The UK and European Union are close to a major breakthrough in their months-long spat over post-Brexit trading rules in Northern Ireland, which has threatened at times to escalate into a full-blown trade war.
The EU has begun testing the UK’s live database tracking goods moving from mainland Britain to Northern Ireland, people familiar with the matter said. If the bloc is satisfied, it could pave the way for an agreement on customs checks in the Irish Sea that are a major source of tension between the two sides.
The pound rose, trading around $1.159 at 5 p.m. in London.
It’s a development that fits the recent improving mood music surrounding the negotiations on Northern Ireland, which restarted in October following an eight-month stalemate. Prime Minister Rishi Sunak’s government hopes a deal will in turn defuse tensions in the region and help to restore a working government.
Irish Foreign Minister Simon Coveney said Tuesday he detects “a real intent in London” and that a negotiated settlement is “doable” by the end of the year.
Live trade data will not resolve every aspect of the dispute. Another major point of disagreement remains over the governance of Northern Ireland, for example, with the UK demanding that the European Court of Justice be stripped of its role in settling Brexit disputes in the region. That’s a red line for the EU.
But resolving checks on goods is seen as prerequisite to move onto other thorny issues. The dispute stems from the original Brexit deal, when both sides agreed that to avoid a land border on the island of Ireland, there would effectively need to be one in the Irish Sea and that Northern Ireland should also remain in the bloc’s single market.
A spokesman for the European Commission declined to comment on the data tests. The UK’s foreign office didn’t immediately comment.
Border Dispute
The EU has long said it needs access to real-time, detailed data to protect its market border and triggered legal action against the UK in June, saying it wasn’t providing the relevant statistics. Meanwhile, the British government has argued that the checks are too onerous and have disrupted trade.
The political impasse within the region is further complicating the issue. The Democratic Unionist Party wants the so-called Northern Ireland protocol scrapped from the Brexit deal to be replaced and is refusing to take its place in the power-sharing administration until that happens.
Much therefore depends on the EU’s verdict on the British trade data, which the bloc’s officials are due to spend the next few weeks testing, the people said. UK officials say the system has been ready for some time and they’ve made the tweaks requested by the EU since it began legal action.
Maros Sefcovic, the EU’s chief negotiator, said Monday the bloc needs “real-time and workable access” to the UK’s IT databases for talks to move on.
