Boris Johnson’s government has rejected EU demands to scrap the proposed new plan despite admitting that it would violate international law and Brussels threatening legal action.
Why has the latest row kicked off?
The UK has introduced the Internal Market Bill which covers trade within England, Scotland, Wales and Northern Ireland. It seeks to change key elements of the withdrawal agreement approved earlier this year by the EU and the UK.
How would this violate the Brexit agreement?
The two main areas where the draft legislation would breach the treaty are in the areas of state aid and export declarations – though there are other contradictory areas.
The withdrawal agreement sets rules that effectively puts Northern Ireland in two economic camps – the EU and the UK – to avoid a hard border on the island of Ireland. The proposed British law would breach rules that are designed to prevent businesses in Northern Ireland having a competitive advantage with government subsidies from the UK, and ensure checks on goods entering Northern Ireland.
How exactly does the legislation do that?
It gives the UK government power to tear up the parts of the withdrawal agreement and specifically the Northern Ireland Protocol within it.
Section 42 of the Bill gives the UK government authority to “disapply” or modify the protocol so Northern Ireland businesses do not have to fill out export declarations or meet other exit procedures to avoid checks on goods crossing the Irish Sea. This was part of the promise by Brexiteers to Northern Ireland that it would have “unfettered access” to the UK’s internal market.
Section 43 of the Internal Market Bill gives the Northern secretary the right to “disapply” or modify article 10 of the protocol that aims to prevent Northern Ireland businesses benefitting from state aid from Westminster, a key objective of Brexiteers to protect UK sovereignty.
The Bill also protects the UK from legal challenge by saying that EU case law or legislation will not apply, blocking any European Court of Justice cases over illegal state aid. The EU has said that the Bill would be in violation of the treaty’s good faith obligation.
Didn’t the UK government agree to, vote for and sign the withdrawal treaty into law?
Yes. Johnson described the deal as “oven-ready” ahead of December’s UK election, and in January the prime minister hailed the signing of the divorce deal as a “fantastic moment” in British history.
So why are we here now?
Talks between the EU and UK have floundered this year as the two sides seek to reach a trade agreement that would come into effect when the standstill Brexit transition period ends in December. The divide between the sides remains over state aid and Irish Sea checks.
Trust between the EU and the UK has plummeted to a new low over the British draft legislation. The admission from Northern secretary Brandon Lewis that the Bill would breach the EU withdrawal treaty and international law “in a specific and limited way” makes negotiating a trade deal before the end of the year very difficult.
What would that mean on January 1st?
It would mean a hard Brexit and that World Trade Organisation rules would apply on goods traded between the EU and the UK. This would result in heavy tariffs and quotas being applied in both directions, potentially causing severe disruption to trade and economic damage to businesses.
Is there any hope of relations improving?
Not if the rhetoric of recent days is anything to go by. Johnson wrote in strong terms in the Daily Telegraph on Saturday that the Bill was necessary to stop the EU installing a “blockade” on food from Britain to Northern Ireland and that the UK “cannot leave the theoretical power to carve up our country – to divide it – in the hands of an international organisation”.
Minister for Foreign Affairs Simon Coveney has said there is “no blockade proposed” and this “inflammatory language” was “spin and not the truth”.
Checks would be required to prevent goods moving from Britain to the Republic via the North tariff-free if there was no trade deal.
What does this mean for Ireland?
Once again, how to keep the Border on the island of Ireland open while the UK fully exits the EU remains the dilemma, as it has been since the UK voted out in 2016.