The promise that the Northern Ireland Protocol would offer the ‘best of both worlds’ to northern businesses now seems a long way off. The argument was that it would give unique access to the UK and European markets. The subsequent problems with importing goods from Britain were real, in some areas, although surely exaggerated by the Johnson government and opponents of the protocol, most notably the DUP. And now the UK’s refusal to agree to a compromise plan presented by the European Commission has generated further uncertainty, as London threatens to trigger Article 16 of the protocol, resulting in inevitable retaliation from the EU. EU.
As a result of the protocol, Invest NI, the body responsible for attracting foreign investment, reported increased interest as companies assessed the benefits of accessing both markets. All potential foreign investors will now have suspended their procedures. A negotiated settlement between the UK and the EU should be solid so that they are likely to move forward. Local businesses, meanwhile, can only wait and see what happens.
It is unclear exactly what the UK would do when it triggers Article 16 – any action must, under the article, be “strictly necessary” in others to address the identified problem. Likewise, the EU must decide how to react – it could threaten tariffs on some UK exports, sparking a trade war.
For the Republic, the stakes are high. A suspension of checks on goods entering the North from Britain would raise the question of where goods are checked – alternatives at the Irish border or at French and Dutch ports would both be deeply undesirable in Dublin. And the Belgian Deputy Prime Minister said yesterday that the EU should consider canceling the whole deal – which would put us back into more uncertainty and more negotiations.
Ireland will push both the EU and the UK to settle this issue in talks over the next month. But speculation remains that the UK could still decide to trigger Article 16 after the Cop26 summit, triggering an economic war where the island of Ireland would find itself once again stuck in the middle.