Yves here. I am behind in providing an update on the state of Brexit, now that the UK has officially gotten stroppy over the Northern Ireland protocol and the EU has formulated some fixed. But this openDemocracy piece provides a good overview of the issues in play, especially the UK’s belief that it holds a trump card in its threat to trigger an Article 16 dispute. Regular readers will note that the UK, true to form, is overplaying its hand. By George Peretz, a queen’s counsel in England and Wales and barrister-at-law in Ireland. His practice covers a wide range of public law, regulatory and tax issues, with particular strengths in competition and state aid, pharmaceuticals, VAT and customs/trade remedies, and agriculture. He has argued a number of major cases in the Supreme Court, Court
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Yves here. I am behind in providing an update on the state of Brexit, now that the UK has officially gotten stroppy over the Northern Ireland protocol and the EU has formulated some fixed. But this openDemocracy piece provides a good overview of the issues in play, especially the UK’s belief that it holds a trump card in its threat to trigger an Article 16 dispute. Regular readers will note that the UK, true to form, is overplaying its hand.
By George Peretz, a queen’s counsel in England and Wales and barrister-at-law in Ireland. His practice covers a wide range of public law, regulatory and tax issues, with particular strengths in competition and state aid, pharmaceuticals, VAT and customs/trade remedies, and agriculture. He has argued a number of major cases in the Supreme Court, Court of Appeal, European Court of Justice and General Court and regularly leads in the senior English courts. Views expressed in openDemocracy are his own, not those of his chambers. Originally published at openDemocracy
The UK government and the EU are in a stand-off over the Northern Ireland protocol. David Frost, the British minister for EU relations, has threatened to invoke Article 16 of the protocol, which allows either side to take safeguarding measures in response to “serious economic, societal or environmental difficulties or diversion of trade”. But Article 16 is not the ‘get out of jail free’ card that it is frequently said to be.
The British side has two sorts of problems with the Ireland/Northern Ireland Protocol (to give it its proper name): some are practical, and people in Northern Ireland are feeling them directly; some are more abstruse and haven’t actually caused any difficulties yet. Most of the practical problems can be solved within the terms of the protocol. In contrast, solving the abstruse problems would require it to be rewritten – which just won’t happen.
Sausages and Pet Passports
Among the practical problems are issues of customs and regulatory checks and controls. These flow from the fact that the protocol applies the regulations of the EU single market to goods sold in Northern Ireland and also applies both those rules and EU customs rules to goods coming into Northern Ireland from Great Britain.
One important exception to that principle is that goods from Great Britain that are intended to stay or be consumed in Northern Ireland are not subject to tariffs: a joint committee of EU and UK representatives decides precisely what goods benefit from that exception. But even those goods are subject to customs and regulatory checks when they arrive in Northern Ireland.
Those regulatory and customs checks have caused problems, particularly for food and animals – sausages and pet passports – as well as for medicines approved for use in Great Britain or exported to Northern Ireland by pharmaceutical companies based in Great Britain. These problems have been very visible to business and ordinary citizens in Northern Ireland.
The Northern Ireland protocol does not need to be rewritten, nor Article 16 invoked, to solve these practical problems. In most cases, EU legislation can be tweaked as it applies to Northern Ireland, and the proposals that the European Commission published on Wednesday indicate that this is now very much a possibility (for example, reducing or removing customs or regulatory checks even where EU law would otherwise require them to be carried out at the EU border).
Not so for the abstruse concerns. These include, in particular, state aid and the role of the European Court of Justice (ECJ). Tweaks alone will not satisfy the British government’s wishes here. It is hard to see, however, that any real difficulties have yet arisen in these areas.
The issue of state aid is, at its heart, not about Northern Ireland at all: it is about a point that, it appears, the current government failed to spot when it agreed to the protocol but was obvious to any lawyer who knew anything about such matters. Article 10 of the protocol applies EU state aid law to any UK measure that could have an effect on Northern Ireland/EU trade in goods, and so EU law applies to a whole range of UK-wide subsidies, even ones that apply primarily to Great Britain or are limited to Northern Ireland. This is a phenomenon known as ‘reach-back’, and it could certainly lead to conflict in time.
As yet, however, no case has emerged where reach-back matters. And if EU state aid law were found to apply to a UK measure that was politically sensitive, the European Commission might well be able to resolve the problem by using its wide powers to authorise state aid.
The British government fluffed its obvious chance to renegotiate Article 10 when it was agreeing on subsidy control provisions as part of the negotiations for the EU-UK Trade and Cooperation Agreement (TCA): it could, at that stage, have asked for changes to Article 10 to reflect its agreement to those provisions, but appears not to have raised the matter.
As for the ECJ, its role at the top of the pyramid of enforcement of EU law as it applies to Northern Ireland was crystal clear under the protocol (it’s in Article 12) and the British government made no complaint about it before the command paper it published in July. No case from Northern Ireland has arisen before the court and none is on its way to doing so. But the ECJ is an old shibboleth of dogmatic Brexiters, who regard complete freedom from its jurisdiction as totemic.
There is no easy solution to the abstruse problems. Removing the ECJ would require a wholesale rewrite of the protocol, and even a change to the state aid rules in Article 10 would require some rewriting.
To put it mildly, there is little appetite in the EU for such a rewrite now, given the processes that would need to be gone through, and the general perception, enhanced by the current government’s misconceived attempts to breach the EU-UK withdrawal agreement in the Internal Market Bill last year and by some carefully timed tweets by the former top aide to Boris Johnson, Dominic Cummings, that it always intended to ‘cheat foreigners’ by wriggling out of the protocol as soon as it felt it could get away with it.
‘Clash with Judges’
And what of Article 16? Sadly for the British government, while the practical problems could be the basis of action under that famous ‘safeguards’ provision, the abstruse problems that it has now raised cannot.
Article 16 is not a ‘rewrite the protocol as you feel like’ provision. Rather, it allows either side to take “appropriate” measures, restricted in scope and duration to what is “strictly necessary”, to address “serious economic, societal or environmental difficulties that are likely to persist” or “diversion of trade”.
Those terms are fluffy, and no court is likely to want to start arguing the questions of what is appropriate and what are serious societal difficulties with elected politicians (as long as they have at least some basis for their claims). But the terms are not infinitely flexible, and it would be hard plausibly to extend them to the abstruse problems: what “serious economic [or] societal difficulties” or “diversion of trade” are currently being caused by Article 10 or the role of the ECJ?.
Moreover, the boundaries of these terms are policed not only by the international mechanisms in the withdrawal agreement and the Northern Ireland protocol contained within it, but also by the domestic British courts: the protocol is part of UK law under Section 7A of the EU Withdrawal Act 2018, inserted by the current government only last year.
For that reason, if the government were to rely on Article 16 to cut down the role of the ECJ or limit the effect of Article 10, it would, as a recent lead article in The Sunday Telegraph put it, lead to a “clash with judges”. The only way of avoiding that clash would be to pass a law that allows breaches of the protocol – but such legislation would then set up a “clash with the House of Lords”, given the huge majorities by which that house rejected the equivalent Internal Market Bill provisions. It would also, if passed, be a clear breach of the withdrawal agreement that would allow the EU to take retaliatory action.
Any sustainable Article 16 action will therefore need to focus on the practical problems rather than the abstruse ones. But a further difficulty arises: given the Commission’s offer of flexibility on those problems, how far could it be “appropriate” to use Article 16 measures when negotiation can (at least potentially) deal with those problems?
The government, therefore, has little choice but to chase down the extent to which the Commission’s proposals will resolve the current difficulties. It is only when it can mount a plausible case that these proposals cannot realistically be expected to resolve these difficulties that it could lawfully use Article 16.