The only credible solution to the UK Government's problem with the Northern Ireland Protocol is a future trade agreement with the EU. Here's why, and how to solve it. (THREAD)

1. The UK's problem with the NI Protocol is, first and foremost, about state aid. The Govt hates the idea that future subsidies awarded to GB firms could be subject to EU state aid rules and ECJ jurisdiction. (I've explained the dilemma below:) https://twitter.com/AntonSpisak/status/1301620007080787976

2. The Govt calls this an "ambiguity", but it is not. It was a requirement by the EU, during the NI negotiations, to ensure that UK-wide state aid with spillovers to NI won't undermine competition in the single market. (Several ways that could happen:) https://twitter.com/AntonSpisak/status/1301622841004228610

3. Understandably, the result is undesirable from the Government's point of view - esp in the event of no deal. The UK would be tied to EU state aid rules not just for the purposes of Northern Irish firms, but also potentially GB firms being active on the NI market.

4. The Internal Market Bill tries to prevent this undesirable situation by giving UK ministers the powers to disapply the state-aid clause in the NI Protocol (the infamous "Article 10") and take their own view of what UK subsidies should be in the scope of NI Protocol.

5. The problem is that, as a matter of international law (the Withdrawal Agreement that the UK has signed with the EU), it is not up to a UK minister to *unilaterally* decide what is, and isn't, in the scope of NI Protocol.

6. If the EU thinks that the UK has done the wrong thing and not notified the Commission about new (potentially harmful) subsidies, the EU can launch a dispute against the UK and take it to the ECJ.

7. But if the UK thinks there is "ambiguity" about subsidies that are in the scope of NI Protocol, it could argue about the "scope" of the state-aid clause before an independent arbitration panel, set up under the withdrawal treaty.

8. The result, in either case, is a complex dispute. The only thing that could prevent this undesirable situation is having clear and enforceable rules on state aid *between GB and the EU* in the UK-EU future trade agreement.

9. If the UK commits to a robust post-Brexit domestic state aid regime, and if the EU recognises this in the future agreement for the purposes of trade between GB and the EU, then this will, in effect, narrow down the scope of the state aid clause in NI Protocol.

10. In other words, it would be much harder for the EU to argue, under the terms of the NI Protocol, that a UK subsidy awarded to a GB firm is subject to EU state aid rules if the EU has committed to clear rules about how it treats GB subsidies.

11. Then, the UK Govt could make a credible case to the EU that it wants to *amend* the problematic Article 10 within the withdrawal treaty, in line with the new trade agreement. This would reduce the sort of "ambiguity" and "uncertainty" that the Govt is talking about right now.

12. Yet, bizarrely, the Govt is doing the opposite. It doesn't want any robust state aid rules; it wants unilateral control over interpretation of the NI Protocol; and it risks no-deal and its international reputation for its narrow-mindedness. (ENDS) https://www.gov.uk/government/news/government-sets-out-plans-for-new-approach-to-subsidy-control