Straws in the Protocol wind

From  the FT

Rishi Sunak, chancellor of the exchequer, warned that provoking the EU into a trade dispute in the row over the so-called Northern Ireland protocol would hardly help. “Empty shelves this Christmas would be a disaster,” says one senior British official. “Nobody wants to be the person who screws up Christmas.” Rather than force a confrontation with Brussels, Johnson ordered his chief negotiator, Lord David Frost, to return to the table with renewed vigour to try to resolve the post-Brexit dispute over Northern Ireland. UK government insiders said the meeting marked a significant shift in approach.

From Bloomberg

Britain’s debate about whether to walk away from post-Brexit commitments with the European Union over Northern Ireland risks unsettling an already sputtering economic recovery.

With the government in London threatening to invoke Article 16 of the Northern Ireland protocol, which governs trade in the region, economists warn that retaliatory measures from Brussels could hit exports and investments and deliver a further blow to the pound.

“Clients weren’t interested in Brexit until last week, but now it’s back to square one — they’re worried,” said Fabrice Montagne, the chief U.K. economist at Barclays Plc…  A broad-based repudiation, with Britain “tearing up the Northern Ireland Protocol,” could prompt a quick 5% drop in sterling, Derek Halpenny, MUFG’s head of European global markets research, told Bloomberg Television.

Tony Connelly RTE

The EU is proposing that a 50% cut in customs formalities on goods moving from Britain to Northern Ireland become a legal obligation, RTÉ News understands.EU negotiators want the offer to be legally enshrined in a formal co-decision with the UK in order to remove any doubt that the offer to cut customs formalities is meaningful.The UK’s chief negotiator David Frost has so far dismissed the EU’s offer to cut formalities by 50%, arguing that it would not represent a significant cut in the process of moving goods between Great Britain and Northern Ireland…

An EU proposal to make custom cuts a legal obligation would help alleviate UK scepticism, Minister for Foreign Affairs Simon Coveney has said.  Speaking in the Dáil, Minister Coveney said he believed UK negotiators were unsure as to whether the EU’s offer to cut customs formalities was genuine, as he expressed hope that the change of tone in negotiations would continue.

But Frost asked last week.. 50% of what?

Here are details on which Frost is asking for more movement from the EU.

For example, they do not eliminate a single customs declaration for any good moving into Northern Ireland. The famous 50% figure is actually a 50% reduction in the number of fields in the customs declaration, with most of the significant ones still remaining—it is not a 50% elimination of process. On medicines, we still do not have a situation that deals with the reality of the fact that the regulator in Northern Ireland is not the MHRA but the EMA, so there is clearly a risk of divergence and not being able to deliver medicines to the whole country—and we have to deal with that. So they make progress, but they do not take us the whole way there.

 

Archie Norman, chair of Marks and Spencer, said in a letter to UK Brexit minister Lord David Frost, seen by the Financial Times, that the offer from Brussels “could result in worsening friction and cost and a high level of ambiguity and scope for dispute”.

Norman said the labelling requirement would add £9m in extra costs annually for the 90m products M&S ships to Northern Ireland from the mainland. The letter also warned that under the EU proposals, a vet would still have to certify 95 per cent of the food it sends across the Irish Sea to prove it complied, adding “a minimum of four hours per day” to transit times. Along with other checks, that would result in fresh goods taking 45 hours longer to get to stores than when the UK was an EU member, Norman said. He added that as a result M&S might have to stop sending some product lines to Northern Ireland. “Detailed examination suggests to us that the proposals could end up being more costly to implement than full EU customs controls,” Norman said. Instead he called for a “risk-based regime” with limited checks on goods that would make extensive use of digital technology.

Norman was a Tory front bench opposition spokesman in a brief political career from 1997.