Loyalist marching season was quiet, but trouble over Northern protocol may lie ahead

The Twelfth of July and its aftermath, and right up to now, was rather like Sherlock Holmes’s dog that did not bark, or more appositely the Lambeg drum that was not banged.

Before the summer there were fears that loyalism and a considerable body of unionism were so incandescent with fury over the Northern Ireland protocol that it would translate into loyalist paramilitaries exploiting the marching season to unleash their anger through protests and violence.

The marching season still has a bit to run, but, thankfully, so far the drums have not been sounded to summon anti-protocol loyalists to the streets.

Equally it cannot be forgotten that there was anti-Irish Sea border loyalist disorder in April and that there is still simmering resentment over the protocol. Unionism and loyalism, whether exaggerated or not, see constitutional threat, and that can be incendiary even if their anger was fairly quiescent over the summer

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However, it is not too long to the end of September when the second grace period that allows most but not all goods shift reasonably smoothly across the Irish Sea is scheduled to run out.

Now the urgent challenge is for the politicians, and primarily the British government and EU, to forge a deal ahead of the end of that grace period to ensure the bad blood over the protocol is not stirred again.

A lot is riding on what happens over the coming seven weeks or so. Many groups are anxious about what is coming down the line – the big stores, farmers, factory owners, hauliers, garden centres, exporters and importers.

If the drums were silent the politicians were not over this summer. In July the British government demanded a new deal on the protocol, which, naturally, prompted divided political responses in the North.

The new DUP leader, Jeffrey Donaldson, described it as a "significant first step", while Sinn Féin's Brexit spokesman Declan Kearney insisted the protocol must not be "hollowed out" by London.

In short the DUP, the Ulster Unionists and the Traditional Unionist Voice party reject the protocol; Sinn Féin, the SDLP and Alliance, with a little nuance, contend it is the only way forward.

Equally, Boris Johnson and British Brexit minister Lord (David) Frost insist the protocol must be redrawn, while the EU retorts that London must abide by the protocol it formally agreed with Brussels, even if it is prepared to allow for some tinkering with the mechanism.

Hanging over all this is the British nuclear option, so to speak, of triggering Article 16 to suspend the protocol on the grounds that it causes “economic, societal or environmental difficulties”.

Which is where the battle lines are drawn for the moment. Combat, however, is due to resume relatively soon, particularly through September when politicians and the EU and UK start flexing their muscles again after their traditional August holidays.

But in the meantime it is regular business and industry in the North that is taking the collateral damage from all the political fighting.

Business in mind

Aodhan Connolly, who represents a myriad of Northern Ireland retailers from the local convenience shop to the big supermarkets, said what the Northern "business community wants is stability and certainty, and a long-term workable solution that is designed with business in mind".

"Until we get that we need flexibility from both sides," added Connolly, who is director of the Northern Ireland Retail Consortium.

He said currently business is in a “holding pattern” while preparing for October, when an avalanche of new bureaucracy and associated costs is due to land on companies bringing in goods to the North from Britain.

He tentatively indicated that first and foremost preventing that landslide might require another extension of the grace period into 2022.

“The main thing that we need first is some breathing space to find a permanent solution,” said Connolly. “We can’t continue to put sticking plaster on things when surgery is needed. If we could get that standstill or if we could get something to allow us to breathe and get Christmas over us and get a new system in place that would be the biggest gift both sides could give us.”

Agreeing that system is proving immensely difficult, however.

The British command paper published in July seeks the removal of all customs formalities for goods moving from Britain to Northern Ireland unless they are explicitly listed to cross the Border into the Republic and therefore into the EU’s single market.

Similarly, the British government wants sanitary and phytosanitary (SPS) checks and certificates only to apply to agri-food products clearly at risk of entering the EU single market.

London also wants a dualregulatory system whereby products approved in Britain but not in the EU could circulate in the North whereas under the protocol such goods must comply with EU standards.

Its list of demands is long. It also seeks to remove the European Commission and the European Court of Justice from having a role overseeing how the protocol works. Instead it wants an international arbitration system to deal with any problems.

Renegotiate

The EU said it was open to “creative solutions” but that it would not renegotiate the protocol it believed Britain effectively was seeking to dismember rather than modify.

In the no-man’s -land of this battle are Northern Ireland’s businesspeople.

“The frustrating thing for business is that we can see the solutions but we can’t see the political will to deliver them,” said Connolly.

To that effect a group of Northern Ireland organisations such as Connolly’s retail consortium, Manufacturing NI, the Chamber of Commerce and Industry, the Confederation of British Industry in the North and the Ulster Farmers Union has sent a 12-page set of proposals to the British government and the EU on how the impasse might be broken – and is waiting on a response.

A lot of the paper is technical but two of the major proposals are the implementation of "trusted trader" schemes to assist supermarket chains taking goods in from Britain; and a veterinary agreement, which this group, and also the Irish Government, argues would do away with 80 percent of the SPS checks on goods coming from Britain to Northern Ireland.

The British government and Lord Frost, however, in relation to the veterinary proposal, are adamant that this would undermine what Brexit was all about – the mantra of "restoring British sovereignty". It seems a good partial solution but for the moment at least London won't go near it.

There have been some empty supermarket shelves in the North but nobody is going hungry over the protocol. There also is a suspicion that the British government is over-egging how serious is the problem. For many British exporters to the North it is business as normal.

Subtle pressure is being applied ahead of the big contest. This week it was made public by London that such are the EU conditions on medicines moving to Northern Ireland across the Irish Sea that the British government was formally notified by suppliers that up to 300 medicines no longer will be transported from Britain to the North after the current grace period ends.

Hardballing

That sort of hardballing is likely to continue over the coming period as the EU and UK push ahead with their brinkmanship game. But there are dangers in such an exercise in call-my-bluff because if ultimately Johnson executes Article 16 then the EU-UK Brexit deal could totally unravel.

According to Connolly and Stephen Kelly, chief executive of Manufacturing Northern Ireland, better a deal done now or in the coming weeks. They want both sides to steer away from "ideological positions" and cliff-edge negotiation and strive for compromise. They worry about the hits their members are taking.

Kelly said that industries in Northern Ireland that need supplies from Britain are experiencing difficulties because of all the red tape. He said one in five of members surveyed said British companies told them they were no longer willing to supply them. “This has created no end of aggravation and pain.”

But he also pointed to the “huge opportunities” that are on offer and that his members are starting to grasp. Under the protocol Northern Ireland is in the enviable position where it has unfettered access to two of the biggest markets in the world, the EU’s and Britain’s. It is a considerable advantage but is being overshadowed because of all the squabbling.

Nonetheless, some progressive Northern Ireland companies are engaging in their own marketing to EU countries to convince them of that benign element of the protocol. That message is beginning to get through. “All the reports that we have from our exporters is that they have never been busier,” said Kelly.

In addition, he added, Invest Northern Ireland recently reported a significant increase in foreign companies interested in setting up in Northern Ireland because of that access to two major markets. Personally he was aware of one company considering a £100 million investment that could create 500 jobs.

Invest NI confirmed to The Irish Times that currently it has “over fifty live inquiries” about establishing industry in the North, while stressing that from first contact to set-up of a factory can take a considerable period of time – another reason why the dual EU-UK market access has not developed the publicity or traction it deserves.

But this proved, said Kelly, that there are big opportunities for Northern Ireland industry and they must not be lost through British or EU intransigence.

Legal action

Connolly saw some grounds for optimism. Like that dog that didn’t bark he said there should be concentration on what “didn’t happen”: in that “the British government did not press Article 16 and the EU didn’t go ahead with their legal action” against Britain on the protocol. That action was paused just over a week ago.

“That in itself, plus the conversations we have had with both sides where there is a realisation of the problems, leads us to be, if not optimistic, a little bit more hopeful than we were,” he said.

Kelly, conscious how politically and on the streets the protocol still has the potential to flare up and wreck the current opportunities, warned that the ominous drumbeats could be sounded again if this grace period concludes without agreement.

“The number one factor for any investor is political stability, and a blind man could tell you we don’t have that at the moment in Northern Ireland,” he said.

Pragmatism and compromise from both sides, he said, and a willingness to devise a solution “that is unique for Northern Ireland” must be the watchwords in the coming weeks.