Richard North, 23/07/2021  

Just for once, HMG is breaking the mould. It is actually coming up some ideas of its own, instead of waiting for the Commission to produce a plan. These are to be found in the Command Paper, framed in terms of "aspirations".

These "aspirations" fall short of "the alternative and more innovative solutions" previously set out during the original negotiations. The government regards them as a "compromise model" as to how things might work, "using the broad contours of the current Protocol".

Taken at face value, it means that the government has abandoned its plans – if it ever had any – of "ripping up" the Protocol. It certainly does not amount, as the Guardian alleges, to dumping it and calling for a "rewrite".

A particular area where the government wants to see change is in provisions for trade in goods, and in particular those goods brought in from Great Britain for which the final destination is Northern Ireland.

As it stands, the default position is that goods coming from the mainland are treated as being "at risk" of subsequently being moved into the Union (via the Irish border), and are subject to customs procedures as they enter Northern Ireland. The only exceptions are for goods which satisfy certain criteria, mostly to be determined by the Joint Committee – which has yet to meet on this issue.

In a fundamental change, HMG wants a system where any UK trader moving goods to Northern Ireland is required to declare whether the final destination of those goods is Northern Ireland or Ireland. Then, full customs formalities would only be required for goods going to Ireland and the UK would undertake to enforce them. Other goods would not require any customs processes.

To make this system work, all such traders would have to agree to complete transparency of their supply chains to enforcement authorities, and to openness of their shipments to controls or checks on a risk-based and intelligence-led basis.

The system would also apply to tariff burdens for traders bringing goods from the rest of the world into Northern Ireland that remain in the UK's customs territory, and would be available to businesses and individuals moving consignments in post or parcels (with no requirement for declarations or tariffs on any consignments destined for Northern Ireland consumers).

This "light touch" procedure would doubtless be popular with UK and NI traders, but one can immediately see some problems with it. For instance, while an NI traders may genuinely believe that goods sold within the province will stay there, their customers may have different ideas, buying their goods with the specific intention of taking them over the Irish border.

This is in the context of cross-border smuggling being a way of life for certain communities on both sides of the border, a practice which enforcement agencies have barely been able to dent. Arguably, it would be extremely difficult to prevent an amount of leakage under this new regime.

What will probably also alarm the Commission is that the UK government also wants this same "light touch" procedure to apply to SPS goods (other than live animals).

Thus, there would be no need for certificates and checks for individual items that are only ever intended to be consumed in Northern Ireland. The full SPS requirements of EU law would be applied for goods going to Ireland and the UK would undertake to enforce them.

Additional confidence in these arrangements, the government then says, could if necessary be provided by an appropriately designed SPS agreement, setting out where UK and EU SPS legislation provided for the same high standards, and providing a means to identify areas of significant difference where the level of risk-based controls might need to be higher.

Bearing in mind that there is no meeting of minds as to what constitutes an "appropriately designed SPS agreement", one can imagine that this would provide little consolation to EU officials.

Nevertheless, the UK government does concede that arrangements of this nature "involve risk to both sides": that goods made to UK rules move onto the EU market, and that goods made to EU rules move to the market in Great Britain.

HMG, however, believes that the risk is "manageable and acceptable", given existing strong market surveillance. It is ready to agree stronger arrangements for enforcement, including clearer rules for product labelling, extensive reciprocal data-sharing arrangements with the EU and Ireland, enhanced forums for cooperating on market surveillance and calibrating it to specific levels of risk, and awareness work with traders.

The government is also ready to put in place legislation to provide for penalties for UK traders seeking to place non-compliant goods on the EU market.

And this is not all. As well as the movement of goods, the government is seeking other changes, not least to the installation of a full dual regulatory regime in Northern Ireland. Goods, whether manufactured or SPS goods, should be able to circulate within Northern Ireland if they meet either UK or EU rules, as determined by UK or EU regulators, and should be labelled accordingly.

Of course, says the government, goods destined or produced for the EU Single Market would need to meet EU rules in full. But goods exported from Great Britain via Northern Ireland to Ireland or beyond would, under the new arrangements, need to meet full normal EU customs processes.

Possibly, though, the most egregious of all the proposed changes concern the governance of the protocol, and the institutional arrangements. Without going into detail, the UK government is proposing major changes, "making the UK and EU into a partnership of equals, both with a strong and direct interest in operating the Protocol effectively".

One can see quite why Ursula von der Leyen rebuffed Johnson's urging "seriously" to consider the proposals.

After a telephone discussion with Johnson, von der Leyen said the EU would "continue to be creative and flexible within the Protocol framework. But we will not renegotiate", thereby closing the door to immediate talks.

As I pointed out yesterday, therefore, this leaves Johnson with only one option if he is serious in seeking changes to the Protocol. He must, in due course, invoke the Article 16 safeguard measures.

Although the very idea of invoking safeguard measures brings the bedwetters out in force, this is a valid action, fully within the framework of the Protocol. It does not involve any breach of international law, as long as the UK keeps to the prescribed procedures.

Any "imbalance" created by such a move does permit the Union to "take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance", but these should be seen as remedies, rather than retaliation, as they are supposed to address the perceived imbalance.

The real problems, it seems to me, will come if the issues which give rise to the safeguard measures adopted by the UK are not resolved. This will leave parts of the Protocol effectively suspended, which is not a situation the EU will be able to tolerate. It will have to look for a long-term solution.

However, if Johnson or Frost think they have offered a "compromise" solution which will eventually be accepted by the EU, they are probably going to be disappointed. While there are areas where the EU could reasonably be asked to relax its controls, these are not to be found in the Command Paper.

At best, therefore, Johnson's initiative is a lost opportunity. At worst, it is the opening salvo in a prolonged war of attrition.

Also published on Turbulent Times.

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