The authoritative source for independent research on UK-EU relations

14 Jan 2020

Relationship with the EU

Union

NDNA

Introduction 

The New Decade, New Approach (NDNA) agreement was announced by the Irish and British governments on 9 January 2020 and endorsed by all the main political parties in Northern Ireland (NI) on 10 January.

It is significant not only because it paved the way for the restoration of the Northern Ireland devolved institutions (beginning with the Assembly and Executive on 11 January), but also because it comes at a momentous time for the future of the region.

The Withdrawal Agreement that is being given domestic effect in the UK through the European Union (Withdrawal Agreement) Bill is enormously consequential for Northern Ireland.

The Protocol on Ireland/Northern Ireland contained in the Withdrawal Agreement is an important and potentially dynamic document in that it sets key parameters for Northern Ireland’s ongoing relationship with the EU.

This is no mere tokenism; the relationship will be substantive, with Northern Ireland set to follow EU regulations on goods and the Union Customs Code.

Therefore, what the NDNA document contains in terms of enabling Northern Ireland to manage this relationship is critically important.

In and of itself, it is a major step forward in that it sees devolved government re-established in time to represent Northern Ireland’s interests in what is a period of serious change for the United Kingdom itself, as well as its international relationships.

This brief paper considers the ways in which the NDNA prepares the ground in Northern Ireland for managing Brexit.

Setting Northern Ireland priorities and interests

An executive priority

Brexit is of such importance and significance that it is set as the top priority for any incoming NI executive when it comes to the programme for government.

The recognition of the ‘potential for widespread and significant implications across all aspects of social and economic life’ in Northern Ireland arising from Brexit means that, according to NDNA, the first priority for the executive ‘must be to ensure the best possible outcome’ from Brexit for Northern Ireland, specifically citizens and the economy [paragraph 4.6.8].

The priorities for Northern Ireland are said to reflect those set out by the letter from the First Minister and deputy First Minister to Theresa May in August 2016.

These are noted below [with added comments recognising that the Withdrawal Agreement Protocol frames these in a very different context to that in which they were first drawn]:

For the Irish land border not to become an impediment to the movement of people, goods and services. [The Protocol only addresses this in relation to goods]

That businesses, both indigenous and foreign, ‘retain their competitiveness and do not incur additional costs’. [The Protocol means that there is a chance that such costs and risks now come in relation to trade and business activity with Great Britain as well as the EU, including Ireland]

That nothing affects the cost and supply of energy in Northern Ireland. [The Single Electricity Market on the island of Ireland is addressed in the Protocol, but it does need monitoring]

An ability to draw down EU funding [The Protocol Preamble notes ‘the Union’s and the United Kingdom’s commitments to the North South PEACE and INTERREG funding programmes under the current multi-annual financial framework and to the maintaining of the current funding proportions for the future programme’].

The agri-food sector (including fisheries) and its vulnerability to tariffs and non-tariff barriers. [The Protocol sees Northern Ireland follow EU regulations in relation to agri-food and retain existing access to the EU market; some of the implications of the Protocol, particularly in relation to agricultural subsidies and fisheries, are still to be worked out in the transition period]

Having reminded the Northern Ireland executive of these priorities, the NDNA document states that the details of what the executive does in this regard would have to be published within two weeks of the restoration of the devolved institutions [see ‘Annex D – Programme for Government’].

Brexit sub-committee

The Northern Ireland executive is to have a sub-committee on Brexit. This will be chaired by the First Minister and deputy First Minister with representatives from all parties in the executive taking part [paragraph 3.5]. It does mean that if a party chooses to go into opposition, as this NDNA document allows for, it loses its seat on the sub-committee.

The sub-committee will ‘consider Brexit-related issues’ as ‘a matter of urgency’, so we would expect it to be established as a priority by the incoming executive.

Its first role is to initiate ‘an assessment of the impact of Brexit’ on the institutions and relationships along the three strands of the 1998 Agreement: devolved, north/south and east/west.

This is to happen ‘as soon as is practicable’,and the wording gives room for excuses not to do this quickly; however, the fact that all Northern Ireland parties were behind an amendment (NC55) in the House of Commons on the Withdrawal Agreement Bill that specifically requested impact assessments on the implementation of the Protocol, we can expect that there will be support for movement on this from across the executive.

The work of the sub-committee will be scrutinised by the assembly, although how this happens is yet to be determined. This is potentially a good means of putting the work and findings of the sub-committee on the wider public record.

Representing Northern Ireland in decisions that directly affect it

Three interdependent layers of UK international negotiations

What happens within the UK’s internal market (specifically in the movement of goods from Great Britain into Northern Ireland) is now contingent on international negotiations between the UK and both the EU and other partners.

Therefore, what the UK government is able to commit to Northern Ireland at this stage is of immense significance, especially when it comes to the devolved region having a ‘voice’ in the negotiations.

There are three layers of international negotiation in which the UK will be engaging in the coming years that Northern Ireland will be affected by.

The first is the implementation of the Protocol, which is a legally-binding agreement that gives Northern Ireland a very unique position within the UK and vis-à-vis the EU. Indeed, it gives it a unique international position too, and the region’s unique status as provided for in the Protocol will have to be accepted by the World Trade Organisation, possibly citing Article 21 of GATT, which refers to an exemption from usual rules on the grounds of an exceptional security situation.

There are a lot of ‘known unknowns’ in the Protocol, some of which can only be determined as the future UK-EU trade relationship is agreed – such as which goods will be subject to tariffs (in the worst case scenario), and regulatory and other checks and controls across the Irish Sea border.

We can expect the EU to be strict on the enforcement of such controls because now the edge of its single market for goods and its customs territory becomes an internal boundary of a non-member state.

Although it is a sea border (and thus easier to police than an open land border), it is nonetheless one that will be traversed if smugglers think it is a weak spot for entry into either the EU or GB markets.

The second element of negotiation is the future UK-EU relationship. This will determine what controls will be placed on movement across the Irish Sea (see above) from/to both Northern Ireland and the Republic of Ireland. In turn, this will affect movement across the Irish land border.

The third layer of negotiation is that of the UK’s trade deals with other countries, such as the USA. What the UK agrees in those negotiations will affect the controls that the EU will require on the movement of goods across the Irish Sea into its single market and customs territory and, thus, the experience/impact of Brexit for Northern Ireland businesses and consumers.

Input from Northern Ireland in the implementation of the Protocol

A substantial feature of the NDNA document comes in the form of the UK government’s commitment to ‘ensure that representatives from the Northern Ireland executive are invited to be part of the UK delegation’ in meetings of two crucial bodies.

First, they can attend the UK-EU Joint Committee, which is a ministerial level decision-making body charged with the implementation of the Withdrawal Agreement as a whole. Secondly, representatives from the executive (presumably officials from the NI Civil Service given the nature of the body), can also attend the Specialised Committee on Ireland/Northern Ireland – a body composed of officials overseeing the operation of the Protocol [Annex A:9].

Such attendance may be seen as a bare minimum in terms of direct representation from Northern Ireland on bodies that will be so significant in overseeing and monitoring the implementation of the Protocol.

Invitations from the UK government to NI executive representatives to attend such meetings will occur only in instances where (i) the committee concerned is discussing Northern Ireland-specific matters and (ii) the meetings are ‘also attended by the Irish government as part of the European Union’s delegation’.

This is, presumably, on the grounds that it reflects the logic of the north/south bodies operating on the island of Ireland (particularly the North/South Ministerial Council), which gives the NI executive a unique capacity (as a regional-level devolved administration) to operate and make decisions at an ‘international’ level.

It is notable that the NDNA makes no mention of how Northern Ireland’s voice will feature in the work of the third UK-EU body established to support the implementation of the Protocol, namely the Joint Consultative Working Group (JCWG).

This contains the most potential for Northern Ireland’s direct input (including from stakeholders) into the discussions, monitoring and decisions around the implementation of the protocol. For that reason, deciding on its preferences for the operation of the JCWG and input to it from NI ought to be a priority of the executive.

The government also commits to ‘engage in detail’ with the executive on ‘measures to protect and strengthen the UK internal market’ [Annex A:10]. What this looks like in practice – especially bearing in mind that the language of strengthening the UK internal market will sit uncomfortably with some – and how the engagement will be carried out are yet to be determined.

Finally on this, the government promises to ‘engage specifically with the executive on the unique circumstances of Northern Ireland and the Protocol’ [Annex A:12] but there is no detail on this.

Input from Northern Ireland in the future UK-EU negotiations and other free-trade agreements

The UK government states that it would ‘welcome close engagement with a restored executive on Northern Ireland’s priorities in the next phase [of Brexit]’ [Annex A:8].

Whilst recognising that Northern Ireland will be affected by the UK negotiations with the EU and other partners (which are of course beyond the competence of devolved administration), this is an extremely weak commitment and provides no indication of the institutional form engagement will take.

Effective consultation is necessary given the importance of the future UK-EU relationship and the UK’s relations with other partners for the future of the protocol and its implications for Northern Ireland, and especially its position in the UK internal market.

Of interest to Scotland and Wales in particular is the fact that the UK government here commits to consulting ‘other devolved administrations’ alongside the NI executive, on ‘our wider trade policy’ [Annex A:11].

Addressing the consequences of Brexit

Protecting the UK internal market

In an historic and noteworthy move, the business community and all main parties in Northern Ireland have supported amendments to the Withdrawal Agreement (WA) Bill. Some of the issues they raised as common concerns about the immediate economic implications of the WA and Protocol are reflected in the commitments of the UK government set out in NDNA (pp.47-48).

The government states in the NDNA agreement that it is ‘absolutely committed to ensuring that Northern Ireland remains an integral part of the UK internal market, in line with the clear guarantee in the Protocol that Northern Ireland remains in the customs territory of the United Kingdom’ [Annex A:10].

Whilst the protocol is indeed clear that Northern Ireland is part of the UK’s customs territory, in practice (given that the EU Customs Code will be implemented in the region), there will be new frictions and complexities introduced to the UK internal market that were not there before.

Other amendments to the WA Bill supported by NI business and parties are those that provide legally binding detail to the protocol’s guarantee of ‘unfettered access’ from the region into Great Britain after Brexit.

NI businesses are looking to be able to continue to sell their goods to the rest of the UK without tariffs, origin requirements, regulatory controls, dual authorisations or discrimination in the market. The NDNA commits the government to legislate for this and to ensure that it is in force by 1 January 2021 – the end of the transition period. The meaning of ‘unfettered’ is still to be determined.

This framework will potentially come through the use of Statutory Instruments accompanying the WA Bill in the coming months. How these will be drafted and how they might be approved or even shaped by Northern Ireland stakeholders and elected representatives is as yet unknown.

Preparing for new trade arrangements

The UK government also commits to ensuring a new deal for Northern Ireland ‘maximising trade opportunities and investment’. This new deal was referred to in the cover letter from the Prime Minster to President Juncker on 2 October 2019, in which he proposed a new protocol on Northern Ireland, and it was also mentioned again in the Prime Minister’s statement to the Commons the following day. That promise was made in part as a reassurance to unionists in Northern Ireland.

The stated purpose (in those documents) of such a ‘new deal’ is to support Northern Ireland’s transition through Brexit, by boosting economic growth and competitiveness, and ‘set[ting] in train new infrastructure, particularly with a cross-border focus’.

No detail of this is included in the NDNA (even though it could potentially match the Irish government’s commitments to such infrastructure in Annex B).

Waiting until towards the end of the transition period to flesh out such a deal makes sense in terms of being able to respond to and mitigate some of the consequences of what actually is decided in terms of the Protocol detail and the UK-EU relationship.

There is a risk that it could be waylaid by other priorities – especially if the UK government is unable to dedicate much ‘bandwidth’ to Northern Ireland concerns as the negotiations go on. This should therefore remain on the radar of the executive’s Brexit sub-committee at the very least.

The government also commits to ‘examining funding options to support preparedness for entering new trading arrangements with the EU and support for business. This is a fairly loose-sounding commitment compared to others, and businesses overall want ‘a hand up not a hand out’.

Seeking additional flexibility from the EU

The government also commits to negotiating with the EU ‘additional flexibilities and sensible practical measures across all aspects of the protocol’.

This picks up on the language that we have long seen in the negotiations over the place of Northern Ireland in the Brexit settlement – what the EU referred to as ‘flexible and imaginative solutions’.

However, there is a risk that this will be seen as the UK pushing for stretch from the EU when it comes to the UK implementing in respect of Northern Ireland its obligations under the protocol. This is particularly because this paragraph notes that these measures are to ‘maximise the free flow of trade’.

This is disappointing in two respects. The first is that the EU will be alert to the UK wanting the EU to turn a blind eye to trade risks when it comes to Northern Ireland.

The reality is that it is not in the EU’s interest to reduce frictions on the Irish Sea border – that is an internal UK concern – if it increases risks to the integrity of its own internal market and customs territory. There are also clear expectations in the EU that the UK will meet its obligations in full.

The second point is that this quest for flexibilities from the EU is framed only in relation to trade.

There is a huge amount of the protocol that reflects the unique position of Northern Ireland (rights protections, north/south cooperation, single electricity market, common travel area) that the UK government could be pushing for flexibility from the EU on that would be in the interests of Northern Ireland, and yet these are not even nodded towards in this NDNA.

Considering cross-border dimensions

The north/south dimensions of Brexit are only really considered in light of the Irish government’s commitments to the NDNA (Annex B). And, for the most part, this is primarily a statement of what it is already in the process of doing.

The Irish government mentions a range of Brexit-related mitigations and measures that it has initiated but, understandably, these are all for businesses/consumers in the jurisdiction of the Irish State, except when it comes to the ‘Brexit vouchers’ of InterTrade Ireland, a north/south implementation body.

This a restatement of existing practice rather than a promise of new measures, but at least it means that they can be built into Northern Ireland planning without delay.

In line with its National Development Plan, the Irish government promises to ‘update and enhance’ its commitment to jointly funding cross-border investment. This refers to joint funding with the UK government but there is no wider reference to that in the document.

In a different type of cross-border initiative, there is a plan to develop north/south parliamentary relations by establishing a working group of representatives of the North/South Interparliamentary Association – something which has not been able to meet since the collapse of Stormont.

Other initiatives with potential

On east/west measures, Annex B mentions the ongoing work of the British-Irish Council Secretariat and considering options for its role in light of Brexit, which is the only reference to the relevance of Strand 3 institutions in the NDNA, although it was mentioned in manifestos by a range of NI political parties.

One of the original features of the NDNA is the value it places on civic engagement. A Citizens Assembly per year [3.9], plus 1-2 issues per year to be considered via ‘civic engagement’ opens the potential for wider engagement on Brexit-related matters.

The NDNA goes even further on this point to state that ‘co-design and co-production’ must underpin the development of the Programme for Government.

The measures outlined under ‘Strengthening the Economy’ [Annex A] include some initiatives that work to build closer communication between UK government departments/agencies and Northern Ireland ones, with a view to better international representation for the region. This could have potential (e.g. trade ambassadors) for helping find opportunities for NI into the future.

What is missing

Overall, the NDNA document provides the very basic building blocks for Northern Ireland’s devolved institutions to manage Brexit.

However, it does not go very far in positioning Northern Ireland for the serious challenges (and potential opportunities) that lie ahead.

There is no consideration of the potential that the ‘special circumstances of Northern Ireland and the protocol’ provide for the development of Northern Ireland’s relationship with the EU, e.g. in relation to research funding, frontier workers, vis-à-vis the EU. In this regard, a broader understanding of the opportunities that Northern Ireland could exploit through its unique position would be useful for the executive.

As mentioned above, the protocol is really only considered in terms of trade, not in terms of its relevance to individual rights or north/south cooperation.

Even then, there is no mention of the all-island economy or capacity to build that economy, despite the fact that this could be a prime area for growth for Northern Ireland’s economy in the medium term.

This caution may be due to political sensitivities when trying to get NDNA over the negotiating line; but we can only hope it is not continued into practice and policymaking from the new executive, especially given the cross-border dimension of its stated priorities (as per the August 2016 letter, see above) and the cross-border dimensions of the protocol itself.

Indeed, there is no detail in the NDNA on north/south bodies, even though they will be able to make recommendations into the Specialised Committee, and thus have potential to shape top-down policy when it comes to the impact that Brexit has on Northern Ireland, and what it might mean for longer term development.

They can also serve as valuable means of information exchange between representatives of an EU member state and those from a non-member state which has significant obligations towards the EU in respect of part of its territory.

Also notable is that there is no mention at all of the democratic consent mechanism that was such a critical addition to the protocol in mid-October and on which the UK issued a unilateral declaration.

Not all parties are happy with it, but it is worth remembering that (according to the current timetable) MLAs are expected be voting on whether to continue to apply Articles 5-10 of the protocol (i.e. to retain alignment with the EU on market/customs rules) before the end of 2024 and the executive will be responsible for a consultation exercise before then.

Conclusion

The fact that the business community managed to get NI political parties to find consensus when it came to concerns about the Withdrawal Agreement Bill is actually very significant, as a number of these concerns are reflected in this document.

This shows the impact that such cooperation has, and the value of stakeholder input and engagement. How this might be sustained in the context of restored devolved government should be explored.

Now that the devolved institutions are up and running, they have two weeks to publish the programme for government.

This does not leave much time to explore all the potential for strengthening Northern Ireland representation and capacity when it comes to managing the implications of the protocol and the future UK-EU relationship.

The principles of consultation, civic engagement and consensus-building that are contained in the document hold some potential.

Seeing these in light of the truly multilevel nature of the governance of Northern Ireland would be a crucial way of making sure that Northern Ireland is ready for the Brexit-related challenges and, potential opportunities, of the new decade.

By Dr Katy Hayward, senior fellow of The UK in a Changing Europe and reader in Sociology, and David Phinnemore, professor of European politics, both Queen’s University Belfast.

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