EU warns of ‘serious consequences’ for UK in Northern Ireland Brexit trade row

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The European Commission has accused the UK government of failing to engage “sincerely” in talks over post-Brexit rules for Northern Ireland and warned of “serious consequences” if Boris Johnson suspends the arrangements by triggering Article 16.

The warning came after talks in Brussels between the Brexit minister, David Frost, and the commission’s vice-president, Maroš Šefčovič, ended in deadlock.

Lord Frost said that progress on UK concerns about the operation of Boris Johnson’s Northern Ireland protocol had been “limited”.

But Mr Šefčovič said the UK side had failed to engage with significant proposals put forward by the EU to make life easier for businesses moving goods between Northern Ireland and the British mainland.

In an indication that patience is running short in Brussels, he said that further talks scheduled for next week in London would be an “important” moment in the process.

The meeting came amid heightened expectations that Mr Johnson will invoke Article 16 of the protocol to suspend elements of his deal, at the risk of triggering a trade war.

Speaking before the talks, Lord Frost said that Article 16 was “very much on the table” and that “significant gaps” remained between the two sides, warning that “time is running out on these talks if we are to make progress”.

There is speculation that Mr Johnson will delay any escalation of the dispute until after the 12 November conclusion of the Cop26 climate change talks in Glasgow, but Lord Frost refused to be drawn on timescales.

His comment sparked alarm in Northern Ireland, where businesses are concerned that further rows with Brussels will disrupt trade.

Aodhán Connolly, director of the Northern Ireland Retail Consortium, told The Independent: “We have always been clear that what we need is an agreed, cooperative solution. Article 16 isn’t that.

“Triggering Article 16 does not give that certainty and stability that businesses need: in fact it plunges us into more instability, more uncertainty, more negotiations.”

And the SDLP Brexit spokesperson, Matthew O’Toole, a member of the Stormont assembly, told The Independent: “Repeated polls now show people in Northern Ireland want the protocol to work and do not want Article 16 to be triggered.

“That Boris Johnson and Lord Frost seem determined to escalate and increase confrontation in a way that people here do not want is a chilling insight into how little they actually care about the region.

“Triggering Article 16 would not only be a huge risk for the whole UK economy, it would be a shameful act of contempt towards the people and businesses of NI.” 

The respected analyst Mujtaba Rahman, director of the Eurasia Group and a former official at both the UK Treasury and the European Commission, predicted that Brussels’ response to the move would be “nuclear” and would involve the suspension of last year’s post-Brexit trade and cooperation agreement (TCA).

“I expect no intermediate step [tariffs],” he said. “Just an immediate, emergency EU council and a political decision to suspend the UK-EU trade deal.”

Mr Rahman said he did not expect any suspension of the TCA – effectively imposing a “no deal” Brexit – to come into effect until 2023, and said it was possible Mr Johnson would “bottle it” rather than go ahead towards an election year in a trade war that could force up prices in the shops.

But he said: “Next year will see a re-run of Brexit – renegotiation of Irish border issue, with the threat of no-deal tariffs looming in the background... Strap in – seems things are about to get very, very bumpy indeed.”

Speaking in Brussels, Mr Šefčovič said the EU had “spared no effort” in drawing up a package to cut back customs-related red tape and do away with 80 per cent of sanitary checks on animal products.

But he said: “This was a big move by us but until today we have seen no move at all from the UK side.

“I find this disappointing and, once again, I urge the UK government to engage with us sincerely.

“From this perspective I see next week as an important one. We should focus all efforts on reaching a solution as soon as possible. Our aim should be to establish stability and predictability for Northern Ireland.”

The article permits either the UK or EU to unilaterally suspend elements of the Northern Ireland deal if it is shown to be causing  serious “economic, societal or environmental difficulties” or diversion of trade that are liable to persist.

However, it also makes clear the other side can retaliate with “proportionate rebalancing measures”, which could include the imposition of tariffs on UK goods.

Brussels has repeatedly stated that it will not comply with UK demands to remove the European Court of Justice (ECJ) from any jurisdiction over affairs in Northern Ireland.

ECJ involvement was agreed by Mr Johnson and Lord Frost when they negotiated the protocol in 2019, because the agreement effectively leaves Northern Ireland within the EU’s single market area. But they have recently insisted that the Luxembourg court’s role is an unjustified infringement of UK sovereignty.

Mr Šefčovič warned: “We hear a lot about Article 16 at the moment.

“Let there be no doubt that triggering Article 16 to seek the renegotiation of the protocol would have serious consequences – serious for Northern Ireland as it would lead to instability and unpredictability, and serious also for EU/UK relations in general as it would mean a rejection of EU efforts to find a consensual solution to the implementation of the protocol.”

In a statement, a spokesperson for the UK government said that in today’s meeting, Lord Frost had “underlined that progress had been limited and that the EU’s proposals did not currently deal effectively with the fundamental difficulties in the way the protocol was operating.

“He added that, in the UK view, these gaps could still be bridged through further intensive discussions. He underlined that the UK’s preference was still to find a consensual solution that protected the Belfast (Good Friday) agreement and the everyday lives of people in Northern Ireland.”

The Northern Ireland secretary, Brandon Lewis, insisted that the triggering of Article 16 was “not inevitable” and remained an “absolute last resort”.

“Our legal position is that the conditions have already been met for us to trigger Article 16,” Mr Lewis told the PA news agency.

“I think it’s self-evident that we don’t want to do that, otherwise we would have already done it. And we haven’t done it because we want to come to an agreement with the EU.”