The EU has indicated it will respond to the announcement today of new UK legislation replacing elements of the Northern Ireland Protocol.
Maros Sefcovic, vice president of the European Commission, said that if the UK goes ahead with such unilateral action, then the EU “will need to respond with all measures at its disposal”.
According to The Guardian, such measures could include:
1. Cancelling the EU-UK Trade and Cooperation Agreement (TCA) using articles 770 and 779, which allow the EU to terminate the entire trade agreement
2. Invoking article 521 [ie - the trade parts] of the TCA. According to The Guardian, this allows the EU to suspend the trade parts of the TCA, leaving all the other areas agreed last December, including visa-free holidays and police cooperation, intact
3. Immediate fish wars: TCA article 506, paragraph 2 allowing the EU to “suspend, in whole or in part”, access to its waters.
Johnson dismisses EU retaliation
Prime minister Boris Johnson dismissed the threat of EU retaliation in the form of trade sanctions: “I don’t think that is likely but …we need to address the problems with the protocol.”
Coming UK legislation
Foreign secretary Liz Truss told MPs today (17 May 2022) that legislation to be published “in the coming weeks” would override core elements of the protocol by introducing:
a) two goods movement channels:
- a green lane for trusted traders transporting goods to NI only. Such goods movements will be exempt from checks and customs controls, thereby freeing them from “unnecessary bureaucracy” removing "regulatory barriers to goods made to UK standards being sold in Northern Ireland", Truss told MPs today
- a red lane for products destined for the EU, ie the Republic of Ireland. These goods will have to undergo full checks and customs controls under EU law
b) a new dual regulatory regime: businesses will be able to choose between meeting UK or EU standards
The protocol’s rules on VAT and state aid would be scrapped and the European Court of Justice (ECJ) would no longer have any role in adjudicating disputes.
Concerns
After the Truss statement to the House of Commons after lunch today, the EU said it had ‘significant concerns’ about the UK’s intentions.
Legislation that “would disapply constitutive elements of the protocol raises significant concerns,” Sefcovic said.
“The protocol is an international agreement signed by the EU and the UK. Unilateral actions contradicting an international agreement are not acceptable," he added.
Sefcovic added the Withdrawal Agreement and its protocol were “the necessary foundation for the [EU-UK] Trade and Cooperation Agreement (TCA)”.
‘EU trade war’
Questioned by Lib Dem MP Layla Moran in parliament today on how much extra people might have to pay for goods if the EU retaliates by triggering a trade war, Truss said the government was confident the move is legal and that people in NI were already facing higher costs.