What now with the Protocol?

In analysing the outcome of the Protocol negotiations, one has to look at the prime interests of the main actors involved.

1. The EU

The EU has no huge interest in N. Ireland. It is not a large market in the context of the Single Market as a whole. Provided NI doesn’t become a backdoor whereby contraband goods from all over the world can enter the Single Market, no major EU interests are at stake. The protocol had become a huge distraction at a time when the EU needs to focus on the Ukraine war, the refugee crisis, and the energy, cost of living and climate crises. Van Der Leyen will be pleased to get the Protocol off her to do list.

1. Ireland

Ireland has a lot at stake. The development of the all-Ireland economy, the further integration of supply chains, north and south, and the maintenance of good trading relationships with Britain are to Ireland’s advantage. 10% of Irish exports still go to the UK, although this is down from 55% at the time of EU accession n 1973. Given the land border is so porous, I would expect quite a lot of UK goods “intended for N. Ireland” ending up in Ireland. Nobody is going to mind too much, unless there is a dramatic divergence in standards, or if some of these UK goods end up on the EU mainland.

Some Irish companies may also try to avoid any controls which come into force at Liverpool by exporting through Larne instead, perhaps by setting up N. Ireland subsidiaries. A “grey market” may emerge of goods circulating between Britain and Ireland which may contain components or ingredients of unclear origin. If the volumes are small, blind eyes may be turned until there is some scandal. It’s unclear how problems will be resolved if they EU is unhappy that too many goods are leaking across the land border having been waved through the Green Channel at Larne.

There’s plenty of scope for future tensions and frictions if the Green Channel comes to be seen as a major smuggling route. This could continue to poison UK EU relations unless there is increasing trust that the Protocol deal is being implemented in good faith.

3. Northern Ireland

N. Ireland is currently effectively a satellite economy of the UK. The retail trade is virtually the fiefdom of a few near monopoly UK companies – Tesco, Sainsbury, Marks & Spencer, Boots etc. Some EU companies, like Aldi, Dunnes Stores and Musgraves have a small presence which may grow in the future, but for the moment they are bit players. Maintaining pre-Brexit supply chains is vital to maintaining those near monopolies for British companies. They will be most happy at the outcome of the negotiations.

4. The UK

The UK needs to regularise its relations with its major market, the EU. No doubt it will attempt to expand easements it achieved for exports to N. Ireland to extend to UK goods intended for the EU as well. A sort of Single Market membership by the back door. Sure, isn’t it working out grand in N. Ireland?

A lot will depend on the degree to which UK standards actually end up diverging from the EU. So far, in practice, there has been none. But for the moment the focus will be on improving UK/EU cooperation of issues like the Horizon research funding programme and improved access to EU markets for UK financial services. It remains to be seen how much the EU will concede on these issues. A lot depends on how well the Protocol deal is actually implemented and on how much trust builds up over time.

But coming to a deal is actually a big win for both the British government and Irish diplomacy within the EU, with the EU, once again, giving the Irish government more or less what it wanted. Sunak’s more pragmatic (and skilled) approach also gave the EU a partner they could work with.

5. The DUP

The big fly in the ointment is once again the DUP. I’m not going to waste much time speculating here on what they will actually do. I suspect huge pressure will now be applied, behind the scenes, by the UK government for the DUP to agree to the deal and allow the Assembly and Executive to be formed. Nationalist suspicions that the Protocol was actually just cover to prevent the DUP having to serve with a Sinn Fein First Minister will now be tested.

One way out might be for the DUP to call for fresh elections as an effective popular referendum on the Protocol in the hope that they could re-emerge as the largest party with the right of nominating the First Minister by effectively forcing TUV voters to vote for them. They could claim credit for the Protocol reforms and say they will reluctantly work the protocol, but only if the NI electorate approves the deal.

I think they could be disappointed with Sinn Fein remaining the largest party despite some DUP gains mostly from TUV voters, but the UUP and SDLP will continue to be squeezed in an election which then becomes, once again, largely about the symbolic prize of the First Ministership. But at least DUP pride will have been salved, and they may actually work the institutions – until the next crisis.

6. Sinn Fein

Although publicly welcoming the deal, privately, Sinn Fein will be disappointed. They had the DUP where they wanted them, effectively a thorn in the side of everyone but the ERG. The last thing Sinn Fein want is to be presiding over the implementation of austerity in Northern Ireland while criticising the Irish government for doing the same in Ireland. The First Ministership is a small consolation prize if it interferes with their main goal of winning the Premiership of Ireland.

In the short term, the deal is a feather in the cap for FG and FF, their main rivals for office in Ireland. Longer term, Sinn Fein will have mixed feelings if it actually results in the Northern Ireland economy gaining ground on the UK as a whole and undermining their “N. Ireland is a failed state” narrative. However the further development of an all-Ireland economy could also increase the common interests of businesses, north and south, and thus lead to further north south cooperation, and perhaps even integration.

It may not be the sort of united Ireland they want – one united around flags, anthems, Irish culture and politics. But an all-Ireland economy where workers of all stripes work together in companies serving the entire island could be to the benefit of all, while requiring no one to compromise their religious beliefs or national identity. It’s not what Padraig Pearse died for but may be all that the vast majority on this island will have to live for, for the foreseeable future.

In the larger scheme of things, the “Windsor Framework” may come to be seen as a sort of Good Friday Agreement for the EU and the UK as a whole, with mechanisms and precedents established for the resolution of friction points between the UK and EU more generally. The “Stormont Brake”, aka a petition of concern mechanism provides a basis for wider consensual flagging and resolution of issues.

Many will be concerned that the extension of cross community consent to include issues previously regarded as ‘reserved and accepted’ and subject could become a precedent for extending that requirement to a border poll. I don’t think there is any fear of that, as the 50%+1 requirement is enshrined in the BGFA. What it could do, however, is create a precedent for achieving much wider consensus on sensitive issues in a united Ireland, as it would help build confidence that unionist sensitivities will not be ignored.