Scotland's place in Europe: assessment of UK Government's proposed future relationship with the EU

4. Implications of the ‘Northern Ireland Backstop’

42. The Withdrawal Agreement contains provisions which are designed to ensure that, if no future relationship agreement which will deliver an open border on the Island of Ireland is reached within the transition period, there is a backstop in place to avoid such a ‘hard border.’ By hard border, we mean any kind of checks or controls on people or goods crossing the border between Northern Ireland and the Republic of Ireland. In December 2017, both the EU and the UK Government committed to ensuring that, in keeping with the Good Friday Agreement, there would be no such physical border controls in place on the island of Ireland. At the same time the UK Government has committed that there will be no new barriers between Great Britain and Northern Ireland to ensure continued unfettered market access for Northern Ireland products in Great Britain.

43. The draft Withdrawal Agreement makes clear, if there is no agreement reached on the future EU-UK relationship by 31 December 2020, and there is no agreement to extend the implementation period, the backstop solution will apply unless or until an agreement is reached which would address the unique circumstances on the island of Ireland, avoid a hard border and protect the Good Friday Agreement. This will lead to the creation of a single EU-UK customs territory or “bare bones” customs arrangement which excludes fisheries and aquaculture. In contrast, the draft text provides for a far deeper model of integration in respect of Northern Ireland.

44. The UK Government has presented the agreement as protecting the constitutional integrity of the UK and ensuring frictionless trade until such point as a future partnership between the UK and the EU is established. However, the arrangements for the “customs territory” between the UK and EU are limited in primarily addressing only the risk of tariffs or quotas on goods between the EU and the UK, (with the exception of fishery and aquaculture products). As illustrated in the European Commission’s slide on customs controls,^[23] customs cooperation is complicated and truly frictionless trade requires a wider set of measures, including security and safety controls at the border, financial controls and market surveillance at the customs office of import.

45. There is a significant gap between the bare bones customs union proposed between the EU-UK territories and what is necessary to truly facilitate frictionless trade, and this is made evident in the number of specific arrangements for Northern Ireland. To allow Northern Irish businesses to place products on the EU’s internal market without restriction, the Union's Customs Code will continue to apply in respect of Northern Ireland only. It also ensures that Northern Ireland will remain aligned to the European Single Market in respect of: legislation on goods, rules for veterinary controls, rules on agricultural production and marketing, VAT and excise duties in respect of goods, and state aid rules. While these commitments are still less than full single market alignment, and crucially do not cover services, they still represent a significant differentiation between the commitments of Northern Ireland and the rest of the UK, with consequently a closer relationship for Northern Ireland. There are also a wide set of provisions that address a number of other unique circumstances on the island of Ireland, including North South Cooperation in areas of environment, health, agriculture, transport, education and tourism as well as areas of energy, telecommunications, broadcasting, inland fisheries, justice and security, higher education and sport.

46. The clear advantages to Northern Ireland of this deeper relationship are further evidence that the Scottish Government’s proposals for continuing full membership of the Single Market and Customs Union are far preferable to the deal negotiated by the UK Government. The facilitation of unfettered access for Northern Ireland businesses to the EU and UK internal markets for goods and commitments, and cooperation in a range of service sectors, comes close to the kind of legal certainty and assurance that we have been seeking for Scottish business, at least in respect of goods. However, as the Scottish Government has made clear from the outset, in our view the best way to provide the legal certainty so desperately sought by business and to address the unique situation of the island of Ireland is for the UK as a whole to remain in the customs union and single market.

47. While the Withdrawal Agreement sets out that these rules are a backstop only, and do not create a permanent relationship between the EU and the UK, the timescale to agree a future relationship by December 2020 is hugely ambitious and rely heavily on sophisticated technological solutions which will take time and expense to implement.^[24]. Therefore, particularly taking into account the refusal of UK Government to contemplate a UK wide approach to EU single market membership and a customs union with the EU, it seems likely that the arrangements set out will take effect for some period of time locking the UK into a two-tier system of access to the EU market for an indefinite period. Indeed, despite more than two years of effort, there is no sign of a realistic proposal, other than membership of Single Market and Customs Union, that would achieve a frictionless border, and allow the backstop to be switched off. The Scottish Government fully and unconditionally supports the Good Friday Agreement and the maintenance of an invisible border on the island of Ireland. However, we also firmly believe that if the UK is determined to pursue a more distant relationship with Europe, there should be an extension of the principle of differentiation established in the draft Withdrawal Agreement in respect of Northern Ireland to other parts of the UK. This is essential to safeguard Scotland’s and the UK’s wider interests.