U.K. Urges EU to Avoid Trade War If Brexit Deal Suspended
U.K. Urges EU Not to Start Trade War If Brexit Deal Suspended
(Bloomberg) --
The U.K. warned the European Union not to start a trade war if Boris Johnson’s government suspends part of the Brexit settlement over Northern Ireland, saying a strong retaliation would exacerbate problems.
“I hope everyone can step back from that,” U.K. Brexit Minister David Frost told BBC Radio on Wednesday. “I don’t see why it would help for the response to that from the European Union to be sanctions, retaliation and making trade more difficult.”
Both sides are again locked in talks to resolve the thorny question of how Northern Ireland fits into post-Brexit rules on commerce, with Frost calling for a fundamental overhaul of the U.K.’s divorce deal with the EU because it has caused a decline in trade between the region and mainland Britain. The bloc has proposed concessions, including reducing the burden of customs checks, but Frost has said they don’t go far enough.
The sticking point for the EU is that the U.K. is seeking to walk back on commitments it made only two years ago when it signed the original Brexit divorce deal, including agreeing to an effective customs border in the Irish Sea to avoid the creation of a hard border on the island of Ireland.
If the U.K. isn’t happy with the outcome of the latest negotiations, it has said it will activate Article 16 of the Northern Ireland protocol, which allows either side to suspend parts of the deal to address issues such as diversion of trade. One potential EU reaction to such a move would be to terminate the wider trade agreement with the U.K.
“I don’t understand why that would help the situation here,” Frost said. “Article 16 is a legitimate option within the treaty.”
The EU would consider Britain invoking Article 16 as an inflammatory move, since it would be a unilateral action while negotiations are ongoing to address the problems raised by the U.K.
The British government’s complaints about the role of the European Court of Justice in the protocol -- a role to which Britain originally agreed -- is another sore spot in the talks. The EU argues the ECJ role is essential when it comes to interpreting questions related to EU law, while Britain says the setup is contributing to political antipathy toward the protocol.
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