New UK Legislation Announced to Unilaterally Change Northern Ireland Protocol

The UK's foreign secretary Liz Truss has delivered an oral statement to the UK Parliament, in which she announced the UK’s intention to introduce legislation in the coming weeks to make (unilateral) amendments to the Northern Ireland Protocol, while also stating that the UK’s preference remains a negotiated solution with the EU. Should the amendments be adopted, this could trigger a trade war with the EU.

Hong Kong traders may recall that, in October 2019, the UK and EU agreed on a special Brexit deal for Northern Ireland, known as the Northern Ireland Protocol (the Protocol). Under this deal, goods can freely flow across the border between Northern Ireland and the Republic of Ireland, leaving Northern Ireland in the EU's Single Market for goods. This was necessary so as to remove the threat of a hard border between the two Irelands. However, in order to protect the EU Single Market, goods arriving into Northern Ireland from the rest of the UK have become subject to inspections, creating, in effect, an “Irish Sea border”.

The UK and EU have been re-negotiating the Northern Ireland Protocol and, in recent weeks, tensions have flared up between the two sides over the UK’s repeated threats to renege on its obligations to carry out checks on some goods entering Northern Ireland. The rationale behind the re-negotiation of the Protocol is that, according to the UK’s Johnson government, the Protocol is hindering the movement of goods between Britain and Northern Ireland as well as damaging community relations. Under the Protocol, checks are required on goods coming into Northern Ireland from the rest of the UK.

Since it came into force at the beginning of 2021, the Protocol has been at the centre of controversy between the UK and the EU. This is due to the agreement that Northern Ireland would continue to follow EU rules on product standards (i.e., be subject to the EU's internal market rules). Inspections on British goods should thus take place at Northern Ireland ports to make sure they comply with EU laws.

The changes which the UK is calling for amount to, essentially, putting an end to inspections and paperwork between Great Britain and Northern Ireland. The UK also wants to ensure that goods which are destined for Northern Ireland only, have to simply meet UK standards without also having to comply with EU law. The UK also wishes to once and for all bring an end to oversight by the European Commission and the European Court of Justice on how the Protocol functions.

In her oral statement to the Parliament, Liz Truss, the UK Foreign Secretary, mentioned that she had undergone six months of negotiations with European Commission Vice-President Maroš Šefčovič, following a year of discussions undertaken by her predecessor. During these re-negotiations, the UK and EU have not been able to find common ground on the issues mentioned above. Therefore, the UK wants to respond to the “very grave and serious situation in Northern Ireland” by adapting the legislation, which is, according to the UK Government “consistent with [the UK’s] obligations in international law”.

Hong Kong traders may want to know that the announced Bill aims, according to the UK, to “lessen the burden on East-West trade” and ensure that “goods moving and staying within the UK are freed of unnecessary bureaucracy” through the so-called “green-channel”. This would respect “Northern Ireland’s place in the UK’s customs territory and protect the UK internal market” while customs paperwork for goods remaining in the UK will be removed.

The Bill is also geared towards the removal of regulatory barriers confronting “goods made to UK standards being sold in Northern Ireland”. If the UK adopts this Bill into law, another consequence would be that traders operating in these markets would be given more freedom in the sense that they would be “able to choose between meeting UK or EU standards in a new dual regulatory regime” depending on the destination of the goods. At the same time, the UK Government has proclaimed that the EU will not be negatively impacted “in any way” and stated that it aims to protect the EU Single Market by “implementing robust penalties for those who seek to abuse the new system”, and by ensuring that there is no hard border on the island of Ireland.

More details about the Bill are expected to arrive in the coming weeks, according to the UK’s Foreign Secretary.

In a swift reaction to the oral announcement delivered in the UK Parliament, European Commission Vice-President Maroš Šefčovič issued a clear statement within hours. In his statement, the Vice-President first expressed the EU’s wish to have a positive and stable relationship with the UK, that is based on “the full respect of the legally binding commitments that the two sides have made to one another”. The Vice-President stated that “the Protocol on Ireland/Northern Ireland is the solution found to reconcile the challenges created by Brexit, and by the type of Brexit chosen by the UK government” and that the EU has shown understanding for the practical difficulties of implementing the Protocol and demonstrated that solutions can be found within its framework.

The Vice-President also referred to additional arrangements that have been set forth by the Commission and indicated that the Commission “stands ready to continue discussions with the UK government to identify joint solutions within the framework of the Protocol that would benefit people and businesses in Northern Ireland”. Mr. Šefčovič then went on to express significant concerns related to the UK’s intention “to table legislation that would disapply constitutive elements of the Protocol”.

Importantly, the Commission has not failed to warn the UK in clear language that “should the UK decide to move ahead with a bill disapplying constitutive elements of the Protocol as announced today by the UK government, the EU will need to respond with all measures at its disposal”.

According to Bloomberg, for US President Joe Biden, a serious dispute between the UK and the EU would be an unwanted problem as he seeks to maintain pressure on Russia over the invasion of Ukraine. President Biden stated that “this is not a time for unilateral action announcing legislation which would essentially breach international law, undermine an international treaty and create a lot of unnecessary tension between Brussels and London”. The US has consistently urged the UK to cooperate with the EU over the issue and has clearly warned against unilateral action.