Home ›› 17 Oct 2021 ›› Opinion
It looks like it'll be Brexit for Christmas again.
Brussels recently vowed a major reduction in post-Brexit checks on goods moving between Great Britain and Northern Ireland — but rejected UK demands to negotiate a “new" protocol.
Semantics aside, the two are heading back to the negotiating table in an attempt to resolve long-standing differences over trade arrangements in Northern Ireland and, worryingly for Brexit watchers, they are aiming to come to an agreement by the end of the year, threatening to overshadow Christmas just as the Brexit trade deal did last year.
Northern Ireland has always been a Brexit sticking point. The protocol — designed to avoid a hard border between Northern Ireland and the Republic to the south — was agreed by both the EU and UK as part of the Brexit Withdrawal Agreement in 2019, but London has repeatedly argued that the negotiated solutions do not work and are causing political and economic disruption in Northern Ireland. Suggestions London might trigger Article 16 to suspend the protocol have triggered fears of a trade war, with EU officials warning that the bloc would react to such a move by launching legal action and the potential imposition of tariffs.
Neither side wants a trade war but the two remain far apart and somebody's red lines will need to turn pink to strike a compromise.
The day after UK Brexit minister David Frost ramped up the rhetoric in an EU-UK spat over trade frictions, warning that a failure to renegotiate the Northern Ireland protocol “would be a historic misjudgment,” the European Commission responded by releasing what it called a "robust package of creative, practical solutions" that it claims would make a renegotiation unnecessary.
In a document covering four areas, the Commission suggested reducing cumbersome custom checks on goods and easing safety checks on food products that enter Northern Ireland from Great Britain. The forecast by retail analysis firm Springboard adds to the bleak picture facing the sector in the key festive trading season, as consumers uncertain about what Brexit will mean for the economy and their finances cut back on gift-buying this year.
“We are not anticipating it will be a bumper week by any means,” said Diane Wehrle, insights director at Springboard. “Consumers are feeling nervous about what might happen in the new year, particularly around Brexit. So people are not prepared to splash out this Christmas and are reining back on spending.
“It’s not because people are spending online; they’re just not spending,” she added. “We’re all facing risks as rail fares and utility bills rise and we’re all aware of that.”
She said rising wages in recent months were little comfort for consumers who dipped into savings and took on extra debt during a prolonged period of below-inflation pay rises since the 2008 crisis.
Retailers battling it out to win customers in the final shopping days before Christmas are already offering big discounts, after a dreadful month in November that Sports Direct boss Mike Ashley described as “the worst on record, unbelievably bad”.
“No one could have budgeted for that,” Ashley told City analysts last week as he presented the sports retailer’s half-year results. “Retailers just cannot take that kind of November. It will literally smash them to pieces.”
The expectation that footfall will drop again in the week to Saturday 22 December follows a dire weekend for Britain’s high street, who were put off from venturing out by plummeting temperatures and freezing rain. On Saturday alone, footfall on high streets dropped by an estimated 9 per cent compared with the same time last year. It was down about 8 per cent if shopping centres and retail parks are included.
It also outlined moves to ease the export of medicines and increase the involvement of political, economic and civil society actors in Northern Ireland. The protocol has been deeply controversial with Northern Ireland's unionists, who see it as driving a wedge between Northern Ireland and the rest of the UK.
"Today’s package has the potential to make real, tangible difference on the ground," Commission Vice-President Maroš Šefčovič, the EU's point person on Brexit, told reporters in Brussels. "We have put a lot of hard work into this package" and at times even "went beyond EU law" to find solutions to trade frictions, Šefčovič added.
London, on the other hand, kept its powder dry in anticipation of negotiations to come. A UK spokesperson would only say the government was "studying the detail" and insisted it "will of course look at them seriously and constructively."
EU and UK officials will discuss the Commission’s proposals in London on Thursday and an EU official said Šefčovič and Frost “will definitely talk or meet in the coming days,” but London has not yet accepted a lunch invitation for Friday from the Commission’s vice-president.
The Commission’s proposals “are definitely enough” to start negotiations and include “massive improvements” to the key issue of food safety checks, the so-called sanitary and phytosanitary (SPS) controls, said Raoul Ruparel, a former Brexit adviser to ex-UK Prime Minister Theresa May.
However, the proposals don’t satisfy all of Britain’s demands, and he fears the EU might not have much further room for maneuver. The package is still “vague” on how customs paperwork would be reduced, and falls short on Britain’s expectations regarding the supply of medicines to Northern Ireland, Ruparel said.
The Commission’s response leaves three major UK asks unanswered: A demand to remove the oversight of the Court of Justice of the EU (CJEU) when it comes to EU law in Northern Ireland; a request to change state aid rules in the region; and allowing pets to move freely between Great Britain and Northern Ireland.
Business groups on both sides of the Irish Sea welcomed the Commission’s proposals and stressed the priority for business remains easing trade rather than the U.K.'s sought-after changes to the role of the CJEU.
The main group representing shipping companies and hauliers in Northern Ireland, Logistics UK, said the Commission had “listened” to their concerns and its proposals will make the Irish Sea border much more user-friendly for businesses reliant on the smooth delivery of goods from Great Britain.
“It’s a big positive breakthrough,” said Seamus Leheny, policy director at the lobby group. “From our members’ perspective, this solves a lot of the problems. Most importantly, it reduces administrative paperwork and costs.”
Aodhán Connolly, director of the Northern Ireland Retail Consortium, described the package as “ambitious” and said it contains “some wonderful things” which would “remove some of the friction” to trade across the Irish sea.
Connolly oversees the Northern Ireland Business Brexit Working Group, which has been in regular contact with the Commission and the UK government over how to solve the issues with the protocol. None of the companies he’s spoken to in these roles has ever raised the issue of oversight of the CJEU.
“We’re into containers and moving them, not courts or the arbitration method,” he said. “What we need is certainty, simplicity and affordability to keep our businesses competitive.”
Some longstanding critics of the protocol remained unimpressed by the Commission's proposals, however.
Northern Ireland's Democratic Unionist leader Jeffrey Donaldson said the plans “fall far short of the fundamental change needed.” He reiterated his intention to withdraw his party from the Northern Ireland power-sharing government, triggering its collapse, unless all checks on British goods arriving in the ports of Belfast and Larne were halted.
Donaldson’s moderate rival for pro-UK votes, Ulster Unionist leader Doug Beattie, welcomed the EU package as offering “very clear and pragmatic solutions.” But he warned that deadlock over the CJEU’s role could give Donaldson all the pretext he needs to create “a power vacuum” that could stir more dangerous rioting than was experienced in working-class Protestant parts of Northern Ireland in April.
politico
