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The N Ireland protocol: what is blocking a deal?

London and Brussels could announce a deal to resolve a bitter dispute over post-Brexit trade in Northern Ireland as early as this week. But with final negotiations under way, one sticking point remains: the region’s biggest pro-UK party is demanding that it should not be subject to EU laws.

The Democratic Unionist Party has paralysed Northern Ireland’s political institutions since May to press for changes to the so-called Northern Ireland Protocol, which sets the rules for post-Brexit trade. It is demanding that the region be allowed a say in the laws which govern it.

When Brexit took effect in 2021, Northern Ireland was left inside the EU single market for goods and a trade border was put in the Irish Sea to avoid a politically sensitive land border with its EU neighbour, Ireland. But hardline unionists and the UK government say the protocol creates a “democratic deficit” that leaves Northern Ireland subject to EU rules.

What is the ‘democratic deficit’?

Under the protocol, the region has to follow EU rules for trade. The European Court of Justice, the bloc’s top court, has the final say in any disputes.

However, this means that when regulations are changed, Belfast must follow suit. That could mean amending as many as 300 regulations that were still in force when the UK left the EU in 2020, and which still apply in Northern Ireland.

Whether new regulations for goods trade in the single market apply in Northern Ireland can be discussed by an EU-UK joint committee that oversees the working of the Brexit trade agreement, chaired by the UK foreign secretary and the EU’s Brexit commissioner.

If the UK objects but the EU believes they are necessary, Brussels could take unspecified “remedial measures” to force London to comply.

DUP leader Sir Jeffrey Donaldson told UTV last month that if EU rules changed significantly from the current UK legislation it “would seriously impact our ability to trade within the United Kingdom because our standards would then diverge from UK standards”.

A UK bill giving ministers powers to scrap large parts of the protocol, which is currently on ice in the House of Lords, would allow traders to follow UK or EU regulations in Northern Ireland — a route the DUP favours.

EU diplomats say the legislation is a red line for Brussels and is akin to a loaded gun on the negotiating table. But hardline unionists say they object to the EU’s top court having the final say over application of the protocol.

What are the obstacles to fixing it?

The EU has ruled out any renegotiation of the protocol. Under Article 18 of the protocol, Northern Ireland’s legislators have the right to a vote late next year on whether or not to maintain some of the rules. Such a vote can potentially be held every four years, but will not allow politicians to scrap the protocol altogether.

The region’s complicated power-sharing arrangements mean that agreement between the traditional nationalist and unionist communities — required for sensitive decisions — is difficult. Despite the DUP’s opposition, a majority of legislators backs the protocol as it stands.

Jon Tonge, politics professor at the University of Liverpool, said that given the “dysfunctional nature” of the Stormont executive and the veto powers both sides hold, “it would be downright dangerous” to give too much say to legislators.

Georg Riekeles, who helped negotiate the protocol for the EU and now works for the European Policy Centre think-tank, said Article 18 provided the region with sufficient democratic accountability.

He warned that a “pick and choose” mechanism was unsustainable. “It would become the occasion of endless debates and ultimately the unravelling of the framework.” he said.

Can the problems be overcome?

One suggestion by the European Commission is for Northern Irish businesses and politicians to be given a consultative role. There is already an example of this for non-EU members Norway, Iceland and Liechtenstein, which are aligned with the single market and attend consultative groups with member states before legislation is drawn up.

They can also veto the application of new laws in their countries but in practice this has never happened.

“One could envisage a process that involves consulting the Northern Ireland assembly,” said Mujtaba Rahman, Europe managing director at consultancy Eurasia Group.

“There is awareness of the specific situation with Northern Ireland and where things have a significant impact. Regulations coming down the track will be discussed and the joint committee will be a vehicle to do that.”

Brussels points out that the implementation of the protocol can be adapted. Last year, for example, the commission unilaterally changed its regulations to prevent a shortage of medicines in Northern Ireland.

“It shows that the protocol has the flexibility to work on the ground,” Maroš Šefčovič, the Brexit commissioner, said at the time.

Others have suggested that the role of the ECJ as the ultimate arbiter of the protocol could be softened by Brussels committing to only taking legal action against alleged breaches of the trading arrangements in very limited circumstances.

Michael Dougan, European Law professor at the University of Liverpool, said that could “mollify” London. “Easy to deliver, without amending protocol,” he tweeted.

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