Trade

A smoke grenade for the Brexit talks

At first glance, it looks like a grenade thrown into the middle of the Brexit talks.

The FT reports — based on three unnamed sources — that the U.K. plans to undermine key elements of the 2019 Withdrawal Agreement by introducing its own laws overriding some of the agreements provisions on state aid and customs relating to Northern Ireland.

Going back on an international agreement would be huge step and could indeed blow up the talks — as Ursula von der Leyen made clear on Twitter. But is that really what the U.K. is proposing?

No, insists No 10.

“We are fully committed to implementing the Withdrawal Agreement and the Northern Ireland Protocol and weve already taken many practical steps to do so,” Boris Johnsons official spokesman said today in response to the story. In No. 10s telling, the new measures are simply legal safeguards should the Joint Committee (the talks — running parallel to the Frost-Barnier trade negotiation — which are determining how the NI protocol should be implemented) fail to resolve some key issues in time for the end of the transition period.

The Brexit story No. 10 wanted the EU to see today is a different one: Boris Johnsons statement setting a mid-October deadline on the talks.

The new provisions in U.K. law reported by the FT — which will be laid out in the Internal Markets Bill on Wednesday and the Finance Bill after the Budget — are merely “limited and reasonable steps” to “clarify” certain parts of the NI protocol in U.K. law, a No 10 spokesperson said.

What are those steps? The first two, in the Internal Markets Bill, will enshrine “unfettered access” for goods going from Northern Ireland to the rest of the U.K. They will also set out the U.K.s approach to state aid in Northern Ireland (but only within the limits of EU state aid law; elements of which — U.K. officials acknowledge — will continue to apply in Northern Ireland).

The potentially more contentious element will come in the Finance Bill. Here, the U.K. will seek to define (in the event the Joint Committee hasnt done so already) which goods entering Northern Ireland from the rest of the U.K. count as “at risk” of going on to enter the EUs single market and should therefore attract an EU tariff.

Under the terms of the NI protocol, its the Joint Committee that should do this. Officials say the U.K. just wants a legal safeguard so these processes can function on day one after the transition period, should the Joint Committee process not have got that far yet.

Complicated? Yes. And not the grenade thrown into the middle of the Brexit process that it appeared at first glance. But the new proposals are, nonetheless, a new source of tension between the U.K. and the EU at a critical moment.

Its not clear how much of this No. 10 wanted Read More – Source

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