Brexit, transition and Northern Ireland

transition

The Conservative majority means that the withdrawal agreement should now have a relatively smooth passage through Parliament. The European Parliament will then give its consent and the parliamentary hurdles to the UK’s withdrawal from the EU will have been completed.

Withdrawal is set for 2300 UK time on Friday 31 January 2020. The UK then enters its Brexit ‘transition’ period.

Much of the discussion about transition has focused on whether, given Johnson’s categorical refusal to countenance an extension to the transition period, the eleven months until 31 December 2020 will provide enough time for the UK and the EU to negotiate, conclude and ratify an agreement on their future relationship, particularly regarding trade.

Less attention has been paid to economically important and politically sensitive decisions required by the protocol on Ireland/Northern Ireland. These need to be taken by the UK-EU Joint Committee before the protocol is set formally and fully to enter into force on 1 January 2021.

There are four sets of decisions.

A first concerns customs and the free movement of goods, particularly regarding the conditions under which goods from the rest of the UK can enter Northern Ireland after transition.

This involves determining which goods entering Northern Ireland from non-EU countries and Great Britain are ‘at risk’ of being moved on into the EU market. Such goods will be subject to applicable EU tariffs, quotas and other controls.

The extent of these will be heavily determined by the nature and scope of the UK-EU trade relationship to be negotiated during transition and the extent to which the UK commits to a regulatory ‘level-playing field’ with the EU.

In determining the ‘at risk’ goods, the UK and the EU must also agree levels of admissible ‘commercial processing’ in Northern Ireland. This is no easy task.

The UK and the EU must consider the final destination and use of each good, its nature and value, the nature of the movement, and the potential for smuggling.

There is also the question of what exemptions there will be for personal baggage and items of ‘negligible value’, and how any EU customs duties levied on goods moving into Northern Ireland from the rest of the UK can be reimbursed. The latter is a matter for the UK government to determine.

More generally, the Joint Committee in reaching its decisions shall have ‘due regard’ to the (undefined) ‘specific circumstances in Northern Ireland’.

Whether this means the EU will be open to some flexibility in implementing the Union Customs Code and some derogations is far from certain.

Precedent-setting is a concern, as is the capacity of UK authorities to control what goods are entering the UK given past cases of customs fraud.

Moreover, from an EU perspective, flexibility has already been shown in agreeing Northern Ireland retaining existing goods access to the EU market.

A second set of decisions concerns fish. The issue is the conditions under which fish and ‘other aquaculture products’ can enter the EU’s customs territory, which for the purposes of the Protocol includes Northern Ireland.

At question here is not fish and other aquaculture products from the rest of the UK or third countries but those ‘brought into’ the EU customs territory by ‘vessels flying the flag of the United Kingdom and having their port of registration in Northern Ireland’.

In other words, the Joint Committee must decide, in the absence of a comprehensive UK-EU agreement on fish, which fish and other aquaculture products landed in Northern Ireland by vessels registered in Northern Ireland are to be exempt from EU customs duties after transition.

Third, the Joint Committee must agree the level of permissible agricultural subsidies the UK can make available to producers in Northern Ireland.

The decision is to be informed by the design of the UK’s agricultural support system as well as annual average expenditure on such support in Northern Ireland during 2014-2020.

Such levels of subsidies need to be agreed if products from Northern Ireland are to be able traded freely into the EU market. In the absence of a decision, EU state aid rules will be applied to agricultural support measures in Northern Ireland.

A fourth set of decisions relates to the implementation of the protocol in the UK and the ‘practical working arrangements’ for EU officials in that process. Formally, responsibility for implementation rests with the UK government.

However, EU representatives have the right to ‘be present during any of the activities’ UK authorities undertake to apply the provisions of EU law required by the protocol and the protocol’s customs and other provisions regarding the free movement of goods.

Also, the UK authorities are required to provide the EU representatives ‘upon request’ all relevant information relating to its activities; they must also carry out ‘control measures’ when requested by the EU representatives.

The UK-EU Joint Committee taking the above decisions will comprise EU and UK representatives with either a member of the European Commission and a UK minister attending or ‘high-level officials designated to act as their alternates’.

Meetings will be held at least annually as well as at the request of either party. Decisions will be taken by mutual consent meaning both the UK and the EU can veto.

The composition of the UK delegation to meetings is to be decided by the UK government.

The option exists, albeit not referenced in the protocol, for ministers from the Northern Ireland Executive, when functioning, to accompany the UK minister. Senior officials from the Northern Ireland Civil Service could accompany their UK counterparts.

Making recommendations to the Joint Committee will be a UK-EU ‘Specialised Committee’.

It will be examining issues raised by the UK-EU ‘Joint Consultative Working Group’. Its purpose is to ‘serve as a forum for the exchange of information and mutual consultation’.

In addition, the Specialised Committee can receive proposals from the North-South Implementation bodies set up under the 1998 Agreement as well as the North-South Ministerial Council (although it can only meet if a Northern Ireland Executive is in place).

There is clearly important work to be carried out during 2020 to ensure the effective implementation of the protocol. In addition to the four sets of decisions above, the transition period also requires the UK government on its own to act to fulfil obligations.

This is particularly so regarding post-transition implementation of the protocol’s arrangements for VAT and excise where EU rules are to apply ‘to and in the United Kingdom in respect of Northern Ireland’.

There are similar obligations regarding EU state aid rules.

Preparatory work will also need to be done so that commitments regarding technical regulations, assessments, registrations, certificates, approvals and authorisations can met from when the protocol comes fully into force.

Serious doubts exist as to whether there is enough time to do this.

The transition period will be dominated by the negotiations on the future UK-EU relationship. And these will have implications for the implementation and effects of the protocol on Ireland/Northern Ireland.

However, irrespective of what progress is made in the negotiations, the UK government and the EU have before them some challenging decisions that need to be taken during 2020 before the protocol can come into force.

By David Phinnemore, professor of European politics, Queen’s University Belfast.

Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.

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