EU ready to suspend trade deal if UK revokes NI protocol

The European Union would likely move quickly to launch infringement procedures against the UK and suspend their trade agreement if Boris Johnson’s government puts forward legislation to revoke its commitments over trade with Northern Ireland, a person familiar with the matter said.

As well as freezing the privileged access that UK companies have to the EU single market, the bloc would also halt talks over the status of Gibraltar, the person said, asking not to be identified commenting on private discussions. 

The European Commission, the EU’s executive arm in Brussels, would be responsible for recommending a course of action while the final decision on the details and timing of any measures would need the backing of member states.

The threat illustrates what’s at stake after UK Foreign Secretary Liz Truss on Tuesday night said the EU’s latest proposals on trading arrangements won’t work, signaling she’s prepared to take unilateral steps unless a new agreement can be negotiated. A suspension of the trade deal would effectively mean a return of the “no-deal Brexit” the accord was meant to avoid.

The government “will not shy away from taking action to stabilize the situation in Northern Ireland if solutions cannot be found,” Truss said in a statement. “The current EU proposals fail to properly address the real issues affecting Northern Ireland and in some cases would take us backward,” she said, arguing against introducing “more checks, paperwork and disruption.”

Any EU decision to retaliate would require the backing of the bloc’s 27 EU governments and would lead to a cooling off period before tariffs, quotas and other barriers to trade between Britain and the EU kicked in. The EU could terminate the whole deal or target specific industries.

‘Very Serious’

European Commission Vice-President Maros Sefcovic warned on Tuesday that the protocol is an international agreement and its “renegotiation is not an option.” He said the EU has worked tirelessly to propose solutions, including easing the flow of medicines into Northern Ireland. He is set to meet Truss again Thursday. 

Last year the EU paused the threat of legal action over separate breaches of the protocol to give the two sides space to negotiate.

Britain has long threatened to remove the need for checks on goods being sent from Britain to Northern Ireland by triggering Article 16, a mechanism agreed with the EU that forms part of the Brexit trade agreement. The UK argues that the protocol is disrupting trade between Northern Ireland and the rest of the UK and jeopardizing the Good Friday Agreement which helped to end years of sectarian violence in the region. 

It’s that peace deal that is the “most important agreement,” Johnson told reporters on Wednesday. “That is crucial for the stability of our country, the UK and Northern Ireland and that means things have got to command cross community support. Plainly the Northern Ireland protocol fails to do that and we need to sort it out.”

Johnson’s spokesman, Max Blain, told reporters the government has made no decision on how to proceed. 

‘Grossly Irresponsible’

Tensions over the protocol are threatening the viability of the power-sharing government established by the 1998 peace deal. Under the model, the first minister and deputy first minister have equal powers and one cannot be in place without the other. Effectively, one must be a unionist and the other a nationalist.

But now, the Democratic Unionist Party, which came second to the nationalists Sinn Fein in last week’s Assembly elections, has said it won’t nominate a deputy first minister until “decisive action” is taken over the Brexit deal. 

With discussions at an apparent impasse, the Times of London reported Tuesday that Truss has drafted legislation to unilaterally scrap large parts of the deal after losing faith in the negotiations. That would be a more dramatic move than triggering Article 16 and would likely prompt a more severe reaction from the EU. It would also face domestic opposition. 

“If any of this becomes reality over the coming days and weeks, it would be a grossly irresponsible act on the part of the UK government,” Stephen Farry, deputy leader of the Alliance Party which came third in last week’s assembly elections, told Bloomberg Radio on Wednesday. “It would do enormous damage to Northern Ireland itself, but also it would do huge damage to the UK’s international relationships” with the EU and US.  

Johnson would also face opposition from within his own Conservative Party if he sought to unpick the Brexit deal through legislation. His immediate predecessor, former Prime Minister Theresa May, warned late on Tuesday in the House of Commons that the government needed to consider “what such a move would say about the United Kingdom and its willingness to abide by treaties that it has signed.” 

On Wednesday, Cabinet Minister Michael Gove told Sky News on Wednesday “there isn’t going to be anything ripped up,” before also saying “there is no option that is off the table.” It’s important in the talks to “always make sure that you have some cards close to your chest so that you don’t reveal your hand entirely to the other side,” he said.