Northern Ireland has a chance to insulate itself from the madness of Brexit - the DUP deal puts this at risk

Stormont is back. But the deal announced this week between the British Government and the DUP shows that Northern Ireland remains in flux, both economically and politically. And this means that the opportunity presented to make economic progress by attracting a new wave of inward investment may now slip past.

Northern Ireland has the chance to insulate itself from the madness of Brexit by retaining free access to the EU Single Market, as well as selling into the UK. But this involves a creative fudge that unionism cannot seem to live with. Now, by focusing purely on the UK market and dissing the idea of following EU rules, this week’s British government paper casts doubt over the direction of the Northern Ireland economy. And when you are trying to attract inward investment from big players, doubt is fatal because they have plenty of other choices.

The big new economic selling card that Northern Ireland has due to the post-Brexit arrangement – the ability to sell goods freely into both the British and EU markets – may not be politically sustainable. In one of the first calls to the troops after negotiating the deal, DUP leader Jeffrey Donaldson said it would not be long before the Assembly had the chance to examine some proposed change of EU legislation and, the implication was, try to nix it by using the procedure – the so-called Stormont Brake – that allows the implementation of EU rules to be halted and sent for further discussion.

A key part of the deal announced this week was “bigging up” the brake, even if in reality its use is fairly circumscribed, as well as writing into legislation that Northern Ireland would not automatically follow EU rules. By doing this, the necessary ambiguity required for the post-Brexit plan of selling freely into both the EU and UK markets starts to be undermined. Because at some stage, if updated EU rules are not followed – in the environment, products standards, or wherever – then the EU will start to limit the access of manufacturers in Northern Ireland to the Single Market. Potential big investors, who might have been attracted to Northern Ireland, will see this coming and take their business elsewhere.

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The Stormont Brake was included in the Windsor Framework as a kind of political figleaf to cover the fact that Northern Ireland, to remain part of the EU Single Market for goods, would have to continue to follow EU rules. This is surely not as onerous as it looks – in reality, once the Brexit extremist wing of the Tory party, already discredited and flailing, loses its influence after the next UK general election, a new Labour government will ditch the nonsense of “tearing up the EU rule book”. It is likely to maintain alignment with most EU rules to allow trade to be as free as possible.

However, the idea of following EU rules has been weaponised by unionism. It is British tabloid politics made real, replete with references to “red tape” and “Brussels bureaucrats”. The main thing bringing red tape to Britain is Brexit itself, as shown again this week as new rules controlling imports to the UK come into effect.

Donaldson has won some ground on reducing post-Brexit bureaucracy from checks on goods entering Northern Ireland – though he had to spin a bit this week as most of the “wins” were in the original Windsor Framework, which was dismissed by the DUP as insufficient.

But the language of this week’s deal shows that some circles cannot be squared. Brexit means Brexit and so while Donaldson can promise no “routine” checks on goods entering Northern Ireland from Britain, this does not mean no checks at all. Far from it. Avoiding a border on the island of Ireland means controlling goods crossing the Irish Sea.

But the unique ability to trade freely in the other direction, into the UK and also into the EU Single Market, was a potentially precious prize, insulating Northern Ireland from the trade barriers faced by other British companies accessing European market. The risk now is that this is slowly whittled away as the DUP and its allies demand that it not be seen to follow the EU “rule book”. This is flag-waving politics and destructive economics. Promises in the document to assess rules changes from London so as not to damage UK trade do not appear to amount to much.

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There is a choice here for Northern Ireland. It is whether to accept the “democratic deficit” caused by following rules set in Brussels and focus on the economic advantage of being the only part of the UK with free access to the vast EU Single Market for goods. But Northern Ireland had the prospect of a unique selling point here to inward investors. And the thrust of this week’s deal risks undermining this.

To really make Northern Ireland work economically, all sides needed to live with the ambiguity offered by the Windsor Framework – that the EU only signed up to for political reason and because the North is so small

Politically, it is a move away from the balance struck by the Belfast Agreement, swinging the emphasis firmly back to demands to safeguard the union and trade with the UK. Obligations to take account of the all-island Irish economy, part of the withdrawal deal with the EU, are being removed from UK legislation. Perhaps this was all needed for the vital goal of getting Stormont revived. Interestingly, the SDLP are not supporting the deal, arguing that it is unbalanced and outside the spirit of the Belfast Agreement.

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And now there will be an intriguing dynamic in the Assembly. Sinn Féin will want to appear competent but to also promote its central case that Northern Ireland would be better off in a united Ireland – while the DUP wants to stay stuck to a stumbling UK economy, a course of action that may in time make the case for the Border poll it so despises.

To really make Northern Ireland work economically, all sides needed to live with the ambiguity offered by the Windsor Framework – that the EU only signed up to for political reason and because the North is so small. Trade rules are written in black and white, but room for enough fudge to allow Northern Ireland to sell freely both to Britain and the EU had been found. If Northern Ireland’s future is looking only towards Britain and scoffing at the EU "rule-book”, this chance will be lost, and the North will find itself stuck economically in a post-Brexit backwater.