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The Irish Protocol: Versailles for slow learners - by Dr Graham Gudgin for Briefings for Britain

The Irish Protocol: Versailles for slow learners

Written by Dr Graham Gudgin for Briefings for Britain 14/11/2021

Some of you may have seen a version of this article on the Spiked website this week. For those who did not, we thought it worth repeating here the argument that the Northern Ireland Protocol was agreed by the UK government at a time of extreme political division and national weakness. There is a strong argument that it should be fundamentally renegotiated.

The most dramatic result from a poll last week organised by Queens University Belfast came in the question on trust. Close to half of respondents said they would trust the EU or the Irish Government. Only 1% said they had strong trust in HMG. We can take this as essentially zero and it includes almost all unionists.

A degree of unionist distrust of their own government is never far beneath the surface for good historical reasons but the proximate cause of the current total evaporation of trust is of course Boris Johnson’s promises. In 2018 he told the annual conference of the DUP that he would oppose abandoning NI within the EU’s orbit because ‘it would leave NI behind as an economic colony of the EU and would be damaging to the fabric of the Union with regulatory checks and even customs controls between GB and NI.’ Since that is almost exactly what Johnson then agreed on the Protocol in October 2019, a sense of betrayal was inevitable.

The most obvious reason for the UK Government’s current threat to dismantle the most damaging aspects of the Protocol by invoking its Article 16 is that Boris Johnson wants to redeem his 2018 promise, both to remove the taint of betrayal and to keep the Union intact. Taking this considerable political risk is largely a matter of personal reputation. There are few votes in it for the Tories. Few electors in the red wall seats will care whether the Protocol lives or dies. All UK voters will however care though if the Article 16 move goes badly wrong and impacts on their living standards.

Some say that Johnson may relish the prospect of EU membership topping the list of issues at the next election, just as it did triumphantly in 2019, but there is a clear risk in how this might play. Already the knives are out with the accusation that untrustworthy Johnson is reneging on a deal he signed only two years ago. The UK will lose all trust across the globe pontificates the FT. It is perhaps unlikely that the world will care much about this obscure trade spat but a furious reaction from the EU and from sections of the British media can be guaranteed. For their own internal reasons the USA will also wilfully misinterpret the Good Friday Agreement and will oppose any attempt to invoke article 16.

The Protocol represented a spectacular coup for the EU, negotiated at a time of almost unprecedentedly damaging division in UK politics. Unsurprisingly, although unwisely, Brussels exploited its advantage to the hilt. It uniquely moved its external customs border to within the boundaries of a neighbouring sovereign state. This minimised disadvantage to itself while maximising the discomfort of the UK and of Ulster unionists. In this sense the Protocol mimics the Versailles treaty at the end of WW1 when the allies (at the behest of the French) imposed extreme peace terms on Germany that Keynes and others correctly warned would ruin the German economy and undermine its democracy.

The Protocol has already undermined democracy in Northern Ireland, led to violence and distorted trade, all things which the EU said must be avoided. At the same time after almost a year of only partial operation there is little obvious damage to the EU’s Single Market. There is now a good argument that the Protocol has been an unnecessarily damaging hammer-blow to crack a rather small nut and must be fundamentally reformed.

The UK’s position, described in July’s Command Paper, is to remove all customs declarations and checks on goods from GB destined to remain in Northern Ireland. Firms in NI would also be allowed to operate under UK regulations unless exporting to the EU. The integrity of the UK’s internal market would thus be largely restored, and the proposed removal of ECJ jurisdiction would make the remaining arrangements more like a normal trade agreement. The UK’s strong preference is to achieve these aims through negotiation and this approach has borne some fruit in the recent EU non-papers.

These EU papers offer to widen the scope of goods ‘not at risk’ of entering the EU and hence not requiring customs checks. The claim is that this will remove 80% of checks, although the EU papers themselves give little indication of how these figures might be realised in practice. The prospect of amicable agreement is still not impossible but as far we know the EU proposals fail to meet the aims of the July Command Paper. As a result, the UK has been making steady legislative and statistical progress in building a basis for invoking Article 16. Its recently announced intention to recruit high level external legal advice appears to have spooked the EU, which now takes the UK threat seriously.

Although the mood in the negotiations is said to have brightened, at present it still seems unlikely that the EU will respond to the full UK ambition to restore national sovereignty in its own territory. Nor does it seem to recognise UK determination to tough out any retaliation from the EU. This makes the invoking of Article 16 more likely than not. The EU response is ‘escalation dominance’, involving counter-threats of retaliation perhaps going as far as cancelling the TCA free trade agreement. Such measures as limiting the access of British fishing boats in EU waters or removing preferential tariffs would however invite obvious UK counter-measures and hence the EU threats carry limited credibility.

The EU is in a sense stuck. Legalistic responses to UK action will be too slow, but a trade war will be self-defeating and will not bring the Brits to heel. Brussels cannot claim that invoking article 16 is illegal but it is likely to deny that the scale of the problems of social disruption or distortion of trade justify the UK actions taken under Article 16. The Protocol says that actions should be temporary and proportionate, but also says that EU retaliation must also be proportionate to the damage suffered by the Single Market. Such damage appears thus far be minimal.

The EU will strongly resist any appearance of rewriting the Protocol, something it has repeatedly said it will not do, but needs to get some sort of settlement so that it can focus on more pressing problems further east. The irony is that Ireland now intends that fuel imports into Ireland across the land border are to be checked for concordance with EU standards. This involves precisely the type of border checks that the entire Protocol is designed to avoid. The time has clearly come for a new and more sensible approach to the border problem involving what is called mutual enforcement with each side trusted to protect the other’s internal market through legal and administrative devices. We are some way off that at present but the sooner the lessons of Versailles are learned, and a balanced solution is adopted, the better it will be for us all.

Dr Graham Gudgin Economist, Centre for Business Research, Judge Business School University of Cambridge was Special Advisor to the First Minister in Northern Ireland 1998-2002. His chapter on Discrimination in Housing in Northern Ireland is published in the Idea of the Union edited by J W Foster and W B Smith and published by Belcouver Press in 2021.

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The Irish Protocol - Versailles for slow learners - by Dr Graham Gudgin 14.11.21
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