Lord Frost, the UK’s Brexit Minister, has cautioned that Article 16 may be the only option to renegotiate the Northern Ireland Brexit arrangement.
The Northern Ireland Protocol, which was put in place to prevent a hard border on the island of Ireland, is “not functioning” and “has to alter,” according to Lord Frost.
He expressed concern that the EU will reject the UK’s proposals.
Lord Frost believes that invoking Article 16, which suspends part of the agreement, may be the “only route” ahead.
What is Article 16?
In October 2019, the UK and EU agreed a special Brexit deal for Northern Ireland, known as the protocol.
It leaves Northern Ireland in the EU’s single market for goods.
That means that goods can flow freely between the Republic of Ireland and Northern Ireland, removing the threat of a “hard border”.
However goods arriving into Northern Ireland from the rest of the UK are now subject to checks and control.
This arrangement is referred to as the Irish Sea border.
Article 16 of the protocol sets out the process for taking unilateral “safeguard” measures if either the EU or UK concludes that the operation of the deal is leading to serious problems.
Those safeguards would amount to suspending parts of the deal.
What exactly does Article 16 say?
Safeguard measures can be taken if the protocol is leading to serious “economic, societal or environmental difficulties” that are liable to persist.
So, while it is not intended to be used for temporary or minor problems there is no specific guidance on what qualifies as a “serious” difficulty.
Additionally, it can be used if the protocol is leading to “diversion of trade”, but again there is no guidance on how exactly that should be interpreted.
The UK government says that, in its opinion, the threshold has been reached for using safeguards, but it is choosing not to use them for now.
A month’s formal notice is supposed to be given before any action is taken, although immediate action is allowed in “exceptional circumstances”.
Can the whole deal be suspended?
That is not the intention.
The text of Article 16 says any measures should be restricted in both scope and duration and limited to what is “strictly necessary” in order to solve the problems.
Additionally, it says that priority shall be given to measures that will “least disturb” the functioning of the protocol.
Negotiations would continue, with any safeguards being jointly reviewed every three months with a view to their abolition or limitation.
However, this would still seem to give the UK government quite wide discretion on what action to take.
For example, one of the biggest practical impacts of the protocol is that it has become much more difficult to send food products from Great Britain to Northern Ireland, particularly for small businesses.
If the government argues that this amounts to diversion of trade which is likely to persist then could it unilaterally suspend most of the checks and controls on food?
The government has not explicitly said what it would do, but it is useful to look at what it proposed in its July command paper.
It said it wants an arrangement where there would be “no need for certificates and checks for individual items that are only ever intended to be consumed in Northern Ireland”.
Raoul Ruparel, who was a senior Brexit advisor to Theresa May, says he thinks this sort of approach is likely.
Writing on Twitter, he said: “What the UK wants to do is quite clear. It will likely suspend parts of the protocol around the (Irish Sea) border – customs and agrif ood especially.
“It will move to implement its approach as set out in the command paper.”
What could the EU do in return?
If it concludes that the UK’s actions create an “imbalance” between its rights and obligations under the protocol, then the EU can take “proportionate rebalancing measures”.
These are not defined and would largely be determined by what the UK does.
The EU is understood to be preparing legal measures which, for example, could challenge the scope of the UK’s Article 16 actions.
Ultimately, the EU could impose tariffs on UK goods but that would only be possible after a lengthy arbitration process.
The arbitrators would first have to find that the UK is in breach of the protocol.
Then the UK would have to refuse to remedy that breach, at which point the EU could retaliate under the terms of the wider Brexit deal, the TCA.
It could require another arbitration process to rule whether the use of tariffs is proportionate retaliation.
There is a potentially faster legal track known as infringement proceedings which could lead to the UK being fined.
The EU could also take more informal political measures.
Can a confrontation over Article 16 be avoided?
The EU agrees that in some respects the operation of the protocol is causing difficulties for Northern Ireland.
It is preparing to bring forward a package of measures to improve its implementation.
Lord Frost is sceptical about whether they will go far enough, but it is possible that they could provide the basis for a negotiated settlement.