Thread by @pmdfoster

So. The #Brexit talks seem stuck. An extension is a no-no. A new cliff-edge looms. But what of the Irish Protocol that must be implemented deal or no deal? How will that work? Good Q. Here with @jimbrunsden I have some intel on EU thinking 1/Thread

ft.com/content/15e39d…

@jimbrunsden It builds on the 'technical' note that the Commission published after the opening round of talks last month - and paints a picture of a full-fat customs and trade border in the Irish Sea for goods travelling to Northern Ireland from Great Britain /2

ec.europa.eu/info/publicati…

@jimbrunsden EU dips were briefed on the idea - which the Commission says still hasn't been tabled formally to the Brits - that some goods which are not attracting significantly different tariffs might be exempt IF they can show products are for NI only. With monthly data submissions. /3

@jimbrunsden As @MichaelAodhan of NI Retail Consortium tells me, that latitude would be a welcome step if it exempted, say supermarkets that ship to lot of stuff to NI.

But make no mistake, we're still talking about a full-fat border...all goods to GB-NI must comply with vet/health & regs /4

Diplomats were told that the new regime would be a "significant change" from the status quo.

Brussels intends to interpret "widely" the clause that saying that all goods for "commercial processing" will be a "at risk" and therefore attract tariffs./5

Only materials that are being directly consumed by an end-user - say a part to repair a machine in a factory, a block of butter going to make a cake to feed workers in a canteen - will be exempted. /6

So on the one hand you can see some engagement here, some grappling with reality by the EU side (recall the UK hasn't submitted it's vision for this new trade border) but it is very strictly within the framework of a pretty full customs frontier in the Irish Sea. /7

We should recall WHY we have this protocol. Essentially @BorisJohnson ditched @theresa_may's "all UK" and left Northern Ireland behind to follow EU customs, State Aid and VAT rules, while GB was free to buccaneer. The price of freedom was this border. That was the basic bargain/8

@BorisJohnson @theresa_may The problem is that now it's time to make good on the bargain and build the border - which the EU says was made absolutely explicit to UK negotiators last October - the UK seem, to EU eyes, to resiling from their commitment. The UK, of course, doesn't see it that way. /9

@BorisJohnson @theresa_may The UK points out the Protocol creates a unique hybrid
- NI is in the UK customs territory still;
- any tariff monies will go the UK, so no fiscal issue
- lots of goods will flow tariff free, NI-only
- there is the unique UK (NI) designation

The point is, this IS different/10

@BorisJohnson @theresa_may Then there is also the question of "best endeavours" to keep trade running for NI businesses and the welfare of communities there, and the health of the Good Friday Agreement peace deal which - the UK argues - the EU seems to have rather forgotten in its approach. /11

@BorisJohnson @theresa_may Lest we forget this Protocol was born out of a desire to avoid a return to a border in Ireland (which Republicans would have rightly rejected) but the solution must also respect the Unionist half of the bargain. A full-on trade border in the Irish Sea wouldn't do that, say UK/12

@BorisJohnson @theresa_may Which is how you get to @michaelgove telling Peers this week that UK wants a 'risk-based' approach that 'hold in balance' the UK's need to operate its internal market smoothly. This - our transcript - is a neat summation of UK position. /13

@BorisJohnson @theresa_may @michaelgove Can these UK and EU positions be reconciled?

We'll see over the coming weeks as the UK starts to table its proposals and the EU responds, but there are serious problems, both substantive and political. /14

@BorisJohnson @theresa_may @michaelgove The substantive ones we've covered above, but in essence the Protocol does say that all goods going in NI should be compliant with EU Customs Code - that means vet checks, export summary decs, security decs etc. Even if UK does a 'zero/zero' tariff deal that isn't going away./15

@BorisJohnson @theresa_may @michaelgove As the FTA talks stall, this mountain only gets taller.

For EG, the UK has asked for an NZ-style vet agreement that cuts physical checks on animal origin products to 1% (a Canada-style deal =10% checks), but EU shows no signs of granting this given other UK positions. /16

As @MichaelAodhan from NI retail will tell you, export summary decs are more expensive/time consuming etc even than the Vet decs. Read his evidence to NI affairs Cmme on how little margin companies and consumers have in NI to absorb these costs. /17
committees.parliament.uk/oralevidence/3…

@MichaelAodhan But even bigger is the issue of TRUST - the British govt spend lots of January hinting it wouldn't implement the Protocol, or at least the EU 'version' of it.

The UK willingness to implement what it ratified is now a key good faith issue for all other negotiations /18

@MichaelAodhan The failure of @BorisJohnson and others to explain/own up to the 'deal' has further angered the EU side.

They see ideological acolytes like @ShankerASingham proposing totally solutions that basically ignore the protocol & there is zero confidence./19
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@MichaelAodhan @BorisJohnson @ShankerASingham If this all goes wrong, it has the potential to be very messy indeed.

If there is a 'no deal' on the FTA talks, then how will the UK 'implement' the protocol?

If it sticks to its 'light touch' vision, what will that do for Ireland's position in the Single Market?

@MichaelAodhan @BorisJohnson @ShankerASingham Look at this from Dublin's point of view? Your entire strategy is based on not becoming a second-tier, 'risky', 'yellow pack' member of the EU single market....and the actions of your potentially neighbour (with whom you have 'history') imperils that place? That's crisis time./21

@MichaelAodhan @BorisJohnson @ShankerASingham This entire thing needs NOT to come to that, but as explained above the two sides really are in fundamentally different spaces.

Let's hope when the talks actually start - nature abhors a vaccuum after all - that both sides find a way to make it work.

But it'll be tough. ENDS