I thank the Chairman for this opportunity to be here today. It is an honour to appear before the committee.
Whatever form it may eventually take, Brexit has profound implications for human health on the island of Ireland and for Irish citizens in Great Britain. In this opening statement, I will provide an overview of the two most important legal frameworks regarding Brexit. First, I will comment on the revised Northern Ireland-Ireland protocol and the revised political declaration from this October. Second, I will review the 2019 memorandum of understanding on the common travel area between Ireland and the UK. Professor Hervey will then delve into the more specific issues pertaining to health.
The withdrawal agreement is the instrument under which the UK leaves the EU. This, as the members of the committee will know, is phase I and it is governed by Article 50. It does a number of things, including setting up a governance structure in Title II. The joint committee and its specialist committees operationalise the withdrawal agreement and it should roll over into phase II if at all possible in order to ensure a smooth transition.
The revised political declaration sets out a preliminary roadmap for that next phase of negotiation under Article 218 of the Treaty on the Functioning of the European Union. Phase II will be much more involved legally. Trade deals are, to state the obvious, complex. The timeframe for negotiation of phase II – the transition period - is up to the end of 2020 with an extension of another two years possible under the withdrawal agreement. During this phase the UK will be outside the EU but will continue to apply the EU rules. If there is no agreement there will be a fallback to World Trade Organization rules. One particular exception to this is that the parties aim to have a system in place to allow transfer of data and data protection rules in place by the end of 2020, according to the political declaration.
One of the reasons - I am moving on to page 5 - it will take time to develop and bed down the new trade relationship is that, unlike withdrawal, it is likely to be what is known as a mixed agreement. The member states have to agree to it as well as the EU. The member states have to agree to an international agreement according to their own constitutional traditions. This could mean up to 44 parliamentary chambers across the EU having to approve that agreement; obviously, it is complex. If there is no future trade agreement we are not out of the thicket regarding a hard Brexit yet.
With respect to the revised Northern Ireland-Ireland protocol, the main changes of the revised protocol are that: the infamous backstop has now been superseded; the UK is much freer to enter into trade deals as it will not be in the customs union; the Northern Irish land Border will at last remain invisible; and Northern Ireland will be part of the UK customs territory and of the EU customs regime.
Members should note the legal status of the protocol. Protocols have the same status as treaty provisions. They are simply more self-contained and focus on specific issues. That was one of the reasons it was possible to reopen that part of the withdrawal agreement. The EU is not keen on opening it much beyond that.
Regarding the trade rules under the new protocol, Northern Ireland made up between 10% and 12% of total exports from Ireland to the UK and between 7% and 8% of imports between 1996 and 2016. Northern Ireland only has 3% of the population of the UK. That shows the extent to which there is a depth of integration in respect of the two markets, mainly relating to agriculture and food products. This integrated trade pattern will be able to continue under the new protocol.
In essence, the EU and UK customs unions will co-exist in Northern Ireland. I have a vision of a Venn diagram in my mind and the overlap between the two circles is Northern Ireland. When goods go from Great Britain to Northern Ireland and do not enter the EU, a system of rebates will be given to the Northern Ireland trader. The challenge for this new regime is a risk of leakage from Ireland to Great Britain via Northern Ireland or from Northern Ireland to Ireland and the EU of non-EU goods without the payment of relevant tariffs or compliance with relevant EU or British standards. To address this, there is a specialist committee on implementation of the protocol. It will set the criteria for considering that goods brought into Northern Ireland from outside the Union are not at risk of subsequently being moved into the Union. The four criteria the committee will consider are the final destination and use of the good; the nature and value of the good; the nature of the movement; and the incentive for undeclared onward movement into the Union, in particular in respect of payment of duties. This exercise will start immediately once the protocol is signed.
The protocol itself states that the EU rules on the Single Market on VAT and standards will all apply in Northern Ireland. A new kind of origin labelling will be introduced, which will be "UK (Northern Ireland)", to indicate that the good has come from Northern Ireland and has a special status. Inspections to ensure compliance with EU standards will be carried out vis-à-vis Northern Ireland by British officials. Safeguards will be able to be introduced where the application of the protocol could lead to serious economic, societal or environmental difficulties. In respect of governance, the terms of the protocol continue after four years if a majority of the MLAs in Stormont are present and vote to continue. If there is cross-community consent, which is a technical term defined within the protocol, the protocol will continue for eight years.
The main changes between this new protocol and the previous protocol is that the UK is no longer within the customs union. Northern Ireland is where British and EU customs and regulatory standards meet, and the arrangement will continue as long as the Northern Ireland Assembly continues with its periodic voting. There will be no physical border much beyond what we have today, with occasional spot checks, number plate reading, etc. The UK will undertake tax collection for the EU and there will be checks on goods in Great Britain going from there to Northern Ireland and vice versa. The myth of technical solutions to a physical land border has been laid to rest.
On the revised political declaration, the declaration addresses the principles that will frame the future relationship. That is all that is required under Article 50, and it has to be read in light of the EU and UK obligations as members of the World Trade Organization, WTO. It is aspirational. I lost track of the number of times the word "ambitious" is used. It gives an indication only of future direction. It is trite to say that it is not clear what an ambitious trading relationship will ultimately look like. We know that each of the two unions will have separate markets and distinct legal orders but envisage comprehensive arrangements to set up a free trade area, with deep regulatory and customs co-operation and a commitment to a fair playing field.
On regulation, the aim is to go beyond WTO rules in respect of technical barriers to trade and what is known as sanitary and phytosanitary measures. The extent to which the UK will co-operate with agencies such as the European Medicines Agency and the European Chemicals Agency is to be explored, but that is as far as it goes. There is no commitment beyond that.
In respect of services, the commitment is to go well beyond WTO commitments. The hope is to draw on recent EU free trade agreements with substantial sectoral coverage in line with Article V of the General Agreement on Trade in Services, GATS. Specific mention is made of professional services but not health services. The problem is that there is very little law on Article V of the GATS so its exact meaning and scope are unclear.
The new regime will address market access and non-discrimination under host state rules for service providers to allow temporary entry. This would allow, for example, physiotherapists, dentists or other self-employed health providers to operate to some degree in both systems.
The intention is to develop intellectual property rights protections that go beyond those found in the WTO regime. Each party, however, will determine its own exhaustion of rights arrangements. This could allow different licensing regimes to emerge in the UK and the EU.
For now, the only certainty we have in respect of the future trade relationship is that there will be change and, inevitably, greater administrative and other costs for the EU, Ireland, Great Britain and Northern Ireland.
On the common travel area, CTA, this is a free movement arrangement between the UK and Ireland, as I am sure the members are aware, with reciprocal and associated rights. The great thing about the common travel area is that it significantly softens the implications of Brexit for Irish and British citizens resident in the other state. The Northern Ireland-Ireland protocol and the political declaration expressly allow for the UK and Ireland to continue with and develop the common travel area, subject to fully respecting the EU law rights of natural persons. The common travel area was not written down until this memorandum of understanding last May and it remains a legally non-binding but flexible arrangement to which both governments have expressed their commitment. Needless to say, if it is not legally binding, goodwill is critical for its ongoing operation.
The rights and privileges that are listed are, for example, the right to work; to be self-employed; social protection; social housing; education; and voting rights in parliamentary and local elections. Specifically, in respect of education and work, the memorandum of understanding notes that recognition of qualifications are essential to facilitate the right to work. The governments commit to ensuring comprehensive measures to be in place for recognition, covering all relevant professions. The CTA also gives citizens the reciprocal rights to access emergency, routine and planned publicly-funded health services. It only applies to Irish and British citizens and does not extend to EU or non-EU citizens resident in Ireland.
Another point to note is that some common travel area rights enjoy legal protection and others are just practice and custom. For example, access to public healthcare is covered by legislation but reciprocal healthcare arrangements such as cross-border treatment are based on an informal service level agreement in the memorandum of understanding. The memorandum of understanding was necessary because rights protected by EU law that previously existed for Irish citizens in the UK will no longer exist as a matter of EU law so we will have to rely on domestic legislation on both sides.
As members know only too well, these are uncertain times. While I focused on the most recent version of the Brexit arrangements, the path to their approval is politically fraught but, I believe, possible. The CTA certainly seems secure and relatively uncontroversial. For the trade relationship, the greater flexibility the UK now has vis-à-vis international trade may be sufficient to secure the Brexit agreement. Even if agreed, it is not at all clear what form the final trade relationship will take and the threat of no-deal by default after transition remains, although there seems to be little or no appetite for that given the dire economic warnings that come with it. In other words, Brexit costs but no deal costs more. This realisation should lead to an agreement in phase one and phase two, but uncertainty remains.