Brexit: What would a trade war between Britain at the EU mean?

Irish deputy PM Leo Varadkar warns Dublin readying contingency plans ‘should we get into difficulty’ over UK threat to trigger Article 16 and scrap Northern Ireland Protocol

Joe Sommerlad
Wednesday 10 November 2021 12:16
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EU warns of ‘serious consequences’ if UK triggers Article 16

As Britain’s negotiations with the EU over the Northern Ireland Protocol enter their fourth week, Irish deputy prime minister Leo Varadkar has warned that his country is readying contingency plans in the event that a trade war should erupt between the UK and its European neighbours.

Westminster’s Brexit negotiator Lord David Frost emerged from a meeting with European Commission vice president Maros Sefcovic in Brussels last Friday complaining of a lack of progress in the talks and saying that triggering Article 16 to bring an end to the trade agreement covering Northern Ireland was “very much on the table and has been since July”.

The protocol was agreed by Boris Johnson and Lord Frost in 2019 and relaxes customs checks between Northern Ireland (part of the UK) and the Republic of Ireland (part of the EU) without the need for a hard border between the two states in the interest of preserving the peace secured by the 1998 Good Friday Agreement after decades of sectarian violence during the Troubles.

However, its conditions mean Northern Ireland must comply with the rules of the European single market, meaning bureaucracy and possible delays on goods arriving from England, Scotland and Wales, a scenario the UK is keen to avoid hence its suggestion of a “new legal text” to replace the current deal and streamline the process.

While the two sides did agree to a reduction in paperwork at the border in mid-October, the European Court of Justice’s continuing oversight role remains a point of contention, with the British government keen to remove it, complaining that the Luxembourg court’s influence amounts to an unjustified infringement of UK sovereignty.

Progress subsequently appears to have stalled, with fears growing that Mr Johnson’s government intends to abandon the protocol by triggering Article 16 once the Cop26 climate summit in Glasgow has concluded.

The clause permits either the UK or the EU to unilaterally suspend elements of the protocol if it is shown to be causing serious “economic, societal or environmental difficulties” and resulting in trade disruption but, for many, the concern that such a decision will only prove the start of such difficulties is very real.

Assuming the British government went ahead with Lord Frost’s threat - ignoring the criticism it has attracted from the likes of former Conservative prime minister Sir John Major and opposition leader Sir Keir Starmer - the Trade and Cooperation Agreement (TCA) deal it signed with the EU along with the Brexit Withdrawal Agreement might in turn be scrapped by the bloc in retaliation.

Irish foreign minister Simon Coveney said as much on Sunday, telling RTE the two deals were “contingent” on one another, with a similar caution also issued by Belgium’s deputy prime minister Vincent Van Peteghem over the weekend.

Mr Varadkar struck a more moderate tone in an interview with the same broadcaster on Tuesday, commenting: “I don’t think anybody wants to see the European Union suspending the Trade and Cooperation Agreement with Britain.

“But if Britain were to act in such a way that it was resigning from the protocol, resigning from the Withdrawal Agreement, I think the European Union would have no option other than to introduce what we call rebalancing measures to respond.”

He added: “I really hope that Britain doesn’t go down this road. Prime Minister Johnson always spoke about wanting Brexit done.

“Brexit is kind of done, but [this] potentially undoes it and I don’t think it would be good for us, for Great Britain, and I don’t see how it would be good for Northern Ireland. And bear in mind the protocol is broadly supported by people in business and most political parties in Northern Ireland, and nobody is yet putting forward a preferable alternative to that.”

The former taoiseach told RTE that he had attended a Cabinet sub-meeting regarding Brexit on Monday to “essentially dust down and restart our contingency preparations should we get into difficulty”, a warning to Mr Johnson and Lord Frost that Europe is entirely serious about that reality coming to pass.

If the article were to be triggered and the EU were to hit back by declaring the TCA null and void, a step that could not be undertaken without a year’s notice, the UK would eventually be plunged back into no-deal Brexit territory, which could mean new tariffs on its goods and even less favourable terms for British businesses to contend with than they currently operate under outside of the single market.

That scenario would not be ideal for the Republic of Ireland either, however, as, without the invisible border between itself and Northern Ireland, British goods could be allowed to cross over into the Emerald Isle without being checked to ensure they meet EU quality standards.

During the original Brexit negotiations, Dublin expressed reluctance to introduce checkpoint infrastructure along its border with its northern neighbour for fear of stoking renewed regional hostilities, so having to again be pragmatic on that point could, potentially, see it taking delivery of sub-standard stock.

In addition to the threat of tariffs, Britain could also be subjected to increased bureaucracy from its continental neighbours like France, Belgium, the Netherlands and Luxembourg.

Should those nations insist on carrying out physical customs checks on British lorries, the UK could see a return to the queues and upheaval experienced in Kent last December when France demanded HGV drivers present a negative Covid test before crossing its border.

That could mean further supply chain chaos and increased public anger - a headache for Mr Johnson’s government and a problem likely to translate into Labour votes at the ballot box.

On the diplomatic front, the UK would be risking not just the souring of relations with Europe - exhausted by the antics, ill will and duplicity of this prime minister - but also the US.

President Joe Biden is proud of his Irish heritage and known to be deeply hostile to any Brexit-related maneuvers that might disturb the peace secured by the Good Friday Agreement.

He will not be afraid to make life difficult for Mr Johnson by blocking lucrative trading opportunities if he does not like what he sees unfolding across the Atlantic.

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