EU and UK edge closer to trade war over London’s NI protocol demands

The UK and the EU edged closer to a trade war on Sunday after Brussels rejected London’s demands for a comprehensive rewrite of the Brexit deal’s contentious Northern Ireland protocol.

The European Commission reiterated that it would not agree to remove oversight of the protocol by the European Court of Justice, a UK demand that Lord David Frost, the UK Brexit minister, will repeat in a speech on Tuesday.

The protocol avoids the need for a land border on the divided island of Ireland — its removal was a key part of the 1998 Good Friday Agreement that ended three-decades of sectarian conflict in Northern Ireland — with checks made instead on goods moving from Great Britain to Northern Ireland.

The imposition of controls by the EU on inter-UK goods trade has enraged unionist politicians in Northern Ireland, who said it undermined the region’s position in the UK.

Raising the temperature further, Irish foreign minister Simon Coveney took to Twitter to accuse the UK of setting out a new “red line” just days before the EU was set to offer “serious” concessions.

“Are we surprised? Real Q: does UKG actually want an agreed way forward or a further breakdown in relations?”

Frost responded that the UK’s demand to remove the oversight of the ECJ was “not new”, adding: “We set out our concerns three months ago in our 21 July Command Paper. The problem is that too few people seem to have listened,” he tweeted. His allies said it was “a key ask”, but one added: “We don’t use the expression ‘red line’.”

The commission declined to comment on Frost’s demands directly but pointed to a speech on October 7 by Maros Sefcovic, its Brexit chief, in which he ruled out renegotiating the protocol. An official added that the ECJ’s role was a “red line” for Brussels.

Sefcovic said in his speech that ECJ oversight came up just once in his meetings last month in Northern Ireland. “I find it hard to see how Northern Ireland would keep access to the single market without oversight from the ECJ,” he told a webinar.

On Wednesday, Sefcovic will publish proposals to drop many checks on goods deemed unlikely to leak from Northern Ireland into the EU single market via the Republic of Ireland.

But around half the customs and health checks would remain, a situation considered intolerable by the UK government and the Democratic Unionist party, which is part of Northern Ireland’s administration.

Sir Jeffrey Donaldson, its leader, welcomed the EU’s willingness to negotiate but said it did not go far enough. “We are clear there should be no internal barriers to trade within the United Kingdom and we want to see the removal of barriers to trade between Great Britain and Northern Ireland and that is our bottom line. For us, the Irish Sea border must go,” he told the FT.

He has threatened to pull his ministers out of the Northern Ireland power-sharing executive, another key element of the Good Friday accord, as early as this month unless the protocol is scrapped.

Frost wants the protocol to be governed like the later Trade and Cooperation Agreement between the two sides, where disputes are managed collectively and ultimately through international arbitration.

However, legal experts believe Frost would run into problems in the domestic courts if he tried to use Article 16 — the override mechanism in the protocol — because the EU refused to end the role of the ECJ.

George Peretz, QC at Monckton Chambers, noted that the protocol specifies that Article 16 could only be used where there are “serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”.

If it triggered Article 16 over the ECJ, the UK would “face likely defeat in the domestic courts”, he said on Twitter.

That could mean the Johnson administration faces either the possibility of a battle in the courts or the need to introduce new legislation, which would potentially run into opposition from the House of Lords.

It would also face retaliation from the EU’s 27 member states, who have accused the UK of trying to renege on a deal it signed two years ago.

“If the UK chooses a path of confrontation and triggers Article 16, the consequences will be far reaching and felt throughout the UK,” an EU diplomat warned. “It is very disturbing that the UK still does not do enough to implement the agreement and pretends not to have known the consequences of an agreement it wanted, negotiated, signed and ratified in the first place. Friends and allies don’t treat each other like that.”