The “Irish protocol” points to a potential Brexit scenario.
As Brexit advisors, we have followed the sway of arguments between UK ‘Leavers’ and ‘Remainers’ - along with the wider views for the future from those directly and immediately affected - the EU itself and the 27 other participating countries.
With just 10 months to go to Brexit – Friday 29 March 2019 – the wording of the Phase 1 joint agreement struck in December 2018, without which no further progress could be made, has emerged as a powerful pointer to one possible scenario.
4 days before the critical European Council on 14 December – and with no consensus reached - Donald Tusk, European Council President and European Commission counterpart, Jean-Claude Juncker, gave all sides those four days to salvage the deal. Otherwise, the UK could not move into Phase 2 of the talks.
The resulting agreement – now being referred to as the ‘Irish protocol’ says:
"In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South Cooperation, the all-island economy and the protection of the 1998 Agreement." [Paragraph 49].
The proposal that the UK is expected to make now hinges on that quirk of phrasing: "the UK will …" and not "Northern Ireland will…" - an issue far beyond the semantics of the text. In order to protect the integrity of the union within the United Kingdom, the text deliberately states that the UK as a whole would align with the rules of the single market and customs union.
For the avoidance of doubt, officials added paragraph 50 – stating that in the event of the backstop being deployed, there would be no barriers on trade between Northern Ireland and the rest of the UK.
There are reports from Dublin and the EU that hint that the consequences of paragraph 49. The Irish Taoiseach, Leo Varadkar, is keeping his counsel – but confirms that the topic was discussed in his meeting with Theresa May last week in Sofia. Michel Barnier – whilst admitting that the drafting was done hurriedly believes that it makes sense for the UK as a whole, and not a part of the UK.
Paragraph 49 presents a pathway for Theresa May into a transition period. The UK would align with the rules of the single market, but without having to apply the 'four freedoms' - or without accepting the role of the European Court of Justice. During the transition period, decisions and preparations for the longer term future would be made.
At the end of the transition – on 31 December 2020 - as things stand, the UK will leave the customs union. The deadline for negotiating anything other than this – or even an extension of the transition – is October 2018. The Withdrawal Bill has to be enacted by Parliament and agreement reached with the EU and the 27 remaining member states.
Brexit Partners has maintained strict impartiality and neutrality in analysing the impact of Brexit and advising businesses and governments on mitigating the risks to continuity and growth. We believe that this scenario – compounded by the dire warnings from Parliamentary Select Committees that the UK is underprepared for anything other than minimal change, at least during a transition period – represents a pathway that does much to minimise disruption to individuals, business and the economy through the time of the most significant change to the operating environment since the Second World War.
Contact Brexit-Partners for more detail on the impacts of the scenario and background to this Blog.