Richard North, 27/02/2021  

In what could be a major development, RTÉ News is reporting that unnamed "senior EU figures" are contemplating a "major reset" in relations with the UK.

The trigger, apparently, is the appointment of David Frost, due to take over as the UK's relationship supremo on 1 March. Some pundits are expecting his role to be more about confrontation than co-operation, hence moves are being made to head off trouble at the pass.

RTÉ News suggests that senior EU officials fear among is that unless there is a clear reset, the relationship between the EU and the UK could become one of perpetual tension.

The idea being floated is a formal, set-piece event marking the TCA ratification, set for the end of April. This could be built round a "handshake" moment between Johnson and EU leaders, symbolising a new, more harmonious era in relations.

This would ideally coincide with both sides signing off on a package of solutions to the most contentious outstanding issues, especially the Northern Ireland Protocol and the London embassy issue.

In the interim, RTÉ News reports that both sides could work towards a package of solutions around the outstanding issues of the Irish Protocol, as well as other areas of tension, such as the status of the EU's delegation to the UK.

However, it is understood that only "very tentative discussions" have been broached, and then only between officials. Whether there is any political commitment to the idea cannot be said. But there would have to be hard negotiations in the coming weeks for anything to materialise.

From the outset, though, things do not look particularly promising. Northern Ireland's agriculture minister, Gordon Lyons, has ordered work to be halted on the construction of border control points, an end to charges levied at ports on traders bringing goods into North and a halt to further recruitment of inspection staff.

Predictably, the rival SDLP are not impressed. It is called for an emergency meeting of the Stormont Executive to address the "unilateral action" taken by the Minister.

Deputy First Minister, Michelle O’Neill, describes the move as a stunt. "The DUP cannot pick and choose which duties and obligations of Executive leadership it wants to adhere to", party leader, Colum Eastwood said. "This decision is controversial, cross cutting and cannot be put into effect without Executive agreement", Nichola Mallon, the Minister for Infrastructure, adds.

So much of this, then, seems typical Northern Irish politics, the old saw being that, if you thing you understand it, you haven't been listening. Clearly, there is no agreement as to what should be done, and no obvious way forward.

That the situation is unstable and, in the longer term, unsustainable, is highlighted by comments from Esmond Birnie, a senior economist at Ulster University's Business School.

He says that Brexit has "hamstrung" Northern Ireland, with its unfettered access to Great Britain reduced and a fix potentially months away as business waits on the UK government to supply accurate data.

"We've no official quarterly data for Northern Ireland, but we've Ulster Bank's purchasing index and case study evidence", Birnie says, on which basis he warns that costs in the province are rising "far more rapidly" than in the other three parts of the UK.

"This", Birnie adds, "is telling us that it is easier to trade with Europe, that prices for businesses in the region are increasing far more rapidly than for GB counterparts and that Brexit resulted in a reduction in our unfettered access to the UK, of which we are a part".

GB access, we are told, is pivotal for many businesses in Northern Ireland, which routinely import some £10.4 billion in goods, compared with £2.4 billion of imports through the Republic of Ireland.

Concerns are growing that Brexit will substantially reduce the quality of life in Northern Ireland, with Mr Birnie noting that food is one of the sectors worst affected by new border controls, and increased business costs will likely translate into higher consumer prices. "Margins for coping with higher grocery prices this side of the Irish Sea are much lower than for the other UK nations", he says.

And yet, confirming what we've known for some time – which seems to be the role of the BBC - there is evidence of a reorientation of trade on the island, which shows no sign of stabilising.

Nearly two months after the end of the transition period, the volume of freight being shipped across the Irish Sea from the Republic of Ireland to GB is still down significantly, with companies trying to avoid the complications and potential delays of using the landbridge.

While the number of weekly ferry crossings from Irish ports to France has risen sharply by 102 percent, with more likely to be added, in the week to 22 February, freight volumes on Stena Line ferries from the Republic of Ireland to GB were down 49 percent compared to the same week last year.

What we have yet to see, though, is the imposition of full border controls on goods from EU member states to the UK, which will not come into force until 1 July – or possibly even later. But what we might see then is a further development of the direct route from Ireland to the continent.

As horse owners are already finding, from Ireland, it is easier to travel to GB via Northern Ireland, EU exporters in future might find it easier to send goods to Ireland, using the land border into Northern Ireland as the back door into the UK. That might even see a revival of Holyhead's fortunes as shippers seek to avoid Calais-Dover and other more direct Channel routes.

It could even become the case that Northern Ireland develops into a manufacturing and distribution hub for the rest of the UK, as well as servicing operations in the Republic.

This, in itself, might explain some of the thinking behind the EU seeking its "reset", as reported by RTÉ. One alternative might be a return to the sort of political instability which gave rise to the Troubles, even if we don't see violence on the same scale.

But, as Pete points out, the UK is not entirely without leverage, should other scenarios emerge, not least of which is the possibility of us invoking the Article 16 safeguards.

With that, the UK has a stronger position than at might first appear. If London refuses to play ball, and implement rigorous checks on goods travelling from GB to Northern Ireland, the EU's options are to insist that the Republic sets up border checks on good from NI, or imposes border checks in Irish goods entering the rest of the EU.

Neither of those options would be welcomed by the EU, or the Irish Republic, with the risk of damaging its precious solidarity. If the EU is to keep Ireland on board, it actually needs to do a deal with London.

That leaves the possibility of a move towards Irish unity, but that is not going to happen any time soon – and one does wonder whether Dublin would want to take on the financial liabilities of supporting Northern Ireland.

All in all, as long as the London government holds its nerve, it might find it easier to reach a resolution than is generally thought. And, if that means transferring economic activity to Northern Ireland, that is no bad thing, It will be a happy day when one can say that Brexit has brought prosperity to the province.

Also published on Turbulent Times.

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