The Northern Ireland Protocol Bill
The UK Trade and Business Commission has taken evidence on several occasions from a wide range of stakeholders on the Northern Ireland Protocol. This involved the Commission making a visit to Belfast in March 2022. In June 2022, the UK Government introduced a 'Northern Ireland Protocol Bill' proposing significant unilateral changes to existing agreements between the UK and EU.
This session of the UK Trade and Business Commission took evidence from experts on the Protocol about what the diplomatic, geopolitical, and economic consequences of the bill could mean for trade and businesses in Northern Ireland.
Stuart Anderson chaired the Session.
Witnesses
Panel 1: Political Implications (10.00am - 11.00am)
Professor Katy Hayward, Professor of Political Sociology, Queen’s University Belfast; Senior Fellow of UK in a Changing Europe.
Sir Peter Westmacott KCMG, LVO, Former UK Ambassador to the United States
Martijn de Grave, Special Adviser for the UK, Office of Vice President of the European Commission Maros Sefcovic
Panel 2: Implications and Trade/Business Barriers (11.00am - 12.00pm)
Anton Spisak, Policy Lead for Trade and Productivity, Tony Blair Institute.
Professor Catherine Barnard, Professor of European Union and Employment Law, University of Cambridge; Deputy Director of UK in a Changing Europe.
Frankie Devlin, Partner in Indirect Taxes - VAT & Customs, KPMG Ireland.
Post-Session Report
INTRODUCTION
In this session, the Commission took evidence on the political and legal implications of the Northern Ireland Protocol Bill. This Bill proposes to unilaterally reverse many of the provisions contained in Articles of the Northern Ireland Protocol that the UK jointly agreed with the EU just two years ago.
Witnesses provided evidence highlighting the effect the Bill is having on the UK’s international reputation, while also offering comment on how the Bill could have damaging economic consequences for Northern Ireland and Great Britain
SESSION WITNESSES
PROFESSOR KATY HAYWARD, Professor of Political Sociology Queen’s University Belfast
SIR PETER WESTMACOTT KCMG, LVO Former UK Ambassador to the United States
MARTIJN DE GRAVE, Special Adviser for the UK Office of Maroš Šefčovič
ANTON SPISAK, Senior Fellow Tony Blair Institute
PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
FRANKIE DEVLIN, Resident Partner KPMG
KEY RECOMMENDATIONS
1. The Northern Ireland Protocol Bill threatens the foundation of the UK’s Brexit agreement with the EU. Collapsing this agreement will increase prices for British people even more.
2. Unilaterally overriding the Northern Ireland Protocol will cause lasting damage to the UK’s international reputation, diplomatic efforts and damage the prospect of future trade deals.
3. UK threats to renege on the Brexit deal could be used by authoritarian states to justify their own breaking of international law.
4. The UK Government should focus on rebuilding trust with the EU, and reach a negotiated solution. This is not possible with the Northern Ireland Protocol Bill on the table.
5. A caretaker Government should not be pursuing a Bill of such consequence to the UK’s international standing and economy.
THE LEGALITY OF THE BILL
One of the biggest issues is regarding the legality of the Northern Ireland Protocol Bill. The Bill unilaterally reverses an international agreement that the UK freely entered into only two years ago.
The UK Government has attempted to justify this under the ‘Doctrine of Necessity’, a legal argument which posits that breaches of international agreements are justified if one party’s vital interests are at grave risk of being jeopardised.
The Commission’s witnesses examined this justification, largely concluding that the Bill constitutes a breach of international law and that the Doctrine of Necessity justification does not hold.
NECESSITY
The current situation with regards to the Northern Ireland Protocol does not meet the threshold of ‘necessity’ as required by the ‘Doctrine of Necessity’.
“This time round the Government has said it is not in breach of international law and they’re relying on Article 25 of the International Law Commission Articles on State Responsibility, and Article 25 is about necessity, and the UK Government says it’s necessary to have this Bill in order to deal with the problems on the ground in Northern Ireland which Katy Hayward has been discussing. The trouble is if you look at the text of Article 25 it sets the bar very high indeed, there’s got to be grave and imminent peril and the fact that the Bill will take perhaps a year to get through Parliament suggests that there isn’t grave and imminent peril. And therefore, most lawyers do not think that the Government’s argument based on Article 25 holds water, and therefore they would argue, and I would agree with this, that there is a breach of international law.” PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
“I think this conflict would really come into sharp focus if there was a dispute between the European Union and the United Kingdom over the legality of this action. So it’s not inconceivable that the EU would challenge this Bill and seek an arbitration, seek to form an arbitration panel that would decide on what basis those changes that the Government has proposed are implemented and in that case it would be very, very difficult I think for the UK Government to argue that doctrine of necessity does provide sufficient justification for the changes that they seek.” ANTON SPISAK, Senior Fellow Tony Blair Institute
ARTICLE 16
Article 16 of the Protocol offers a legal and temporary solution if the UK feels its interests are being severely damaged by the Protocol.
“Triggering Article 16 would not allow the UK to remove the role of the European Court of Justice - but the European Court of Justice has not so far been involved in any arbitrations under the Protocol, meaning that the UK has no legitimate recourse to remove it. Now Article 16 is in the Northern Ireland Protocol, and it does allow the Government to act if they think that there are societal, environmental or difficulties or trade diversion and for a long time the Government has been playing around with the idea of invoking Article 16. The problem is Article 16 is very limited in scope and it envisages a sort of surgical strike, rather than a wholescale rewriting of the Protocol… Had they relied on it for a surgical strike, that would have been lawful under international law and domestic law, but in order to use Article 16 to rewrite the Protocol that is beyond the scope of Article 16 and I think that’s why the Government rightly did not rely on Article 16, because Article 16 cannot be used for example to remove the role of the European Court of Justice, because the European Court of Justice has not yet been engaged in anything under the Protocol, so it’s very difficult to argue that the role of the Court of Justice has caused societal difficulties, and indeed polling suggests that nobody in Northern Ireland has been worried about the role of the European Court of Justice, so therefore Article 16 cannot justify the breach of international law.” PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
“Catherine mentioned Article 16, it is the Article 16 for all its constraints is in the Protocol and is lawful mechanism for dealing with some of the immediate difficulties that arise from the implementation of the Protocol. So, I think that would be a very, very strong argument that would be very difficult to dismiss by Government lawyers and I think would create a real conflict between the obligations that the UK has on the international stage and domestic law. ANTON SPISAK, Senior Fellow Tony Blair Institute
THE UK’S INTERNATIONAL REPUTATION
The Northern Ireland Protocol Bill and its progress through Parliament are being observed closely by other countries’ political establishments. The UK is seeking to build several free trade deals with countries around the world, including the US, and is therefore reliant on ensuring it retains credibility so that these countries continue to see Britain as a trusted potential partner.
We are also facing an international situation where several countries are breaking or are threatening to break the rules-based international order. Russia has invaded Ukraine and there are fears over China’s intentions regarding Taiwan. Britain is also being watched closely by the rule-breakers of this world who, according to our witnesses, are realising that much of the UK’s moral posturing might just be hypocritical.
On the whole, witnesses concluded that the Bill is extremely damaging for how the UK is perceived internationally.
UK-US COOPERATION
The US is particularly concerned by developments with the Northern Ireland Protocol Bill, putting at risk potential future UK-US cooperation.
“I mean first of all I think the Prime Minister doesn’t really like the argument that President follows from what I was trying to say earlier and if Biden really cares a lot about Northern Ireland but this Bill does become law more or less in its present he does, I’ve talked to him about it with him many form that there will be a pretty hostile reaction in times over the years and so does much of Congress, Washington, there would certainly be a linkage to and so I think the short answer to your question is any negotiation that might be in progress on the that Washington is very bothered about this and they comprehensive free trade agreement with the UK, but will now be looking at the British political scene with that seems to be pretty stuck at the moment.” SIR PETER WESTMACOTT KCMG, LVO Former UK Ambassador to the United States
“The United States feels a “But one of them will be to see well what sort of a strong political, if not a formal legal responsibility for Government and what sort of a Prime Minister are we what happens and therefore is concerned about what’s going to have, and will they be as determined as Mr going on. Which is why we have seen senior members Johnson and Liz Truss have been to push ahead with a of the Biden administration saying that if anybody unilateralist solution to the perceived problems of the thinks they’re going to get a free trade agreement Northern Ireland Protocol. Or will there be a different while a coach and horses is being driven through approach, and neither you nor I suspect you can yet the Northern Ireland Protocol, you know they’ve got answer that question.” another thing coming, my language not theirs.” SIR PETER WESTMACOTT KCMG, LVO Former UK Ambassador to the United States
Economic consequences
Reputational risks could have damaging economic consequences.
“There is the question of Northern Ireland’s reputation in terms of selling into whether the United Kingdom’s international reputation other markets, so that’s not good.” SIR PETER WESTMACOTT KCMG, LVO Former UK Ambassador to the United States
“We still feel that it is very disappointing to conclude other deals or the willingness of other because it will lead us to a way of constant uncertainty, partners to conclude such deals with us.” MARTIJN DE GRAVE, Special Adviser for the UK Office of Maroš Šefčovič
“I think businesses in general disapply parts of the Protocol as they please, instead would not be happy with trading on the basis of of trying to find joint solutions together in order to get breaching international law because it’s bad for legal certainty and stability.” FRANKIE DEVLIN, Resident Partner KPMG
TRUST
The UK risks losing the trust of several international partners.
“As a consequence of the Bill and if Ministers would actually make use of the confidence they would get under the Bill, it would mean basically the UK Government would decide what kind of goods would enter our internal market and if we read the Bill correctly, that’s not only goods coming from Great Britain but goods coming from all around the World. And that is clearly something which is of grave concern to us because the unique feature of the Protocol is of course that for the first time we have outsourced the control of our external borders to a third country, the UK, which requires a great deal of trust as you can imagine and that trust is really put at very severe risk if it would be for the UK Government who would be in charge of controlling our internal market could decide themselves without any input of us what kind of goods would enter the internal market and which not.” MARTIJN DE GRAVE, Special Adviser for the UK Office of Maroš Šefčovič
“I’ve just had a look back at the text of Article 164 of the Withdrawal Agreement which is the powers of the Joint Committee and so that’s the Joint Committee, that’s the political body set up under the Withdrawal Agreement to address problems, and those powers do give the Joint Committee the power to prevent problems that arise under this agreement of resolving disputes and to adopt decisions and make recommendations. There is a reasonably broad amount of wriggle room I think under Article 164, no it doesn’t mean you can rewrite the Protocol entirely and take out the role of the Court of Justice, but to deal with those ten or so very stubborn problems there is, I think there’s quite a lot of flexibility but of course it requires a build up of trust, and as we know that is also the problem.” PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
THE DAMAGE THE BILL WOULD CAUSE
Witnesses were clear that the Protocol Bill could have far-reaching consequences. causes high levels of uncertainty, ultimately having Witnesses highlighted the potential for the Bill to lead to significant economic damage in Northern Ireland and other parts of the UK.
Trade risks
There could be serious consequences for UK trade as a result of the Bill, including the potential for the trade and cooperation agreement to break down.
“I think what I can say is what the Vice President I think has consistently said when it comes to this issue, adoption of the Bill, and effectively displaying the core elements of the Protocol is a very serious issue and it would mean that the European of the Protocol is a very serious issue and it Union would use the means at its disposal and will not would mean that the European Union would use exclude anything at this moment, and as you are aware the means at its disposal and will not exclude the philosophy of the trade and cooperation agreement anything at this moment.” MARTIJN DE GRAVE, Special Adviser for the UK Office of Maroš Šefčovič
“There’s a whole bunch of other things that the EU could do to respond to what the UK has done or will do, assuming the Bill becomes law, if you look at the TCA…there are a whole bunch of provisions that could still be engaged. For example, it’s possible for the EU to decide that because the UK has acted in such bad faith it’s just going to give 12 months’ notice and terminate the TCA, it doesn’t need to give a reason for it, it just needs to act unanimously. Or it could decide that it will just terminate the trade provisions of the TCA, which also means tariffs. Or it could decide that the use of the Northern Ireland Protocol Bill is such a fundamental breach of the rule of law that this is a breach of the essential safeguards and therefore the EU might decide to suspend the operation of the TCA. So, there’s a whole bunch of other steps it can take, there’s another half a dozen but I think those are the main ones that it may decide to use.” PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
BUSINESS IMPACT
Businesses will be economically impacted by the Bill should it pass. Northern Ireland’s economy is actually benefiting from the Protocol and this Bill would negate that benefit.
“The immediate priorities for businesses, it’s certainty and stability which is what they’ve been calling for throughout all of this because there have been a lot of significant changes, rule changes which businesses have been doing their best to get their heads around and putting in new resources, new systems to deal with that. “Because businesses will find solutions to problems, but again the uncertainty and instability is how long is the Protocol going to be in play, will this Bill override certain sections of it, so again that is not good for business, it’s not good for our local businesses, it’s not good for foreign direct investment opportunities, so really certainty and stability are the immediate priorities for business because they just want to get on with the day to day business.” FRANKIE DEVLIN, Resident Partner KPMG
“And this is very concerning, not least because if we’re looking at polling, we see now 55% of people saying that as it is at the moment, the Protocol is positive for Northern Ireland’s economy and two thirds of people in Northern Ireland are saying that it brings economic opportunities for Northern Ireland that could benefit Northern Ireland if exploited. And that includes soft Unionists as well as others.” PROFESSOR KATY HAYWARD, Professor of Political Sociology Queen’s University Belfast
IRELAND
The Bill does, and could continue to give rise to problems on the island of Ireland.
“I think in Washington they take the view this can be fixed, the Commission has made proposals, the Irish Government has made proposals and that the UK does not need to take a unilateralist sledgehammer if you like to crack a big-ish nut, I of course accept that. “So, they’re nervous that this could be damaging to stability, peace, prosperity on the island of Ireland.” SIR PETER WESTMACOTT KCMG, LVO Former UK Ambassador to the United States
A NEGOTIATED SOLUTION?
The question of whether by publishing this Bill the UK However, witnesses to the Commission highlighted Government has gone too far in terms of restoring that there is the potential for negotiations and that cooperation with the EU over Northern Ireland cooperation and negotiation is by far the preferred Path of the EU remains to be seen.
NEGOTIATION
The EU seeks a negotiated solution and is keen to welcome the UK back to the negotiating table.
“I would say I think the encouraging thing is that the EU response to the Northern Ireland Protocol Bill so far has been measured and nuanced, I was in Brussels the week before last and we talked to some of the Commission officials and it’s quite clear that their game is not punishment, I know that’s become a narrative but it’s important to see it from their point of view that they see the Northern Ireland Protocol Bill is already a huge concession because it’s essentially contracting out part of the management of their external border to a third country, so they feel they’ve already made huge concessions as far as that’s concerned.” PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
COMPROMISE
Compromise has happened before - and it can happen again.
“If the UK was really serious about sorting out the problems on the ground with the Protocol, why they didn’t say you the EU are not cooperating, you the EU are not coming up with solutions and therefore we start this process, the dispute resolution process, and just to remind you of course there was a dispute resolution that the EU started against the UK over solar panels, nothing to do with the Northern Ireland Protocol, and that got resolved last week through the political dialogue stage. So, it is a way forward.” PROFESSOR CATHERINE BARNARD, Professor of EU, Employment and Competition Law University of Cambridge
