The Merchant of Brussels

We all know the plot of the Merchant of Venice. Antonio needs money in a hurry to finance his global trading ambitions and signs a contract under which Shylock can have a pound of his flesh of his choosing if he fails to repay the loan on the due date. Come the date, his ships are not back. He cannot repay the loan and the contractual text allowed Shylock to select Antonio’s heart. The sub-plot is that Shylock hates Antonio who went to the Venetian equivalents of Eton and Oxford and sees this as an opportunity to wreak vengeance. When Antonio’s friends offer to pay off the loan at many times its value, Shylock refuses. He insists that the contract was freely signed by Antonio and must be implemented to the exact letter.

Clearly it would be ridiculous to suggest that Shakespeare anticipated the Irish Protocol negotiations by 416 years, or that our Prime Minister resembles Antonio in any way, or that the EU are seeking to penalise the UK for leaving the club. Nevertheless, the parallels are there and it is interesting to recall how Shakespeare resolved the irresolvable.

The Irish Protocol was devised to avoid customs posts on the border between Northern Ireland and the Republic. It may be a small island but the border is longer than that between France and Germany and more difficult to police, although customs border posts worked perfectly well for 70 years from 1923. The idea that reinstating them would infringe the Belfast Agreement is a myth invented by Dublin; nothing in that Agreement envisages Brexit.

So, a Protocol which would allow free trade between the north and south of the island is clearly a good idea especially as the master trade agreement stipulates tariff free trade between the EU and UK. Free trade within the UK, i.e. between Britain and Northern Ireland, was so obvious that it hardly needed stating so the PM affirmed there would be no border in the Irish Sea. Unfortunately Shylock’s clerks could not grasp how Northern Ireland could be part of the EU customs union, observing all its rules and regulations, at the same time as being part of the UK customs union with rules and regulations which were expected to diverge from the EU’s. Tariffs are not the issue; non-tariff barriers are.

Furthermore, the drafting clerks had a tenuous grasp of UK geography. They seem to have confused the Isle of Man, which is not part of the UK, with Northern Ireland, which is. When the PM read the draft Protocol, if he read it at all, the absence of the obvious would not have worried him any more than it worried Antonio.

Given the total commitment of the Merchant of Brussels to the signed text of the Protocol, it is no surprise that suggestions of “flexibility” and “pragmatism” fall on deaf ears. Brussels views rather trivial extensions of detailed matters, such as sausages, as hugely magnanimous and the British negotiators take credit for any crumbs they can get. That approach will not solve the fundamental problem and it was not a route that Portia, an intelligent woman, chose to take. She played Shylock at his own game: he insisted on the letter of the contract, that, no more and no less. So be it: he could take a pound of flesh but not a drop of blood.

So where, in the 63 pages of the Protocol, is there the equivalent of the drop of blood? If that can be found and cause the Protocol to collapse, another could be drawn up to meet the requirements of both the EU and the UK. The negotiators spent weeks looking for that and probably missed it because it is so obvious. We can come to that later.

The drop of blood equivalent arises from the Protocol’s uncertainty about whether Northern Ireland is part of the United Kingdom, or merely involved in a shared customs union. This is a key point because the Protocol sees Northern Ireland as becoming part of the EU customs union but does not claim it is part of the EU.

Some Protocol clauses imply that Northern Ireland is indeed merely linked to, but not an integral part of, the United Kingdom. For example, one of the introductory clauses:

“RECALLING that Northern Ireland is part of the customs territory of the United Kingdom and will benefit from participation in the United Kingdom's independent trade policy,”

And Article 4 of the Protocol:

“Article 4: Customs territory of the United Kingdom:

Northern Ireland is part of the customs territory of the United Kingdom. Accordingly, nothing in this Protocol shall prevent the United Kingdom from including Northern Ireland in the territorial scope of any agreements it may conclude with third countries, provided that those agreements do not prejudice the application of this Protocol. In particular, nothing in this Protocol shall prevent the United Kingdom from concluding agreements with a third country that grant goods produced in Northern Ireland preferential access to that country’s market on the same terms as goods produced in other parts of the United Kingdom. Nothing in this Protocol shall prevent the United Kingdom from including Northern Ireland in the territorial scope of its Schedules of Concessions annexed to the General Agreement on Tariffs and Trade 1994.”

This confusion about Northern Ireland being fully part of the UK seems to be widespread amongst continental politicians. If one was to take a “pragmatic” view of implementing the Protocol then these matters would be swept away but if one takes the Shylock enforcing the literal approach, as the EU does, then the confusion undermines the very essence of the contract. The Protocol is a contract between two legal entities, the UK and the EU. If Northern Ireland is not an integral part of the UK, it is a separate country and not bound by the Protocol. Note that no Northern Ireland politicians were involved in the original Protocol negotiations, nor the renegotiations since. When I queried this with the Secretary of State for Northern Ireland on May 21st, he said it was nothing to do with them; it was purely a matter for London and Brussels.

Whether or not a judge would agree that this issue is enough to void the contract, is debatable. The case is certainly not strong and it may be regarded as academic because the need for a better Protocol is far more important. The relationship these days between Dublin and Belfast is pretty good and it is far more likely that they could not only find a solution but believe they own it. How much loyalty did London imagine Ulster politicians would give whatever Protocol London negotiated if the Ulster politicians were excluded?

At present the DUP focuses on the removal of the present Protocol when its replacement by a workable Protocol of some sort, one that meets the needs of the two parties in Ireland as well as the UK and the EU, is of far greater importance. Northern Ireland being in the two competing customs unions at the same time would be feasible if the UK regulations apply to goods supplied from Britain for consumption in Northern Ireland, whereas EU regulations apply to goods created in Northern Ireland for consumption in Northern Ireland or the EU. The contentious issue has been goods supplied from Britain to Northern Ireland intended for the Republic, or at risk of being consumed there. As it happens, the Republic makes plenty of its own sausages, similar to UK ones but of a different shape. There is minimal, if any, demand for UK sausages in the EU.

This problem could be solved by shipping all goods intended for the Republic, directly to the Republic, and labelling goods intended for Northern Ireland in a way that would make them unsaleable in the Republic, e.g. priced in sterling not euros or marked “For sale in Northern Ireland only”. It should be a matter for EU trading officers to deal with offenders within the EU, not a matter for UK officials.

No doubt Portia could make a better job of unravelling this matter than I have. What should be obvious to the negotiators, but seems not to be, is that the Protocol is fundamentally unfair and will cause serious trouble unless they stop tinkering and replace it with something sensible. By the way, Antonio’s ships did eventually return and he lived happily ever after.