EU issues ultimatum to UK: withdraw bill or trade talks collapse

EU and UK officials will on Wednesday (24 February) discuss the possibility of extending the ‘grace periods’ that exempt goods crossing the Irish Sea border from new customs checks introduced by the new trade arrangement. EPA-EFE/NEIL HALL

The EU issued a stern ultimatum to the UK on Thursday (10 September) to withdraw its bill overriding the Irish Protocol or talks on an EU-UK trade deal will collapse.

Following an emergency meeting between European Commission Vice-President Maroš Šefčovič and Cabinet Office minister Michael to discuss the Internal Market bill, the EU executive demanded that Boris Johnson’s government “withdraw these measures from the draft Bill in the shortest time possible and in any case by the end of the month.”

Šefčovič said that if the bill were adopted, it would constitute an “extremely serious violation” of the withdrawal agreement and of international law.

“By putting forward this Bill, the UK has seriously damaged trust between the EU and the UK. It is now up to the UK government to re-establish that trust,” the Commission added, warning that it “will not be shy” in taking legal action against London.

In response, Gove said that during the meeting with Šefčovič he had “made it perfectly clear that we would not be withdrawing this legislation”.

Tabled on Wednesday, the Internal Market Bill, designed to govern trade within the UK’s four nations, gives UK ministers powers to modify or “disapply” rules relating to the movement of goods that will come into force from 1 January, when the UK leaves the EU’s single market, if a successor trade agreement is not reached. It would also overturn state aid rules in Northern Ireland.

That would breach the Irish Protocol in the Withdrawal Agreement which took the UK out of the EU in January, and requires the UK to keep to the EU’s customs code in Northern Ireland to ensure that there is no return to a hard border between Northern Ireland and the Republic.

In a letter, the UK government’s top legal advisers stated that the bill’s provisions would be “a clear breach of the withdrawal agreement and of the UK’s international law duty to act in good faith with respect to its treaty obligations”.

Johnson’s government argues that the bill is a ‘safety net’ to ensure that there will be unfettered access for goods moving from Northern Ireland to Britain and to protect the Good Friday peace Agreement signed in 1998.

“It is essential that, in the implementation of the Protocol, nothing undermines those fundamental principles,” the UK government stated.

That was rejected by the Commission which stated that “the EU does not accept the argument that the aim of the draft Bill is to protect the Good Friday (Belfast) Agreement. In fact, it is of the view that it does the opposite.”

European officials have been shocked by the bill, which many see as a negotiating tactic to force concessions from the EU.

Germany’s Ambassador to the UK, Andreas Michaelis tweeted: “In more than 30 years as a diplomat I have not experienced such a fast, intentional and profound deterioration of a negotiation. If you believe in partnership between the UK and the EU like I do then don’t accept it.”

The bill will be debated by UK lawmakers on 14 September but there are indications that, even if trade talks with the EU collapse, it will not pass into law before the end of the year.

Although Johnson’s Conservative party has an 80 seat majority in the House of Commons, no lawmakers defended the bill during the first discussions of the bill in the House of Lords on Thursday. Former Conservative leader Michael Howard, a staunch Brexiteer, warned that it would damage the UK’s “reputation for probity and respect for the rule of law” while fellow Brexiteer, Norman Lamont, urged the government to “think again”. The Lords have the right to delay legislation by one year.

The row over the bill has derailed the eighth round of trade talks between the EU’s Michel Barnier and UK chief negotiator David Frost.

After the round concluded on Thursday evening, Frost indicated that little progress had been made.

“These were useful exchanges. However, a number of challenging areas remain and the divergences on some are still significant,” he said in a statement.

Frost added that his team “remain committed to working hard to reach agreement by the middle of October” and that talks would resume in Brussels next week.

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