Brexit, Article 16 & The Panic Button

By Danyaal Khalid, Student at Haileybury and Imperial Service College

Article 16 of the Northern Ireland Protocol - the large, red panic button underpinning the extensive 63-page document, with its sole purpose to prevent the ‘hardening’ of the Irish Sea and land border [1]. In this article, the importance of this point within the Northern Ireland Protocol of the Trade and Cooperation Agreement (TCA) and its practical implications on Brexit will be explored.

It is undeniably necessary that the formation of a hard border between Great Britain and Northern Ireland, and Northern Ireland and the Republic of Ireland, is halted and virtually eradicated. It would have cataclysmic effects on all parties involved. There are immense concerns over police presence at the Northern Irish border, leading to the reopening of sensitive wounds and an encore of inexorable, large scale, violent terrorist attacks. The Good Friday Agreement ended the Violence of the Troubles, the long-winded, extremely violent and volatile conflict between Unionists and Republicans within Northern Ireland. Signed on April 10th 1998, it requires the border to be open; thereby closing the border could potentially aggravate civil unrest once again.

Article 16 is intended to be employed if applying the provisions within the Northern Ireland protocol leads to ‘serious economic, societal or environmental difficulties that are liable to persist, [leading to the] ‘diversion of trade [2]’. The term ‘diversion of trade’ has some ambiguity surrounding it, considering it is not explicitly defined within the protocol. However, the classic macroeconomic definition of trade diversion is where trade is directed to a less efficient supplier due to a customs union or FTA [3]. It can, therefore, be assumed that this is what is being referred to, where adverse effects on consumers are apparent.

It also allows the Union (EU) or the UK to take unilateral action in implementing safeguard measures to negate the difficulties. However, the EU can restrict the trading of what are deemed ‘risky goods’ between Great Britain and Northern Ireland irrespective of Article 16, which certainly raises concerns with Unionists over the lack of a definition for risky goods, potentially opening it to malpractice from the EU. There is, however, government issued guidance which states that ‘risky’ goods are those that are at risk of leaving UK customs territory and entering the single market without paying the corresponding tariffs for that product [4]. The only exemptions apply where a trader can claim a preferential rate of duty under Chapter 2 of the TCA, and if they are authorised under the UK Trader Scheme and declare that the goods are not at risk of onward movement to the EU [5]. Currently, grace periods are in place to ensure the smooth, coherent transition to this nascent legislation, and they apply to pertinent and necessary goods such as medicine (which currently has a 12 month grace period), and there is a 3-month period in place for supermarkets - those termed as ‘food suppliers’ have not been addressed - to ensure the uninterrupted supply of food.

Article 16(2) details that if the safeguarding measure enforced by a party ‘creates an imbalance between the rights and obligations under this protocol’, the Union or the UK may use appropriate and proportionate rebalancing measures to remedy the imbalance. On top of this, in anticipation the UK passed the Internal Markets Bill - initially in response to the EU attempting to mediate and stop food exports from mainland Britain into Northern Ireland - which prevents the EU from undermining trade between the UK and Northern Ireland, to ensure the unhindered flow of goods between the two parties. Article 16(2) also states that priority should be given to measures that will cause the least disruption to the functioning of Article 16(1). In addition to this, the TFEU further supports this under articles 346 and 347, which respectively entail that measures cannot adversely affect internal markets and nations should work in conjunction with one another to prevent the internal market being affected by such measures. The Internal Markets Bill is being held, but not yet used, by the UK as a nuclear option, should this fall through.

The final paragraph within Article 16 details the governance and regulation of potential safeguarding and rebalancing measures that may be adopted in accordance with paragraph 1 and 2, where they are controlled by Annex 7 to the Protocol.

Annex 7 encompasses the logistical procedure of enforcing safeguarding or rebalancing measures:

  1. If unilateral measures are taken, the other party must be notified instantaneously through the UK-EU joint committee.

  2. All details of serious economic, societal or environmental difficulties must be illustrated, why action is required, what action is being taken and the reasoning behind the action must be explained also.

  3. The UK and the Union must immediately consult to find a ‘commonly acceptable solution’. For the duration of the primary month of consulting, no measures are permitted unless talks are concluded or extenuating circumstances are present.

  4. In the event that measures are adopted, the joint committee must be notified; which will then discuss the measures every three months with the aim of abolishing them and their scope

  5. The UK or the Union can request the reviewal of measures at any point

  6. All points shall apply mutatis mutandis to rebalancing measures in Article 16(2)

Ultimately, the purpose of this Article is to afford crucial time and breathing space in order to resolve prevalent issues due to the implementation of the agreement and avoid aggravating problems. It should only be exercised when the joint approach is unsuccessful, further exhibiting that this is indeed a measure of ill-judged desperation by the EU.

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