It is no surprise that the DUP is outraged by this controversial part of the new Withdrawal Agreementby David Henig / October 24, 2019 / Leave a comment
Along presumably with all other UK trade specialists, I have been receiving plenty of calls and messages in recent days to try to explain how the Northern Ireland protocol of the Brexit Withdrawal Agreement, as agreed by Boris Johnson and the EU recently, will work. The first part of the answer is the easy part: there is precious little detail in the agreement, and this will have to be worked up in the coming months. But typically I am then pressed to specify what checks would be done at what border on what goods, and have to respond that Northern Ireland would be treated as part of the EU in terms of customs and regulatory checks, with the possibility of subsequent rebates.
That is because in order to avoid land border checks, NI will keep one foot in the EU tariff regime and both feet in the single market for goods and agriculture. Not only will GB goods entering Northern Ireland have to pay the EU tariff, with the possibility of rebate if they remain in the province, but goods coming from Northern Ireland will have to similarly pay a GB tariff, unless it is proved that they originate solely in the province. Such tariff payments will mostly be done through a process yet to be designed, but there will have to be checks to reduce smuggling.
Forget the now-infamous bluster and confusion of answers on the subject of Northern Ireland by the prime minister and the Brexit secretary. We can actually be quite sure of the principles of the scheme, and the reason for this is the most fundamental of rules of the World Trade Organisation, the “Most Favoured Nation” principle.
Always a favourite among trade policy cognoscenti, the Most Favoured Nation principle means the exact opposite of what you would think. It holds that all members of the WTO must treat all other members equally, with regard to tariffs and other conditions of trade, unless a special preferential arrangement covering substantially all trade is agreed.
So, without preferential arrangements the UK cannot privilege imports from the EU over imports from, for example, the US. If EU products are able to come into Great Britain free of tariffs, but US products…