Thread by @SamuelMarcLowe

Some thoughts on the new Johnson deal, particularly on customs elements (others are better placed to discuss consent). Many suspected Johnson’s inevitable landing zone was a Northern Irish specific solution – this has turned out to be the case. 1/x

Yet we no longer have a backstop or insurance policy, dependent on the future relationship, instead we have a permanent solution for NI. Also, the notion of ‘alternative arrangements’ as a conceptual solution for the land border is now dead and buried. 2/x

NI will remain in the EU’s regulatory area for industrial products and agrifood. On customs, while NI will be in the UK’s customs territory, it will apply the EU union customs code at its ports of entry and EU tariffs on goods entering from GB or third countries, unless … 3/x

... the goods are personal property imported into NI from GB; or the goods are final products (so not an intermediary good destined for a factory) and fulfil the criteria set out by a Joint Committee. The exact criteria is tbc, but will take into account:

In these specific cases UK tariffs will apply. So goods entering NI from GB will not be subject to any duties, and goods originating in third countries with which the UK has a FTA will be able to qualify for preferential tariff treatment. 5/x

(The UK will have the ability to refund Northern Ireland importers upon confirmation a higher duty is paid than was warranted.)

6/x

In English: goods imported into NI from GB will have EU tariff applied unless importer can demonstrate final point of sale is in NI or the product is considered to be low risk from a smuggling perspective (eg a product to which both the UK & EU apply a tariff rate of zero). 7/x

But what would this mean? In practice, Northern Irish manufacturers and farmers will have better access (although not entirely the same as now) to the EU than their competitors in England, Wales and Scotland.

8/x

This does not mean NI will not take an economic hit from Brexit, but relative to the rest of UK (if Boris succeeds in his ambition of a fairly basis EU-UK FTA) it will become relative unique as a territory with preferential access (for goods) to both the EU & UK market. 9/x

The EU has ensured it did not breach any of its fundamental red lines, but it did compromise. This customs arrangement is far from their preferred outcome, and does create a potential smuggling risk. It can be viewed as a Johnson negotiating success by the UK. 10/x

From a UK perspective, it frees up Johnson to negotiate a basic FTA with the EU, and negotiate new FTAs with the US and others. Whether this is a positive or not depends on perspective. 11/x

And of course the nature of the future relationship will be decided over the coming years, and will depend on who is doing the negotiating.

12/x

It seems unlikely that this deal will pass Parliament on Saturday. But that does not mean it will never pass. We now know the Johnson landing zone: NI-specific solutions; maximum freedom for GB. And it shouldn’t come as a surprise to anyone.

12/12

It has been brought to my attention that I missed something. Irrespective of whether joint committee has determined a product to be exempt from EU tariffs, the UK can effectively waive EU tariffs on goods brought into NI up until the point de minimis state aid thresholds are hit

In effect, the UK 'pays' the EU tariff for NI importers from GB up until a fixed sum of money has been paid to an individual importer. For most this means no matter what happens re: joint committee discussions GB-NI trade will remain effectively tariff-free.

So in English: even when EU tariffs are due on imports into NI, for whatever reason, the UK 'pays' them (by not levying them) up until the point UK hits relevant state aid limits.