Trade war looms as UK prepares to reject EU offer on Northern Ireland

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Fears that the UK is heading for a trade war with the EU have been fueled by strong indications from the government that proposals presented in Brussels on Wednesday on Brexit provisions do not go far enough.

Brexit Minister Lord Frost will use a speech in Portugal on Tuesday to say that removing his ban on British sausages to resolve the dispute over the Northern Ireland protocol will not be enough.

The peer will call for “significant” changes to the post-Brexit deal he negotiated, including on the role of the European Court of Justice, which the EU is highly unlikely to concede.

“Without new arrangements in this area, the protocol will never have the support it needs to survive,” he warned on the eve of a significant EU decision to resolve the dispute.

EU Brexit Commissioner Maroš Šefčovič will present four papers on Wednesday on how the Northern Ireland Protocol can be improved – which he called “very ambitious”.

A proposed “national identity” exemption for British sausages from the EU’s ban on prepared meat from a third country will be included, sources said.

But Mujtaba Rahman, the chief executive of consultancy firm Eurasia Group, warned in a note to clients on Saturday that no concessions on the ECJ would give Frost the rationale for triggering Article 16, the litigation mechanism. formal Northern Ireland Protocol. process or put it on hold by completely unenforcing the provisions.

“There is a lot of cynicism in the EU about the government’s real goals. Is it to settle fundamental problems in Northern Ireland or is it to maintain an ideological fight with the EU because it serves certain sections of the Conservative Party? Rahman said.

“The French President, the German Chancellor and the President of the European Commission cannot wake up every day to a new argument with Boris Johnson. At some point, they need to send a simpler and stronger message.

“The use of a termination clause in the trade and cooperation agreement itself can be triggered unilaterally and would completely suspend the zero tariff / quota trade agreement between the two parties. ”

This cross-retaliation mechanism allowing for trade sanctions for breaches of the Withdrawal Agreement has been agreed to by both sides, but others believe the EU will not be so keen to go nuclear.

Catherine Barnard, professor of European law at the University of Cambridge, believes short, sharp shocks in the form of tariffs on iconic British products such as Scotch whiskey or salmon are more likely.

She also said that the ECJ is not an important issue when it comes to trade in goods. Its annual report cites only 24 cases relating to customs union laws currently pending, out of more than 1,045 in total.

Frost also told delegates at the Conservative Party’s conference last week that the rules required the EU to be “proportionate,” but said he still hoped to come out of negotiations with a new deal.

Retaliation is unlikely until next year, with the EU facing a breach and legal action as the first response to any UK suspension of the Northern Ireland Protocol.

The protocol, designed to avoid a hard border between the UK and the single market operating in the Republic of Ireland, has placed a border in the Irish Sea, angering unionists who see checks on goods entering NI from Great Britain as an attack on the integrity of the United Kingdom and their British identity.

The EU should propose to remove controls on goods intended to remain in Northern Ireland with checks only on products intended for sale in the republic.

Both sides said they expected to enter a period of intense negotiations, which Frost set at three weeks, after the EU’s response to the UK’s demands was released on Wednesday.

But one school of thought is that Frost and Home Secretary Priti Patel are being used to keep the Brexit pot boiling to show how the UK is fighting ‘EU bullies’.

Others believe that the struggle for Northern Ireland is more fundamental. A former Downing Street official said he was told that Boris Johnson was “telling people he had been misled” about the protocol and was determined that it should be rewritten.

Frost will say on Tuesday that “UK-EU relations are under strain”, but if both sides can put the protocol “on a lasting basis, we have the opportunity to overcome the difficulties of the past year” .

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