Towards a trade war between Britain and the EU?

19 May, 2022

The attempted unilateral reform of the Northern Ireland Protocol may end in a trade war between Britain and the EU... for the time being.
The attempted unilateral reform of the Northern Ireland Protocol may end in a trade war between Britain and the EU... for the time being.

The British government announced yesterday a unilateral review of the Northern Ireland Protocol. The EU has responded immediately with a threat of sanctions. Beneath, the historic breakdown of balances between Northern Irish factions and the prospect of the annexation of Ulster by Ireland. The opening of a period of intra-European trade war could however be the prologue to a new phase of low-intensity wars on the continent.

Table of Contents

Where is this coming from?

Peace in Ireland is endangered by increasing contradictions between imperialisms in Europe, not by chilled sausages.
Peace in Ireland is endangered by increasing contradictions between imperialisms in Europe, not by chilled sausages.

Remember the “sausage war” just less than a year ago?.

The protocol signed between the EU and Britain as part of the Brexit left Ulster as part of the European single market to avoid putting border controls in place and to keep the terms of the 1998 Northern Ireland peace accords. In practice that meant putting customs at the ports and levying tariffs on trade between Northern Ireland and the rest of Britain.

As a result, any trade between the island of Great Britain and Ulster became an export. And any disruption on account of the Brussels trade rules, a provocation in which the trade dispute easily becomes an omen or threat to peace in Ireland.

That’s where the sausages come in. The EU does not allow imports of chilled meats. Until now, trade in sausages from England, Wales and Scotland to Ireland enjoyed a grace period during which the British government hoped to negotiate a derogation. But it has been unsuccessful vis-à-vis Brussels.

London’s response: unilaterally prolong the absence of controls… i.e. break the agreement. The Commission’s response: threaten retaliation to the point of suspending the entry of all tariff-free British products into the single market.

But we are talking about the island of Ireland. There are no purely commercial disputes. This friction comes on the heels of a slow rise in imperialist tension between Britain, Ireland and the EU as a whole and adds incentive to the breakdown of peace in Northern Ireland.

Northern Ireland peace and the sausages of wrath, 10/6/2021.

What has happened since then?

Alliance Party candidates in the Northern Irish elections
Alliance Party candidates in the Northern Irish elections.

Northern Irish unionism soon understood that the new situation, with Ulster economically integrated into Ireland, meant for them a medium-term condemnation to electoral marginality and the historic defeat of their positions. What they failed to understand was how their own resistance would accelerate the process.

At the end of the year, Unionism orchestrated some demonstrations of street violence to put pressure on London… which responded by threatening the EU with invoking Article 16 and denouncing the Treaty only to, once again, find a wall in front of it. In reality it would not have been enough for the Unionists either, their problem was not going to improve by the EU withdrawing 80% of the controls.

So the DUP, the main unionist party in Ulster, went to the next level by forcing a showdown with the British government and Brussels at the same time. In February the Irish Prime Minister, Giban, resigned, forcing the paralysis of the regional institutions and the calling of elections.

The move was dangerous to say the least, but the Unionists had little choice. DUP leader Jeffrey Donaldson summed up the situation by saying that it was clear to him that the protocol “represents an existential threat to the union [with Britain] and to the future of Northern Ireland within the United Kingdom.” He was right. But the election undoubtedly accelerated the process.

When voters went to the polls on April 7, the result was the victory, for the first time in a Northern Irish election, of Sinn Féin, which will place Michelle O’Neill as prime minister. In Brussels, the annexation of Ulster by the Republic of Ireland seemed a step closer and was celebrated with some discretion.

Why did Sinn Féin win?

Result of the elections in Northern Ireland

The time that has passed since the Good Friday Agreement has not gone in vain for the most dynamic part of the Northern Irish petty bourgeoisie. Benefited by booming trade and tourism, rewarded with grants and funded by subsidies from Brussels, the Northern petty bourgeoisie has made “being European” its way of life.

Brexit could only galvanize this group against London’s policies. Many of them, both Protestant and Catholic, joined the six million Britons who asked the Republic of Ireland to issue a passport. Although they mostly came from “moderate unionist” backgrounds, their projection is not identitarian. In fact, possible annexation by Ireland, as a stay in the EU, seems less and less dangerous to them compared to what they believe Johnson’s Global Britain and the Brexiters will bring them.

The political expression of this segment through the Alliance, a “cross-community” and citizens’ party, very focused on local politics and fundraising, has killed the Protestant “useful vote” for the DUP, which has been decisive for Sinn Féin, with the same results as in the last election, to become the majority political force in the region.

By triggering early elections, the DUP has actually precipitated a regional “new normality” in which Unionism as such, from the “moderate” UUP to the “hardliners” of the TUV, has only 36 seats out of 90. Irish nationalism, with 37, is aware that to achieve its ultimate goal, to win a referendum on annexation to the Republic, it must govern by seducing this petty bourgeoisie which is so weakly “national” and so attentive to the economic balance of public policies.

In the medium term, analysts and politicians are already eyeing the outcome. Sooner or later, London will cut the more than 14 billion euros a year with which it subsidizes the province. And if then, between Ireland, the regional government with a nationalist majority and the EU, they manage to present themselves as a sustainable alternative over time, the die will be cast. A long standoff lies ahead.

The unilateral reform of the protocol now being sought by the British government is part of the first act.

Why does the Johnson government now want to reform the protocol?

First of all to please the DUP, which, in the face of a poor election result, seems to be entrenched in its strategy. The leaders of the party have promised not to enter the government if the protocol is not modified. Johnson cannot risk being held responsible for a new era of instability – and perhaps violence – in Ireland by sheer inaction.

But the underlying problem is that the current orientation of the British bourgeoisie pushes for the rapid dismantling of European regulations that remain in force as local laws. They look to the US and intend to benefit from preferential treatment as Washington’s partner in third markets remaining in the US bloc. To put it bluntly: they hope to enter wherever China leaves. Or rather, where the US takes China out. And for that, European standards are a price-increasing burden. So, they are left behind.

But that regulatory difference would definitely alienate British products from the Ulster market. They would simply have to pay EU tariffs to enter Northern Irish ports. Not that Ulster is a massive market, but the total economic integration between the two parts of Ireland that would suddenly make everything British more expensive would accelerate the process towards annexation by Dublin.

Is that what Britain signed up to as part of Brexit? Yes. But now it wants to resist the consequences. And the only way it can do that is to free from customs at least those products that only supply the local market.

So London wants to create a “new dual regulatory regime” to allow companies that meet only the new British standards to enter Northern Ireland freely, without customs, on the promise that their goods will not cross into the Republic.

The EU’s response is that it does not trust a model that relies on “trusted suppliers” to be determined by London and that it will not allow agreements to simply break down. Brussels, which is convinced that London fears a trade war, has threatened retaliation on all its imports from Britain if Johnson unilaterally imposes any protocol reforms.

How far can Johnson go?

Unionist violence in Ulster in April 2021. First serious sign of the precariousness of peace in Northern Ireland after Brexit.
Unionist violence in Ulster in April 2021. First serious sign of the precariousness of peace in Northern Ireland after Brexit.

In Dublin, analysts and the government think Johnson is buying time. The announced legislation could take a year to pass. In the meantime, the DUP would “progressively” return to the institutions as the legislative process went through its paces. Johnson could maintain a semblance of “business as usual” while trying to get something more out of the European negotiators. Something that would, perhaps, further content a DUP weakened by a hard life in opposition.

It is wishful thinking based on a tactic that has not worked out well so far vis-à-vis the EU and on a DUP performance that does not seem likely or consistent with its trajectory.

And as if the chances of success were too great, Johnson intends to return to British justice the control of VAT collected in Northern Irish ports, bypassing the European Court of Justice. A real red line for the EU, which already accepted, at the last minute of the Brexit negotiations, that customs agents and police should be exclusively British; but which cannot accept something that would imply modifying – unanimously by the member states – its own treaties.

This being the case, it is inevitable to wonder whether Johnson is buying time or arming a time bomb. The contradictions generated by Brexit are not going to halt their course. On the contrary, the more he tries to stop the clock by means of blows of effect and threats, the closer he will be to the rest of the participants opting to see his bluff or play their own game.

This very morning, O’Neill was willing to do so. According to the Sinn Féinn leader in the North, the “bad faith” actions of Downing Street already put on the table the need for the “reunification” of the island. Throughout today, Unionism is expected to respond by raising the tone in turn.

The problem is that the only gamble the DUP could play to polarize the Northern Irish petty bourgeoisie around the nationalist divide would open the door to the return of the paramilitaries and diffuse terror.

And if Brussels sees the threat of unilateral change of protocol we would be in for a trade war. In fact, if we listen to the Irish press, which has predicted the British government’s moves quite well so far, we would already be “on the road to a trade war”.

The answer to “What could go wrong?” is… everything.

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