UK government denies US delay to lifting steel tariffs is linked to Northern Ireland Protocol

Fri 3 Dec 2021
Posted by: Noelle McElhatton
Trade News

Trade minister Penny Mordaunt has called ‘fake news’ on reports that the US is blocking a deal on steel and aluminium tariffs while the UK continues to threaten triggering Article 16 of the Northern Ireland Protocol.

Mordaunt told the International Trade Committee yesterday (Thursday 2 December) that linking the two issues was a “false narrative” and that they were “entirely separate”.

The BBC reports that Mordaunt defended the UK’s approach to discussions on the protocol: “We have acted in good faith. We will do more to tell America we have acted in good faith and we are determined to be pragmatic.”

What it Article 16?

The protocol is the legal agreement between the UK and EU – agreed to in 2019’s Withdrawal Agreement – that governs trade in relation to Northern Ireland.

Under the protocol, the region has remained subject to the rules of the EU single market following Brexit in order to avoid a hard land border and customs checks on the island of Ireland.

Article 16 can be triggered by either side if they believe the protocol has caused “serious economic, societal or environmental difficulties” or the “diversion of trade.

It allows for either side to take “safeguard measures”, which effectively means suspending parts of the protocol.

Talks ongoing

Talks between the UK and EU on the protocol are in their eighth week. The EU has offered a range of solutions including cutting checks on goods and customs procedures, as well as safeguarding supply of medicines to NI.

However, Brexit minister Lord Frost is looking for a more fundamental rewrite of the protocol and has said that Britain is within its rights to trigger Article 16.

EU deal done

As covered in the IOE&IT Daily Update, the US has not come to a deal on metal tariffs for UK imports despite suspending tariffs in a deal with the EU in October.

Sir Kim Darroch, former UK ambassador to the US, said the reports on the “troubled state” of trade relations between the UK and the US are “confirmation that the US will act to protect a peace they helped broker” in Northern Ireland, reports the Independent.

President Biden has stressed the importance of protecting the Good Friday Agreement and his concerns that Brexit could derail the peace is considered one reason for the slow progress on a UK-US trade deal. 

Steel exports almost halved

UK steelmakers have said that unless the US’s Trump-era tariffs end within days they would lose further sales to EU producers, whose tariffs are lifted on January 1, reports the FT.

Trade body UK Steel said steel exports to the US had declined from 350,000 tonnes in 2018 to 200,000 tonnes in 2020, since the tariffs came in.

“While many of our US customers have stood by us, it is imperative that all parties work together to come to an agreement that provides the UK with the same tariff-free quotas the EU has already secured,” it said in a statement.

Trade minister, Anne-Marie Trevelyan will travel to the US next week for talks on the steel tariffs and other issues.

Meanwhile, Lord Frost and Maros Sefcovic, the EU’s Brexit commissioner, will continue their talks virtually today.