Wednesday, March 29, 2023

Rishi Sunak to announce ‘fundamental’ changes to N Ireland trade rules

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Rishi Sunak will on Monday claim he has negotiated “fundamental” changes to the post-Brexit trading regime in Northern Ireland, as he seeks to finally end a bitter row with Brussels on the issue.

The UK prime minister and Ursula von der Leyen, the European Commission president, are expected to seal the deal to reform the so-called Northern Ireland protocol at Windsor on Monday, the culmination of months of diplomacy.

Sunak will then begin the daunting task of selling the reforms to pro-Brexit Tory MPs and to Northern Ireland’s Democratic Unionist party, with a statement to parliament scheduled for Monday afternoon.

He has already begun selling the deal, with British officials claiming Sunak has secured “fundamental” reforms to the protocol, part of Boris Johnson’s 2019 Brexit deal.

They say the agreement will fix concerns over trade friction on goods travelling between Great Britain and Northern Ireland and what local politicians have called a “democratic deficit”, giving them a say over new EU rules in the region.

Two people with knowledge of the deal have said that the revised settlement, which runs to more than 100 pages, is an “implementation agreement” that sits above the existing text of the protocol.

Brussels will have to make some changes to existing EU law — as it did last year to resolve an issue over access to generic medicines for Northern Ireland — in order to give effect to the changes.

“It’s a fix that will allow the EU to say ‘we haven’t reopened the text of the deal’, but the UK can say ‘we’ve won material legal changes to the package’,” one insider said.

Among the expected changes is a derogation on pet passports that will enable UK residents to take their dogs to Northern Ireland without microchips and pet passports as if they were travelling to the EU, as currently required.

The EU is also expected to soften its stance in other areas of contention that make Northern Ireland residents feel their place in the UK’s internal market is being constrained — for example, around receiving parcels from Great Britain by post.

Another area that officials are confident will be resolved is a spat over steel quotas that led to HM Revenue & Customs warning UK producers last August that some steel products would be required to pay 25 per cent tariffs when shipped to Northern Ireland.

The UK decision to provide full data transparency to the EU, alongside building border control posts at Northern Irish ports, is expected to unlock a radical simplification of the processes needed for Great Britain traders to send products to Northern Ireland.

It is anticipated that those who register products via a trusted trader scheme and label products for consumption “NI-Only” will not be required to present full customs and animal-health certification at the border, although full details of the scheme have yet to emerge.

Taken together, the UK will say, the package represents a significant improvement in the functioning of the trade border that Johnson agreed in the Irish Sea as part of the original Northern Ireland protocol deal in 2019.

More problematic for Sunak may be convincing the DUP and hardline Brexiters in his own party that the deal addresses the constitutional issues thrown up by the protocol.

Officials conceded that the agreement would not remove EU law or European Court of Justice jurisdiction from Northern Ireland, which remains part of the single market for goods, as demanded by Brexit hardliners.

Insiders on both sides indicated that Brussels had not moved substantially on the role of the ECJ in enforcing the protocol, although the UK is expected to argue that the amount of EU law being enforced will effectively have been reduced.

Nor will the deal meet the DUP’s recent demand for a dual regulatory regime in the region, with producers able to choose to apply UK standards, rather than EU rules, for exports into the British market.

The protocol also requires the UK to refer subsidy or “state aid” decisions that might impact the Northern Ireland goods trade market to Brussels. The insiders indicated this would remain, but that only the largest decisions required referral.

The deal is also expected to include a system to significantly improve the level of consultation with the Northern Ireland assembly about new EU rules and regulations applying in the region in order to address concerns over a “democratic deficit” caused by the protocol.

However, the consultative mechanism, which is expected to be similar to the one enjoyed by Norway as part of its deal to implement EU single market legislation, will not amount to a veto.

Sunak hopes the deal will eventually persuade the DUP to rejoin the Stormont power-sharing executive, which it is boycotting in protest at the operation of the protocol.

But the prime minister is also targeting a much bigger prize of improved relations with the EU, including on scientific collaboration, and warmer ties with US president Joe Biden, who has expressed concerns about the stand-off over the Northern Ireland issue.



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