Bluff or confrontation is the looming choice, as pressures mount over the NI Protocol

Over the Protocol, somebody’s bluff will be called over the next few weeks.

But whose?

If he’s to be believed Jeffrey Donaldson has just announced that if the EU doesn’t concede the abolition of most inspections at the ports, the DUP will quit the Assembly. The immediate withdrawal of DUP ministers from north-south bodies except over Covid liaison is the warning shot across the bows. Donaldson’s threats deliberately coincide with the visit of EU vice president Maroš Šefčovič to address political parties and business representatives.

The ensuing election would rally a unionist majority to the DUP cause and restore their position as the leading party. How hard line in practice is Donaldson’s position?  First he focuses on the “problems” created by the Protocol, no longer on its very existence, suggesting he would settle for maximum easing of the terms. This is a useful if implicit fudge. But second, his threat will be greeted by a tsunami of scepticism, touched perhaps with a just a touch of concern about DUP self harm.

However in extreme form, Donaldson has drawn attention to the lack of a voice for Northern Ireland in the whole tortuous protocol system. We need to go  beyond blaming the DUP for helping  to create it in the first place. Maroš Šefčovič would do well to address it today in reply to business and political representatives.

Northern Ireland’s’ leading Brexit experts Katy Hayward and David Phinnemore  have fleshed out a rational system of NI consultation and involvement  within the structures of the protocol  to include politicians as well as civil society.

. A significant shortcoming of the governance arrangements for the protocol is the absence of formal interaction between the Joint Committee which takes decisions on the protocol and the MLAs who, with their democratic consent in 2024, hold much of the protocol’s continued application in their hands.

However there is no obvious mechanism here for a resolution of differences, much less a Northern Ireland veto.

The Northern Ireland Retail Consortium has said there is a “realisation” in the business community that changes need to be made to remove the friction around the protocol. Its director Aodhán Connolly said: “There are challenges and that is what we are going to be telling Maroš Šefčovič today”.

Speaking on RTÉ’s Morning Ireland, Mr Connolly said the UK wants something equivalent to a New Zealand-style agreement while the EU wants economic alignment. There cannot be regulation without representation.

“It is one of the key asks that we had back at the start of this. We asked for mitigation, compensation and representation and we still have to get that representation.”

He said there are ways of doing this by looking at other countries with close relationships with the EU, such as Norway, “rather than getting rid of the protocol… There are solutions…but he could not see the political will on both sides to deliver them.

In strict constitutional terms which Brexiteers are normally so fond of invoking,  the Protocol is a sovereign matter between the sovereign bodies. And here the gap seems as wide as ever, as Boris Johnson, made clear in PMQs yesterday, stuck on the idea of “mutual recognition” or “mutual enforcement”.

As RTE’s Tony Connelly has reported:

On 21 July the UK published its Command Paper, setting out what it sees as a necessary “rebalancing” of the Protocol.

The 22-page document amounts to a sweeping renegotiation: customs and agri-food checks and controls would only be necessary for goods entering Northern Ireland from GB that were clearly destined for the Republic of Ireland.

There would be a dual regulatory system so that goods produced in GB would be recognised in Northern Ireland (which remains part of the EU’s single market) and vice versa.

Medicines would be taken out of the Protocol completely, there would be no requirement for any information on goods entering GB from NI (except in extremely limited circumstances), and the European Court of Justice would no longer have any role in adjudicating on any issues that arose in relation to the application of EU law in Northern Ireland.

To the British this seem to be the only way out of the impasse the themselves have created,  through “ mutual recognition “of each other’s legal order, not UK subordination to the EU’s regulatory regime even for the special status of  NI. And they argue controversially this is compatible with the terms of the Protocol and Brexit withdrawal as a whole.

A sympathetic analysis has been made by David Collins, Professor of International Economic Law, City University of London

Mutual Enforcement entails that the UK and the EU each make a reciprocal legal commitment to enforce the rules of the other with respect to trade across the Irish border, removing all checks from Great Britain to Northern Ireland.

Crucially Mutual Enforcement does not remove customs duties, nor does it harmonise or require mutual recognition or alignment of standards. The obligation to comply with the importing territory’s rules and pay duties is placed on the exporter as a matter of law of the exporting territory. Consequently any border checks become redundant. No border on sea or land.

There is no significant market or distribution network for non-compliant goods and therefore no real profit in it for criminals to smuggle, not when compared to more lucrative contraband such as tobacco, alcohol, fuel, drugs and migrants. The real risk of leakage across the Irish border is rather small.

Fundamental mistrust of the UK is the most likely reason why the EU appears to have rejected Mutual Enforcement without seriously considering it. A plausible solution to this dilemma would be regular inspections / audits from each side coupled with enforcement of the Mutual Enforcement obligations through arbitration. More creatively, the parties might consider posting a bond to back up their commitment – if the UK put a hundred million euros in escrow from which the EU could extract compensation in the event of demonstrable smuggling, it might show that it intends to approach Mutual Enforcement in good faith. Of course the EU would need to reciprocate, offering a cash bond of its own.

At the moment the UK’s unilateral extension beyond 1st October of the grace period before implementing some checks buys more time for negotiations. But with British terms apparently stiffening, it looks like a British challenge to the EU to reply in terms which can only  put pressure on the open land border between NI and the Republic.  The UK government can point to Donaldson’s threat – although they will publicly deplore it – to urge the EU to settle on closer to British terms soon. Whether the EU will see it that way is extremely doubtful.  And Dublin will be ringing their hands, desperate for practical mitigation. Like all sensible people.