Britain and EU close to new ‘mini-deal’ on post-Brexit trade in Northern Ireland

 

Britain and EU close to new ‘mini-deal’ on post-Brexit trade in Northern Ireland

 

Mood music on both sides improving as negotiators prepare for intensified talks.

 

BY CRISTINA GALLARDO AND ESTHER WEBBER

JANUARY 13, 2023 2:21 PM CET

https://www.politico.eu/article/eropean-union-united-kingdom-northern-ireland-close-to-further-mini-deals-on-post-brexit-northern-ireland-trade/

 

LONDON — Britain and the EU are close to resolving another key area of dispute over post-Brexit trade in Northern Ireland, as the two sides prepare to enter intensified talks next week.

 

Negotiators are finalizing a solution to a long-standing legal row over Tariff Rate Quotas (TRQs) which has prevented Northern Ireland benefiting from reduced U.K. import tariffs on products such as steel, according to three people familiar with the talks.

 

British steel producers were furious at having to pay a 25 percent tariff last year to sell certain construction products into Northern Ireland, after EU quotas for global imports ran out earlier than expected. The issue had also enraged Northern Ireland’s Democratic Unionist Party (DUP), which opposes the existing post-Brexit agreement because it treats the region differently to the rest of the U.K.

 

An agreement on TRQs would be the latest step forward following another ‘mini-deal’ over data sharing earlier this week, and suggests the bitter EU-U.K. row over the Northern Ireland protocol, a key element of the Brexit divorce deal, could be nearing an end.

 

“We’ve entered a new dynamic that I believe will yield a positive result,” an EU official said. “I don’t think it will fail. The change in the British attitude was already clear, and it’s been confirmed. There is a willingness to find solutions quickly.”

 

EU and U.K. officials are now immersed in a “scoping exercise” to test the limits of each another’s positions and assess whether technical solutions exist for every disputed aspect of the protocol.

 

That exercise could go on as late as Sunday, officials said, and — if successful — might pave the way for an announcement on Monday that the two sides are entering the “tunnel” — a period of quiet, highly-intensified negotiations between senior political leaders.

 

European Commission Vice President Maroš Šefčovič and British Foreign Secretary James Cleverly are due to meet in person in Brussels on Monday to discuss the latest steps forward, while British and Irish officials will hold talks in Dublin later next week.

 

A diplomat from an EU country said that following a deal earlier this week on the use of a live information system detailing goods moving from Great Britain to Northern Ireland, the two sides aim to keep picking off “low-hanging fruit” in the hope this will create “political momentum” for an over-arching deal.

 

To that end, the negotiating teams have also made progress in the area of customs, officials on both sides said, although the U.K. does not believe all issues have yet been resolved.

 

The EU has made concessions regarding its processes on exports from Northern Ireland to Great Britain, a British official said, but the U.K. is still pushing for further changes.

 

Shanker Singham, a former senior Brexit adviser to the U.K. government, said other potential "quick wins" might include making it easier for traders to get onto the U.K. Trading Scheme, which regulates goods that originate in Great Britain but are not considered to be at risk of entering the EU single market from Northern Ireland.

 

Another, he suggested, would be to reopen the Authorised Trader Scheme, which allows certain companies such as supermarkets and their trusted suppliers to move goods from Great Britain to Northern Ireland without the need for official certification. The scheme has been closed to new entrants since December 2020.

 

The elephant in the room

Despite the positive mood music, however, European diplomats are still fearful of the political backlash U.K. Prime Minister Rishi Sunak may face internally as a final deal approaches in the weeks ahead.

 

One warned the next phase of talks will generate a “running commentary” that might torpedo negotiations if Sunak cannot keep the Euroskeptic wing of his Conservative Party on board.

 

“The new prime minister wants to find a solution, but (the U.K.) has lots of internal difficulties,” the same EU official said.

 

Speaking on Friday morning, U.K. Labour leader Keir Starmer urged Sunak to put Northern Ireland ahead of what he called a “Brexit purity cult” within the Tory party, and cut a deal.

 

“There is a small window of opportunity before April,” Starmer said during a two-day visit to Belfast, referring to the weeks leading up to April’s 25 anniversary of the Good Friday/Belfast Agreement that ended mass sectarian violence in Northern Ireland.

 

During a visit to Stormont the previous day, Irish Prime Minister Leo Varadkar warned that “it is not a given” that a deal on the Northern Ireland protocol would lead to the restoration of the power-sharing regional executive, given DUP opposition to many of the proposed solutions.

 

Singham predicted it would be difficult to win DUP support unless the final deal allows Northern Ireland to have at least some control over the rules on goods moving entirely within the U.K. internal market, and allows the region to either choose to abide by British regulations or to have some say over those it must follow.

 

The U.K. government has set a deadline of January 19 for the Northern Ireland parties to form a new power-sharing executive or face another election. That deadline is now likely to be pushed back a further three months.