Brexit: Can the sticking points on Northern Ireland be resolved? – Financial Times

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Britain and the EU have become locked in an escalating row over trade rules for Northern Ireland ahead of crunch Brexit talks this week and US president Joe Biden’s arrival in the UK for the G7 summit.

EU figures including France’s European affairs minister Clément Beaune on Monday hit out at comments from British Brexit minister David Frost in the FT that the EU should abandon “legal purism” and embrace “common sense”. 

An EU official on Monday retorted that Britain had reached a moment of decision to either implement its Brexit deal on Northern Ireland “in good faith” or “continue along the more confrontational path that it seems to have chosen so far.”

Brussels was ready to explore “all the tools, all the options” available to defend the bloc’s interests, the official said, noting that “patience is wearing thin”.

The mutual recriminations focus on the Northern Ireland protocol agreed in 2019 as a way to prevent a hard trade border on the island of Ireland by placing checks on goods travelling from Great Britain to the region.

Unionist politicians in Northern Ireland and businesses have railed against problems ranging from potential future impediments to imports of generic medicines to the risk of more general disruption caused by imposing veterinary checks on goods crossing the Irish Sea.

While the UK claims that the EU should show more flexibility over the protocol, Brussels claims it is doing all it can to explore creative solutions, while complaining that Britain is failing to fulfil basic options such as sharing customs data.

Behind the scenes, officials on both sides have been working to identify possible solutions, aware of the risk of rising tensions in the region as grace periods on some of the protocol’s requirements expire.

Veterinary checks

No area is thornier than that of veterinary checks on food or live animals — but it is also one where clear solutions exist if politics can align with them. 

Frost has rejected suggestions from the EU that Britain should sign up to a deal along the lines of Switzerland’s veterinary agreement with the EU, which tethers the Swiss to EU norms. 

British officials say that it would constrain the UK’s ability to strike trade agreements with the rest of the world. Sefcovic has said such an arrangement could be strictly temporary. 

The EU has, in the past, struck looser veterinary agreements with countries including New Zealand and Canada. But these only reduce the frequency of physical checks, not the great burden of paperwork, such as export health certificates. 

Aodhán Connolly, director of the Northern Ireland Retail Consortium, said a temporary fully-aligned deal would solve the vast bulk of the immediate problems with the protocol, while providing space to find a long term workable solution.

He warned that unless a deal were done, business was facing a “moment of reckoning” in October when grace periods expired, piling additional burdens on business. 

“Business is, frankly, fed up with the game-playing and dramas from both sides. What we need is certainty,” he said.

Technological solutions

The UK government has argued that it has demonstrated its commitment to implementing the protocol by investing in a £200m Trader Support Service; a Movement Assistance Scheme to assist supermarkets and food retailers; and a £155m Digital Assistance Scheme that aims to reduce border frictions by digitising formalities.

The DAS scheme will start with fresh meat products in October this year, according to a government presentation to industry, seen by the Financial Times, but will not be complete until October 2022.

However trade groups warn that digitisation, while streamlining checks, will not provide a silver bullet, particularly for smaller businesses that are not part of an MAS scheme primarily designed to help supermarkets.

Shane Brennan, chief executive of the Cold Chain Federation, said without a vet deal, British businesses servicing the hospitality, school or prison sectors that could not use the supermarkets scheme would still face burdens that would put many off from doing business with Northern Ireland.

“It might help big supermarkets — but for a haulier carrying 30 pallets from 15 different businesses, it is only by removing paperwork via a veterinary deal that you build the confidence to trade,” he said.

Distribution of medicines

The protocol has created barriers in Northern Ireland to selling medicines made in Great Britain unless they also have the necessary EU regulatory approvals and licensing arrangements. 

This is because Northern Ireland is within the EU’s single market for goods, where pharmaceutical companies need to secure marketing authorisations from the European Commission, following an evaluation by the European Medicines Agency. 

Industry experts warn that the problems will be especially acute for the distribution of generic medicines. 

“We realise that there is an issue and we are absolutely willing to solve it,” said an EU official. “We are considering solutions beyond the flexibilities already inherent in applicable EU law.”

EU demands more UK action

Sefcovic has already made clear that the EU is working on solutions to facilitate travel with guide dogs, and to remove needlessly repetitive requirements for tagging of live animals. But British officials say they have yet to see the detail of the measures. 

Brussels is also working on how to disentangle Northern Ireland from EU restrictions on steel imports, while still protecting the EU market.

But the EU has in turn demanded to see more action from the UK towards addressing Brussels’ concerns that Britain is not living up to its legal obligations, including when it comes to real-time access to customs data for EU officials, and construction of permanent border control posts for goods entering Northern Ireland — steps the EU argues are legally required and vital for protecting the single market.

“If there’s to be a discussion on new, extended or expanded flexibilities, then we believe the UK first needs to implement the protocol effectively,” said the EU official.

Additional reporting: Laura Noonan in Dublin