Later Tuesday, Britain will inform the EU that it intends to end parts of the post Brexit trading agreement.
#BreakingNews Foreign Secretary #UK Liz Truss has confirmed the Government is bringing forward a new law to allow the #UK to unilaterally suspend parts of the #NorthernIreland Protocol.
— ShareTalkNews™ (@ShareTalkNews) May 17, 2022
This announcement is intended to end the impasse in Stormont’s efforts to create a new executive. Unionist parties refuse to restore powersharing until their concerns about the Northern Ireland protocol have been addressed.
The protocol was originally agreed to by the UK. Its purpose is to prevent checkpoints at the politically sensitive border between Northern Ireland (EU member state) and Ireland (EU member state).
Unionists and loyalists hate the protocol and claim that a border in the Ireland Sea could threaten Northern Ireland’s position in the UK.
The EU is accused by the government of applying the protocol too rigidly and preventing British goods from reaching Northern Ireland shelves. However, the EU insists that the rules are necessary in order to protect its borders.
If the UK decides to rip up the protocol, here are five possible responses from the EU.
EU-UK Trade War
Analysts believe that a trade war between the UK & the EU is the worst outcome of the protocol’s abandonment.
In this scenario, the EU could end the Trade and Cooperation Agreement which guarantees tariff-free trade between the UK and the EU.
The dissolution of the agreement could lead to Brussels imposing tariffs on British exports and punishing UK suppliers.
The bloc could also target tariffs that cause political headaches to the government.
Fishing produce could be one example of such an export. The fishing industry, although it is a small percentage of total exports overall, is the most vocal.
Brussels faces a risk if tariffs increase the cost of goods within the bloc, which could anger EU citizens already facing high living costs. There is also the risk that the UK will retaliate and impose tariffs on EU goods.
Brexit Opportunities Minister Jacob Rees Mogg described the effects of a trade conflict as “acts of self-harm.”
Katy Hayward, Queen’s University Belfast professor of political sociology, stated to Update that British consumers would feel a trade war “very quickly.”
Fishing dispute
The EU and UK vessels are now unable to fish together in the other’s waters since December 31, 2020, unless they have a license.
By stopping new licenses from being issued, the bloc could prevent UK vessels from entering EU waters.
The UK could do the same.
Tensions about fishing rights flared in May 2013 when French fishermen threatened to blockade Jersey’s issuing licensees by the Crown Dependency.
Boris Johnson responded by sending 2 Royal Navy vessels to supervise the protest.
Increased paperwork UK businesses
Businesses could face increased red tape if they want to sell goods within the EU.
Some companies already complain that exporting products to the EU can be a major hurdle to free trade.
Hayward stated that the UK’s increase in red tape could impact productivity.
She said that the EU could make it very difficult or extremely strict to inspect every vehicle bringing goods into the EU, or even provide paperwork to do so.
“This causes hold-ups in Britain, and ultimately, a slowing of production.”
US-UK Trade Agreement Stalled
The US, which is credited with brokering the Good Friday Agreement has warned the UK not to take unilateral action on the protocol.
Richie Neal is a prominent Democratic congressman and heads the committee on methods and means. He warned last week that a free-trade agreement with the UK was “desirable”, but that it would not move if there were “any danger” to the Good Friday Agreement.
The prime minister has already highlighted the UK’s ability, independent of the EU, to sign trade agreements. Any delay in a UK-US agreement could have serious consequences.
Sinn Fein fury
If Sinn Fein refuses powersharing, the government’s efforts to restart Stormont could backfire.
The protocol is argued to have benefited the nationalist party because it allows Northern Ireland companies to trade in the EU and the UK.
Their voice, as the largest party in Stormont, could have an influence.
Britain brought to court
The EU could launch a formal “infringement proceeding” against the UK, which may lead to a case before the European court.
The bloc considered this move last year when the UK unilaterally extended the grace periods for Northern Ireland businesses to adapt to post Brexit rules.
