How Boris Johnson is dragging the UK into yet another trade break with the EU

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The UK is considering legislation to overturn parts of the Brexit deal it signed with the European Union, using an obscure concept of international law as justification for doing so. The move, designed to defuse tensions over how a section on Northern Ireland should be implemented, instead risks sparking a serious legal dispute with the EU more than two years after the UK left the country. bloc, just as a unified approach by Russia after its invasion of Ukraine had bound them again.

1. What does the UK offer?

The legislation would give UK ministers the power to unilaterally rewrite the bulk of the so-called Northern Ireland Protocol, which keeps the area in the EU’s single market while creating a customs border with the rest of the UK . This was designed to prevent a hard border on the island of Ireland. The new rules would separate goods moving just between Britain and Northern Ireland from goods destined for the EU and allow businesses in Northern Ireland to choose whether they follow UK or EU standards, or both. for the goods. They would also extend UK subsidy controls and tax relief, including changes to value added tax, to Northern Ireland and deprive the EU Court of Justice of its role in settling disputes over Brexit deal in the region, allowing an independent arbitration panel instead. to monitor legal matters.

2. What is driving the move?

The protocol has angered trade unionists in Northern Ireland because it treats the region differently to the rest of the UK, but the EU notes that the agreement grants Northern Ireland unique access to the common market in the UK. EU and UK. EU member states and senior US politicians have warned that unilateral efforts to scuttle parts of the arrangement risk undermining hard-won peace and stability in the region. British Prime Minister Boris Johnson’s plan has been rejected by legal experts and could face stiff opposition in Parliament, while Irish Prime Minister Micheal Martin said on June 8 that the UK had shown “bad faith” in how he approached the Brexit treaty part. with Northern Ireland.

3. What is the political context in Northern Ireland?

The Democratic Unionist Party has backed down from the rules Johnson originally subscribed to and is now refusing to take its place in Northern Ireland’s power-sharing government until the protocol is scrapped. His opposition is ideological as well as economic, believing that Northern Ireland should not be treated differently from the rest of the United Kingdom. That’s why Johnson’s ministers shifted the rationale for rewriting the protocol from primarily disrupting trade to threatening Northern Ireland’s fragile politics.

4. Why does the EU oppose it?

The European Commission said the proposed bill “is extremely damaging to mutual trust and respect between the EU and the UK”. Maros Sefcovic, the EU’s chief Brexit negotiator, described Britain’s planned June 15 legislation as a breach of international law, adding that Britain’s proposal to eliminate the role of the EU Court of Justice in dispute resolution was another violation. The EU is preparing for an endless fight over London’s decision.

5. What options does the EU have?

The EU is relaunching a case it launched against the UK in March 2021 over the implementation of the protocol, and is also launching two new infringement proceedings for the UK’s failure to comply with its obligations under EU sanitary and phytosanitary rules and to provide the EU with statistical trade data on Northern Ireland. Infringement proceedings could ultimately lead to financial penalties being imposed in the UK, but the cases will unfold over several months. The EU could go further if it really wants to play the tough game and start imposing tariffs on targeted goods in Britain. The most drastic option, and ultimately the riskiest given the disruptions in global trade, would be an EU decision to terminate the entire trade and cooperation agreement with the UK, which which would further prevent UK businesses from accessing the EU single market.

6. How effective would the EU infringement procedure be?

Infringement cases are traditionally triggered when an EU country persistently fails to comply with the bloc’s rules. It is a lengthy process. What is different this time is that the UK is no longer part of the EU and would not face the same kinds of pressures as an EU member to comply. Time also plays a role in diluting the effectiveness of such cases. Even if the Court of Justice of the EU decides to speed up the cases, it can still take months and by the time a decision is made, new developments may have overtaken it.

7. What if the UK just ignores EU orders?

The UK has a so-called dualist legal system, which means that international law is only legally binding insofar as it is enshrined in UK law by parliament. So the UK could be found to be in breach of international law, but it would not be a breach of UK domestic law. If the UK withdraws its recognition of the Court of Justice of the EU by legislation and the EU judges then decide that this breaches the arrangement and later imposes a fine on it, the UK could simply ignore these orders, say the lawyers, because there is in fact no enforcement mechanism for such breaches of law.

8. What are the other dispute resolution mechanisms?

Infringement proceedings alone may not be enough for the EU to counter what it sees as a breach of international obligations. The commission said on June 15 that “a unilateral solution violating an agreement will never be tolerated by the EU”. The EU could also decide to impose tariffs on targeted products, such as Scottish salmon. It would spark a trade dispute reminiscent of the one the EU had with the US under then-President Donald Trump’s administration, and which contributed to more than $18 billion in US and EU exports subject to to painful sampling. The EU-UK Withdrawal Agreement also provides for an arbitration process to settle disputes, but this is yet another option that could take a very long time.

9. What if legal channels don’t work?

There is always the political dimension if legal channels fail to convince the UK not to go ahead with its plans. Shortly after the UK announced its new bill, the US urged Britain and the EU to resolve their differences. Senior US politicians, including House Speaker Nancy Pelosi, have previously warned that such a move by the UK would weaken prospects for a UK-US trade deal.

More stories like this are available at bloomberg.com

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