The Irish backstop was part of Theresa May’s Brexit deal for the Irish border. It would come into effect if no other solutions to maintain the current open border were agreed on once the UK left the EU. The nature of the Irish border post-Brexit has been a significant sticking point in negotiations between the British government and the European Union. Both sides agree that whatever the outcomes of Brexit, they must avoid checks along the Irish border.
Both the UK and the EU agreed on the need for a backstop to ensure no hard border-physical checks and evident border returns to Ireland. However, when Boris Johnson became prime minister in July 2019, he managed to prevent the need for a backstop by agreeing on permanent new relations between Northern Ireland and the EU. This new relationship means Northern Ireland is treated differently from Great Britain and follows EU rules in some areas.
The Northern Irish backstop provides for a broad UK customs partnership with the EU. There are provisions for a level playing field between the EU and UK about various matters, such as state aid to industry, competition employment, and environmental standards.
The Irish backstop is designed to ensure there are no hard borders between Northern Ireland and the Republic of Ireland, whatever the outcome of future trade talks between the UK and the EU. The EU has insisted that the Irish backstop must be part of any Brexit deal that would involve the UK maintaining close relations with the bloc for an indefinite period.
It will apply if the UK disagrees on a final deal at the end of the transition period or if it does not guarantee a soft border. It would not apply if Britain leaves without a deal.
Why Does it Matter?
There is a broad consensus in the UK and the EU that the Irish border must remain as open as possible, amid fears Brexit could reignite tensions behind “the Troubles”- a 30-year conflict over Northern Ireland’s status as part of the UK.
What do the UK and EU disagree over?
Under the protocol, a ban on the sale of certain products will come into effect if the UK and the EU cannot agree on new regulatory standards on some products after the grace period ends. In March, the UK unilaterally extended the period for supermarket goods for another six months, triggering legal action by the EU. The grace period for chilled meat products, such as sausages, was extended at the end of June to 30 September and then again without an end date to provide the time and space for a lasting solution to be found.
Without an agreement, chilled meat from Great Britain will not be allowed to go on sale in Northern Ireland after the grace period as it is not from the EU, which has its strict standards on food products. The EU has said the UK could align with its animal health and food safety rules to remove the need for 80% of the current Irish Sea customs checks. But the UK rejected this, saying it would tie Britain’s hands in trade negotiations with other countries. The UK has also accused the EU of failing to engage with its proposals, especially with the issues people are facing in Northern Ireland.
Why Might the Backstop Be Needed?
At present, goods and services are traded between the two jurisdictions with few restrictions. This is because the UK and Ireland are part of the EU’s single market and customs union, so products do not need to be inspected for customs or standards.
But after Brexit, all that could change; the two parts of Ireland could be in different customs zones and regulatory regimes, which could mean products will have to be checked at the border.
The preference of both sides is to prevent this from happening with a deep and comprehensive trade deal.
However, the UK’s ambition to leave the customs union and single market could make that very difficult. And if both sides cannot reach an agreement on keeping the border as open as it is now, that is where the backstop would come in.
The Direct Impact of Northern Ireland’s (NI) Economic Performances and Results
Economic modelling carried out by the Department estimates there could be between 10,000 and 23,000 fewer jobs here depending on the nature of future trade relations established between the UK and EU. There are significant risks to the NI economy related to the import of agri-food products from Britain. The report also demonstrates that the Irish backstop could impact NI’s competitiveness and ability to export to British and EU markets.
The sectors most negatively affected by the NIP are agriculture and the food and drink industry, with these sectors losing approximately 6% and 7% in GVA respectively, as well as 3,000 jobs between them. The overall look at NIP shows the level of job losses over the long term.
A Northern Ireland-Only Backstop
The EU originally proposed it would allow Northern Ireland alone to remain in the EU’s single market and customs union, leaving Great Britain (England, Scotland, and Wales) free to strike trade deals. But the DUP – a unionist party in Northern Ireland that propped up Theresa May’s minority Conservation government – objected to this. It said it would see Northern Ireland treated differently and could threaten the union.
How Does Northern Ireland Work?
Initially, the Irish backstop required Northern Ireland to be closely aligned with EU customs laws to remove the need for a physical infrastructure on the Irish border post-Brexit. The version of the Withdrawal Agreement signed by Theresa May in November 2018 expanded the deal to cover the whole of the UK at the insistence of the Democratic Unionist Party (DUP).
The DUP, which had propped up May’s Conservative minority, strongly objected to the possibility of the virtual border between Northern Ireland and the rest of the UK.
What Does the Protocol Entail?
London and Brussels essentially agreed to move the new regulatory and customs processes to the Irish Sea to avoid disrupting trade along the politically sensitive border. This meant checks on trade between Britain and Northern Ireland, rather than on goods moving north and south within the island of Ireland.
Since 31 December 2020, a range of regulatory animal and plant safety checks have been in operation, including physical inspections for a proportion of freight arriving at ports in Northern Ireland. Customs declarations are also required for incoming commercial goods.
While the rest of the UK has left the bloc, Northern Ireland has remained in the EU single market and applies EU customs rules at its ports, even though it is still part of the British customs. The protocol also sees Northern Ireland follow specific EU rules on state aid and VAT.
Who Is Unhappy About the Protocol and Why?
Businesses that move goods from GB to NI have been saddled with added costs and reams of new red tape.
Many traders have encountered problems shipping goods across the Irish Sea. In the early weeks of 2021, this was witnessed with depleted supermarket shelves in Northern Ireland. Politically, Unionists and Loyalists are furious as they believe the arrangements have driven a wedge between the North and the rest of the UK.
They want the British prime minister, Boris Johnson, to trigger Article 16 to unilaterally suspend aspects of the protocol’s operation and enter fresh negotiations with the EU.
What Is Article 16?
Article 16 is an emergency mechanism within the Irish backstop. It allows the EU or UK to act unilaterally if either side considers the protocol to be causing “economic, social or environmental difficulties.” They could then introduce safeguard measures which must be notified to the other party “Without delay” through the joint committee.
Britain’s Demands for the NI Protocol Are Audacious and Sure to Be Rejected
Britain’s demand that the European Union rewrite parts of the withdrawal agreement they signed last year is dramatic, audacious and sure to be rejected. But it may not have been the most significant element of Brexit minister David Frost’s statement on Wednesday outlining his government’s new approach to the Irish backstop.
Frost called for a standstill period during which current arrangements, including grace periods postponing some checks on goods, would be frozen and said the EU should pause its legal proceedings against Britain for earlier breaches of the agreement.
The three elements of Britain’s proposal eliminating most checks and certification requirements on goods made in Great Britain, introducing a dual regulation system for goods circulation in Northern Ireland, and removing the enforcement role of European courts, appear to require changes to the text of the protocol. British officials know that the EU will not agree to remove from its institutions an oversight role over what is effectively the running of the European single market. But Boris Johnson creates much of the friction caused by the protocol by not agreeing to arrangements such as a Swiss-style veterinary agreement that would require Britain to align dynamically with EU rules.
Brussels-London Clash over Northern Ireland Protocol
The EU is set to scrap a raft of post-Brexit checks on goods entering Northern Ireland in the NI protocol in an attempt to step away from the fractious relationship that has been ongoing with London. However, a new claim by a former top aide to the PM that the UK always intended to ditch the deal has caused a firestorm of controversy.
It should be quicker and easier for goods to pass in and out of Ireland under new proposals being touted by Brussels in fresh talks about the future of the NI protocol. A move, the UK says it will “constructively” engage. The Irish backstop has caused particular tensions on the ground, even threatening the fragile peace in the region.
The new round of negotiations has not been helped after Dominic Cummings, one-time chief adviser to the British PM, revealed that Boris Johnson fully understood the agreement he had signed. A move analysts argue is typical of the PM.
Conclusion
The introduction of the Northern Ireland backstop will be a significant shock to the NI economy, irrespective of what future trade relations are established between the UK and the EU. This is because applying the EU customs code at NI ports will inevitably lead to increased costs for firms importing from Britain in the form of customs declarations, phytosanitary certificates, and increased checks and surveillance.
The economic adjustments that will follow the introduction of the new arrangements:
- Will ultimately affect competitiveness in business and reduce economic output
- Increase costs for consumers
- Lead to less investment, especially by UK firms that are only willing to operate on an All-UK basis; this will be partially offset by increased investment from the ROW.
- Reorganize supply chains: the extent to which this will happen will depend on the viability of those supply chains and the availability of product substitutes.
- Increase domestic production: increasing the price of imports from Britain may make local firms more competitive on the domestic market.
- Reduce exports and external sales: businesses will be less competitive if intermediate inputs sourced from Britain or elsewhere become more expensive.
