Northern Ireland protocol hurting some firms, a boom for many
A car drives past a Brexit poster, in Ravensdale, Northern Ireland June 21, 2022. Reuters

Northern Ireland's largest unionist party faces a historic dilemma if EU and British negotiators clinch a post-Brexit trade deal in a stand-off that could write a death warrant for decades of power-sharing with Irish nationalists.

Here is what is at stake for political stability in the British province that was ravaged by sectarian conflict until a peace deal 25 years ago.

WHY MUST NORTHERN IRELAND POLITICIANS SHARE POWER?

The 1998 Good Friday Agreement largely ended three decades of violence between Irish nationalist militants seeking union with the rest of Ireland, the British army and pro-British unionists wanting to stay in the United Kingdom.

The peace deal introduced a unique form of devolved government where unionists and nationalists are obliged to share power to ensure both communities are represented in political decision-making.

However the mandatory coalition of rivals has collapsed several times since then for a number of reasons, with the longest impasses lasting from 2002 to 2007 and from 2017 to 2020. It fell apart again a year ago due to Democratic Unionist Party (DUP) protests at post-Brexit trade rules.

BREXIT AND THE LATEST COLLAPSE

As part of its agreement to leave the EU, Britain reached an accord known as the Northern Ireland Protocol with Brussels to avoid imposing politically contentious checks along the 500-km (300-mile) land border with EU member state Ireland.

But the protocol effectively created a border in the Irish Sea for some goods moving from Britain because it kept Northern Ireland in the EU's single market for goods. This has disrupted some trade and angered many pro-British unionists who feel it has undermined their place in the UK.

Opinion polls have consistently shown a majority of Northern Irish voters back the protocol, with 54% in favour of the rules with their current lighter touch application and 34% opposed, according to a regular Queen's University Belfast survey last conducted in October.

While the UK as a whole voted to leave the EU in the 2016 Brexit referendum, Northern Ireland voted 56%-44% to remain.

London is seeking to rewrite the trade rules for Northern Ireland and after two years of fractious talks, the two sides have made progress under new Prime Minister Rishi Sunak, raising hopes a deal can be finalised in the coming weeks.

WHAT HAPPENS IF UNIONISTS FAIL TO BACK A DEAL?

The DUP, the largest unionist party, has said the checks on goods moving to Northern Ireland from the rest of the UK must be scrapped if it is to return to the devolved assembly. Power sharing cannot function without its support.

Similar to the 2017-2020 deadlock, local civil servants are currently managing the day-to-day governance with some input from London. Britain has resisted imposing direct rule - where it takes a much more hands-on role, with Ireland also having a say - and given the parties more time to form a government in the hope of a positive outcome to the protocol talks.

While the power-sharing structure has survived the previous long suspensions, analysts say a continued DUP boycott over what the party sees as a denial of their place in the UK would pose a more fundamental challenge with no clear way back.

That would call into question key planks of the Good Friday Agreement, potentially fuel calls by Irish nationalists for a referendum on unification with Ireland and widen a political vacuum benefiting the small number of militant groups still sporadically active in Northern Ireland.