Yves here. I am behind in providing an update on the state of Brexit, now that the UK has officially gotten stroppy over the Northern Ireland protocol and the EU has formulated some fixes. But this openDemocracy piece provides a good overview of the issues in play, especially the UK’s belief that it holds a trump card in its threat to trigger an Article 16 dispute. Regular readers will note that the UK, true to form, is overplaying its hand.
By George Peretz, a queen’s counsel in England and Wales and barrister-at-law in Ireland. His practice covers a wide range of public law, regulatory and tax issues, with particular strengths in competition and state aid, pharmaceuticals, VAT and customs/trade remedies, and agriculture. He has argued a number of major cases in the Supreme Court, Court of Appeal, European Court of Justice and General Court and regularly leads in the senior English courts. Views expressed in openDemocracy are his own, not those of his chambers. Originally published at openDemocracy
The UK government and the EU are in a stand-off over the Northern Ireland protocol. David Frost, the British minister for EU relations, has threatened to invoke Article 16 of the protocol, which allows either side to take safeguarding measures in response to “serious economic, societal or environmental difficulties or diversion of trade”. But Article 16 is not the ‘get out of jail free’ card that it is frequently said to be.
The British side has two sorts of problems with the Ireland/Northern Ireland Protocol (to give it its proper name): some are practical, and people in Northern Ireland are feeling them directly; some are more abstruse and haven’t actually caused any difficulties yet. Most of the practical problems can be solved within the terms of the protocol. In contrast, solving the abstruse problems would require it to be rewritten – which just won’t happen.
Sausages and Pet Passports
Among the practical problems are issues of customs and regulatory checks and controls. These flow from the fact that the protocol applies the regulations of the EU single market to goods sold in Northern Ireland and also applies both those rules and EU customs rules to goods coming into Northern Ireland from Great Britain.
One important exception to that principle is that goods from Great Britain that are intended to stay or be consumed in Northern Ireland are not subject to tariffs: a joint committee of EU and UK representatives decides precisely what goods benefit from that exception. But even those goods are subject to customs and regulatory checks when they arrive in Northern Ireland.
Those regulatory and customs checks have caused problems, particularly for food and animals – sausages and pet passports – as well as for medicines approved for use in Great Britain or exported to Northern Ireland by pharmaceutical companies based in Great Britain. These problems have been very visible to business and ordinary citizens in Northern Ireland.
The Northern Ireland protocol does not need to be rewritten, nor Article 16 invoked, to solve these practical problems. In most cases, EU legislation can be tweaked as it applies to Northern Ireland, and the proposals that the European Commission published on Wednesday indicate that this is now very much a possibility (for example, reducing or removing customs or regulatory checks even where EU law would otherwise require them to be carried out at the EU border).
Brexiter Shibboleth
Not so for the abstruse concerns. These include, in particular, state aid and the role of the European Court of Justice (ECJ). Tweaks alone will not satisfy the British government’s wishes here. It is hard to see, however, that any real difficulties have yet arisen in these areas.
The issue of state aid is, at its heart, not about Northern Ireland at all: it is about a point that, it appears, the current government failed to spot when it agreed to the protocol but was obvious to any lawyer who knew anything about such matters. Article 10 of the protocol applies EU state aid law to any UK measure that could have an effect on Northern Ireland/EU trade in goods, and so EU law applies to a whole range of UK-wide subsidies, even ones that apply primarily to Great Britain or are limited to Northern Ireland. This is a phenomenon known as ‘reach-back’, and it could certainly lead to conflict in time.
As yet, however, no case has emerged where reach-back matters. And if EU state aid law were found to apply to a UK measure that was politically sensitive, the European Commission might well be able to resolve the problem by using its wide powers to authorise state aid.
The British government fluffed its obvious chance to renegotiate Article 10 when it was agreeing on subsidy control provisions as part of the negotiations for the EU-UK Trade and Cooperation Agreement (TCA): it could, at that stage, have asked for changes to Article 10 to reflect its agreement to those provisions, but appears not to have raised the matter.
As for the ECJ, its role at the top of the pyramid of enforcement of EU law as it applies to Northern Ireland was crystal clear under the protocol (it’s in Article 12) and the British government made no complaint about it before the command paper it published in July. No case from Northern Ireland has arisen before the court and none is on its way to doing so. But the ECJ is an old shibboleth of dogmatic Brexiters, who regard complete freedom from its jurisdiction as totemic.
There is no easy solution to the abstruse problems. Removing the ECJ would require a wholesale rewrite of the protocol, and even a change to the state aid rules in Article 10 would require some rewriting.
To put it mildly, there is little appetite in the EU for such a rewrite now, given the processes that would need to be gone through, and the general perception, enhanced by the current government’s misconceived attempts to breach the EU-UK withdrawal agreement in the Internal Market Bill last year and by some carefully timed tweets by the former top aide to Boris Johnson, Dominic Cummings, that it always intended to ‘cheat foreigners’ by wriggling out of the protocol as soon as it felt it could get away with it.
‘Clash with Judges’
And what of Article 16? Sadly for the British government, while the practical problems could be the basis of action under that famous ‘safeguards’ provision, the abstruse problems that it has now raised cannot.
Article 16 is not a ‘rewrite the protocol as you feel like’ provision. Rather, it allows either side to take “appropriate” measures, restricted in scope and duration to what is “strictly necessary”, to address “serious economic, societal or environmental difficulties that are likely to persist” or “diversion of trade”.
Those terms are fluffy, and no court is likely to want to start arguing the questions of what is appropriate and what are serious societal difficulties with elected politicians (as long as they have at least some basis for their claims). But the terms are not infinitely flexible, and it would be hard plausibly to extend them to the abstruse problems: what “serious economic [or] societal difficulties” or “diversion of trade” are currently being caused by Article 10 or the role of the ECJ?.
Moreover, the boundaries of these terms are policed not only by the international mechanisms in the withdrawal agreement and the Northern Ireland protocol contained within it, but also by the domestic British courts: the protocol is part of UK law under Section 7A of the EU Withdrawal Act 2018, inserted by the current government only last year.
For that reason, if the government were to rely on Article 16 to cut down the role of the ECJ or limit the effect of Article 10, it would, as a recent lead article in The Sunday Telegraph put it, lead to a “clash with judges”. The only way of avoiding that clash would be to pass a law that allows breaches of the protocol – but such legislation would then set up a “clash with the House of Lords”, given the huge majorities by which that house rejected the equivalent Internal Market Bill provisions. It would also, if passed, be a clear breach of the withdrawal agreement that would allow the EU to take retaliatory action.
Nuclear Option
Any sustainable Article 16 action will therefore need to focus on the practical problems rather than the abstruse ones. But a further difficulty arises: given the Commission’s offer of flexibility on those problems, how far could it be “appropriate” to use Article 16 measures when negotiation can (at least potentially) deal with those problems?
The government, therefore, has little choice but to chase down the extent to which the Commission’s proposals will resolve the current difficulties. It is only when it can mount a plausible case that these proposals cannot realistically be expected to resolve these difficulties that it could lawfully use Article 16.
6 comments
Comments are closed.
The EU got a lot of criticism from some sides for apparently ‘giving too much away’ in the face of Johnson and Frosts bluster – some UK newspapers even hailed them as a huge victory. But in reality it seems to have been a combination of calling the UK’s bluff (not exactly a difficult thing to do), while also clearing the way politically for precise and tough trade restrictions if the UK does invoke it. So far, it seems to have worked, as this was supposed to be the week Frost would call for it, but things seem to have gone quiet. But ultimately, this has nothing to do with NI, or trade, or anything else – its all to do with Johnsons back room deals with the Brexit Ultras. The EU is of course aware of this, which is why it does not want to get involved in haggling.
One side issue is that this issue has driven a major wedge within Northern Ireland Unionism. The DUP still sees this as a political issue and is pushing for Article 16 to be invoked. They are only interested in the political objective of keeping the Republic out of their affairs. But a significant chunk of Unionism, the less idiological side, is quite happy with how things are going and is perfectly well aware of the possible economic impacts of rocking the boat.
Agreed. I thought the EU response was quite clever, not least because, at least in principle, it can resolve all the touch-feely regulatory problems that get into the media. ECJ jurisdiction is quite another issue : how could even the Daily Mail make much of that, I wonder? The EU have also, wittingly or unwittingly, given Johnson quite a lot of ammunition against the Brexit ultras. They can no longer pretend that they have any other objective than destroying the NI Protocol, and that they are acting in bad faith after helping to push Johnson into the agreement he signed. But it’s not clear that the majority of the Tory Party, still less of the country, is willing to die in this rather technical ditch.
Right now, the UK is running around trying to sign itself up for a bunch of free trade deals to replace what they lost when they exited the EU. But other nations have seen how the UK is telling the EU that yes, they signed a negotiated agreement with them to do with Northern Ireland but they never meant to follow through so now it is time to re-do that part of the agreement. So perhaps it would be wise for those other countries to put in penalty clauses so that the UK cannot also renege on those free trade deals that they are signing. I am not blaming the UK here but actually the Boris regime in place I should clarify. If they are not careful, they will get a reputation of being agreement-incapable as well.
The prize here (NI) is the composition of Stormont at the next elections, because its composition will determine the continuation vote for the Protocol. In my opinion, Brussels has been very clever in dealing with all the major practical concerns that have been raised.
The Unionists have then looked very silly (not difficult for them) in banging on about the need to maintain some mythical emotional links with GB, which in reality has always been happy to sell NI down the river.
Frostie (aka Lord Frost) does not want to resolve matters as it is in the interests of the Conservative Party to maintain high levels of conflict with those dastardly Europeans to prove the necessity and correctness of Brexit.
But at least here we have turkeys in the shops and petrol in the petrol stations, unless of course the politicians insist we share the misery of those across the Irish Sea.
Do we have an up to date list of all the ‘Ultras’? I wonder if they actually still have political clout now that the public can see how much Brexit was fantasy. I dream of some moderate Tories breaking ranks, calling time on the Ultras, inviting Boris to go and collect his Russian payoff early (surely he’d like to?) and wheeling Rory Stewart out the cupboard as new Leader for the ‘New Conservative’ party. Is it just me?
It’s basically a question of numbers. The idea that Johnson owes these people some kind of moral “debt” or that he has made promises he must keep, misunderstands the nature of politics and more importantly the nature of Johnson. He has a large majority, and will be able to win comfortably any vote on a subject which places him in opposition to the ultras. They can no longer threaten to bring the government down, and thus their position is becoming weaker all the time. To avoid party splits, Johnson will keep them onside as far as he can, but not at the cost of doing serious damage elsewhere.