heart of the EU’s negotiating position. The UK approach has been “trust us”, not just on state aid but on many of the key future relationship topics, like food safety, animal health, data protection and so on.

By throwing out far-reaching parts of the Protocol without warning, the bar for the EU to trust the UK has been placed dizzyingly high.

On the other hand whatever the logic, the degree of  “ reach across” to GB , potentially affected any company that does  business in NI, is excessive. An agreement might be reached   pragmatically.  If the UK agree not to dump say cars with old tech into the EU but would agree to share new tech with the EU that stumbling block could be removed.

The Time and RTE agree on one thing; trust is more vital than ever.

Extracts from Boris Johnson’s Daily Telegraph article making his case follow

Let’s make the EU take their threats off the table and pass this Bill

By Boris Johnson

“…Our partners know that, whatever happens, the UK is their friend, their biggest single export market and committed forever to the peace and security of the European continent. They know that there are ways in which we want to continue and even deepen our relations, not just in trade. 

Our negotiators believe that there may be a serious misunderstanding about the terms of the Withdrawal Agreement that we reached last October. 

You may remember those days. They were torrid. We were negotiating with one hand tied behind our back, since Parliament had voted to deprive the UK side of the right to walk away. We had a deadline of October 31 – which Parliament decided to flout. MPs were in a state of constant turmoil and recrimination. And yet, provided it was applied in good faith, the Withdrawal Agreement we reached was extremely good.

We excised the baleful presence of the Northern Ireland “backstop”, which effectively kept this country locked in the EU’s legal orbit, forced to accept EU laws, unable to do free trade deals. We made sure that Northern Ireland was explicitly recognised as part of the customs territory of the United Kingdom, and able to take part fully in new free trade agreements (such as the one Liz Truss has just done with Japan). And we also took steps to protect free movement at the all-important border between Northern Ireland and Ireland. 

We agreed that, in some limited ways, Northern Ireland would continue to conform with EU law for four years. We agreed that this limited alignment would end, unless the Northern Irish assembly voted to continue it. We agreed to do some light-touch checks on goods arriving in Northern Ireland, in case they should go on to Ireland, in order to avoid checks at the North-South border. 

And on the basis of that excellent deal we left the EU – and so it is deeply regrettable that what seemed so simple and clear to us is seen very differently by our EU friends.

We decided in the Withdrawal Agreement to create a Joint Committee, in which we would thrash out the details of these new arrangements. It is here that things risk coming unstuck. We are now hearing that, unless we agree to the EU’s terms, the EU will use an extreme interpretation of the Northern Ireland protocol to impose a full-scale trade border down the Irish Sea. 

We are being told that the EU will not only impose tariffs on goods moving from Great Britain to Northern Ireland, but that they might actually stop the transport of food products from GB to NI.

I have to say that we never seriously believed that the EU would be willing to use a treaty, negotiated in good faith, to blockade one part of the UK, to cut it off, or that they would actually threaten to destroy the economic and territorial integrity of the UK. This was for the very good reason that any such barrier, any such tariffs or division, would be completely contrary to the letter and the spirit of the Good Friday Agreement. 

By actively undermining the Union of our country, such an interpretation would seriously endanger peace and stability in Northern Ireland. This interpretation cannot have been the real intention of those who framed the protocol (it certainly wasn’t ours) – and it is therefore vital that we close that option down.

We want an agreement in the Joint Committee on how we can implement the protocol. We have consistently shown that we are willing to help our friends – to the extent that is possible and reasonable – to protect the integrity of their Single Market and to keep a fluid North-South border.

But we cannot leave the theoretical power to carve up our country – to divide it – in the hands of an international organisation. We have to protect the UK from that disaster, and that is why we have devised a legal safety net – in the UK Internal Market Bill – to clarify the position and to sort out the inconsistencies. 

This Bill protects jobs and growth across the UK by preventing barriers to trade between the nations and regions. It means that anything approved for sale in Scotland or Wales must be good for sale in England or Northern Ireland, and vice-versa.

The Bill gives freedoms and certainties for businesses and citizens that were previously set out in EU law. That is why, as we now come out of the EU, it is absolutely vital. It is now also clear that we need this Bill to protect the free flow of goods and services between NI and the rest of the UK, and to make sense of that commitment in the EU withdrawal agreement – that NI is part of the UK customs territory. It is therefore crucial for peace, and for the Union itself. We must get this Bill through.

So I say to my fellow parliamentarians that we cannot go back to the dark days of last year – the squabbling that so undermined our negotiators. If we fail to pass this Bill, or if we weaken its protections, then we will in fact reduce the chances of getting that Canada-style deal.

As it happens, I believe that this country will prosper mightily in either event. We could do very well indeed if we left on Australian terms. But there is no doubt that, in the short term at least, the Canada deal would be better and smoother – and that is what we are pitching for. 

So let’s end any potential for misunderstanding. Let’s remove this danger to the very fabric of the United Kingdom. Let’s make the EU take their threats off the table. And let’s get this Bill through, back up our negotiators and protect our country”