Brexit Boomerang: Why The Northern Ireland Protocol's Back And Facing A 'Big Moment'

Is there a chance the political deadlock will be resolved?
Sinn Fein's Mary Lou McDonald, PM Rishi Sunak and the DUP's Jeffrey Donaldson
Sinn Fein's Mary Lou McDonald, PM Rishi Sunak and the DUP's Jeffrey Donaldson

Politicians have hinted that there just might be a breakthrough with the Northern Ireland Protocol in the coming days.

This would mean a resolution to one of the most difficult parts of life outside of the EU, and could – hopefully – mean executive power is restored to the region after months without a functioning devolved government.

What is the Northern Ireland Protocol?

You’ve undoubtedly heard about it (more than a couple of times) over the last few years, but the NI Protocol has a reputation for being complicated.

Shortly after he got the keys to No.10, then-PM Boris Johnson was determined to remove the main obstacle stopping the UK and the EU reaching a deal about its post-Brexit relationship – what to do about Northern Ireland.

As the only part of the UK to have a border with an EU country (the Republic of Ireland), it raised a question about how trade between the two would continue.

This was a particularly sensitive area as both the EU and the UK wanted to honour the 1998 Good Friday agreement.

The peace treaty was meant to end the decades of violence in the area, but it was important to avoid putting up a hard border between NI and the Republic to respect its rules.

So, Johnson proposed the NI Protocol.

It meant Northern Ireland would not have a trade barrier with Ireland and would follow all the trade rules of the EU, despite leaving the bloc with the rest of the UK.

Instead, a trade barrier would be put up in the Irish Sea so goods coming from Britain and entering Northern Ireland would have to be checked as though they come from a third country.

Northern Ireland Assembly: how the state of the parties has changed
Northern Ireland Assembly: how the state of the parties has changed
PA Graphics via PA Graphics/Press Association Images

Why was the protocol a problem?

From the very beginning, Unionists in Northern Ireland expressed worries that the region would become too separate from the rest of the country, and lumped with the bloc’s trade rules (but with no say on how the rules worked).

They said this would cause trade delays and food shortages – and it did.

The DUP (Democrat Unionists) are also the largest unionist party in Northern Ireland.

They have insisted that the protocol needs to be redrawn so the region is not so excluded from the rest of the UK.

The DUP are refusing to take their seats in the NI Assembly over this principle – which means (due to the Good Friday Agreement) that the devolved government cannot sit at all.

That means, even though the largest republican party in NI, Sinn Fein, actually secured more seats in the last election in May 2022 than the DUP (for the first time ever) and supports the protocol, there’s still a political impasse there.

The devolved government has not sat since the elections.

There are also concerns about how any future disputes with Northern Ireland should be resolved.

EU countries always turn to the European Court of Justice, but that’s a problem for the UK, as it wants to keep its Brexit-related autonomy.

To make everything worse, the EU was initially reluctant to change any of the wording around the protocol, while the UK was trying to appease the DUP.

The bloc needs to approve any changes to the protocol before they can be implemented.

So, why might there be a breakthrough now?

Few details have been released yet, but PM Rishi Sunak met with the political parties of Northern Ireland on Friday.

He is also flying to meet his EU counterparts in Germany, in an effort to resolve the deadlock.

Reports claim a new form of agreement could be reached next week.

After meeting with Stormont leaders, Sunak said “there’s more work to do” on reaching a deal with the EU.

The prime minister stressed that “we have not got a deal yet” as he vowed to continue negotiating with the European Commission “intensely”.

Speaking to broadcasters in Downing Street after returning from his trip, the prime minister said: “Today I had positive conversations with political parties in Northern Ireland about our ongoing discussions to resolve the Northern Ireland Protocol.

“Now it’s clear that we need to find solutions to the practical problems that the protocol is causing families and businesses in Northern Ireland, as well as address the democratic deficit.

“Now there’s more work to do. And that’s why my ministerial colleagues and I will continue talking to the European Union intensely to find solutions that protect the Belfast Good Friday Agreement and Northern Ireland’s place in our single market.”

After meeting Sunak, DUP leader Sir Jeffrey Donaldson said he thought more work was needed on the deal – although his party had not seen the final text of the new agreement yet.

He did admit: “Clearly, this is a big moment.”

He added: “The next generation of Northern Ireland and its people requires us all, I think, collectively to use our best efforts – particularly the prime minister and the European Commission president – to get these issues resolved and to get to a place where the political institutions can be restored.”

Sinn Fein president Mary Lou McDonald also said she thought “very significant progress has been made”.

She added: “I think we’ve all seen in recent weeks certainly an upping in the pace of political engagement and activity that to our mind is a very, very positive thing.”

Other NI parties (the Alliance Party and the SDLP) have also expressed optimism about a new potential deal, although all acknowledge it is not over the line yet.

Giving his assessment on Friday, Irish premier Leo Varadkar said “we’re not there yet” on a deal but added that he was “quietly confident” there could be an agreement within a fortnight.

Is everyone feeling optimistic?

No – some of the hardline Brexiteers are frustrated.

Former Brexit minister Lord Frost seemed significantly worried about such changes, telling The Telegraph that a “feeble deal now” would “make things worse not better”.

He suggested that “no deal is still better than a bad one”.

But, Nigel Green, the CEO of financial advisory firm deVere Group, has predicted that the British pound will receive a “significant bounce” if a deal is reached on post-Brexit trading arrangements in the coming days.

“Since Brexit, the pound has been out of favour with FX traders, with the UK currency falling nearly 18% against a basket of currencies since the referendum.

“It has also been dragged down in recent months by fears over slowing economic growth and multi-decades high inflation,” he said.

But, if a new deal is struck, he speculated: “It could help traders move past ‘peak pessimism’ regarding the UK, as it would likely help encourage a broader and healthier relationship with the EU which would boost economic performance.”


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