Will There Be a UK-EU Trade War?
The Northern Ireland Protocol has recently been the subject of heated debate, as the UK is unhappy that goods must be checked at the border between the UK and Northern Ireland. Come read our blog to learn more.
Liz Truss, the UK’s Foreign Secretary, announced plans in May that the country will change key parts of the Brexit deal that pertain to trade in Northern Ireland. The Northern Ireland Protocol, which was established in January 2021 to facilitate trading between Northern Ireland and the Republic of Ireland, remains within the EU bloc. The protocol removes the hard border between the two countries and has been the topic of heated discussion as Britain is not happy that under the protocol, goods must be checked at the border between Britain and Northern Ireland. Plans to change the protocol will likely evoke retaliation from Brussels, which could initiate a UK-EU trade war.
What You Need to Know about the Protocol
The Northern Ireland Protocol was set up to establish special trading arrangements for Northern Ireland following the UK’s departure from the EU. Brexit made the border between Northern Ireland and the Republic of Ireland the only part of the UK to share a border with an EU country.
The EU has strict rules on certain imports arriving from non-EU countries. After Brexit, that meant that checks were required at the Northern Ireland/Republic of Ireland border. This raised serious concerns, in part because of the importance of the Irish border in Irish political history. The Northern Ireland Protocol was designed to avoid the cameras and border posts that would be required to manage this border, so goods would be checked when entering Northern Ireland from the UK rather than at the Irish border.
Why the UK Opposes the Northern Ireland Protocol
Truss has claimed that the Northern Ireland Protocol has caused problems that were not foreseen at the time the agreement was signed. The protocol has brought in new checks that apply to goods moving between Great Britain and Northern Ireland. Many unionist politicians have been vocal about their opposition to the protocol since it was introduced last year.
According to Truss, a bill is also being pushed through that, if agreed upon, would fundamentally change the Northern Ireland protocol. It would introduce "green" and "red" lanes, which would separate goods moving between Great Britain and Northern Ireland. Truss also promised that the bill would ensure the goods moving into the UK that are not destined for the EU would be “freed of unnecessary bureaucracy”. The protocol will remove regulatory barriers to goods sold in Northern Ireland that are made to UK standards, and a new dual regulatory regime would allow businesses to choose between meeting UK or EU standards. The changes proposed to the Northern Ireland protocol will allow the UK government to decide on policies that affect tax and spending throughout the entire UK as well. Finally, the bill is expected to bring the protocol in line with international norms.
Is a Trade War Likely?
Recent news have revealed that the EU is ready to take legal action against the UK over the Northern Ireland protocol bill. It is unclear whether the UK will back down. While the future of UK-EU trade is uncertain, those on both sides appear to be committed to finding the best solution so that trade can thrive.
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