EU threatens all-out trade war against the UK after Liz Truss rewrites Brexit deal to protect Northern Ireland peace process
- Brussels has threated a trade war against the UK in strongly-worded statement
- This follows Liz Truss yesterday outlining plans to rewrite parts of Brexit deal
- She said the Protocol is ‘causing the real problems…in Northern Ireland today’
Brussels last night threatened an all-out trade war against the UK after Liz Truss outlined plans to rewrite parts of the Brexit deal to protect the Northern Ireland peace process.
In a strongly-worded statement, EU vice-president Maros Sefcovic warned that the union would ‘respond with all measures at its disposal’ if the UK legislates to override the Protocol.
Miss Truss yesterday told MPs it was now vital to change the arrangement, which is widely blamed for driving a wedge between Northern Ireland and the rest of the UK.
Liz Truss, pictured on Tuesday, also said she was ‘open’ to a deal but that 18 months of talks with Brussels had failed to solve the problem
‘The issue with the Protocol is that although we entered into it in good faith, it has not operated as we foresaw, and it is causing the real problems that we see in Northern Ireland today,’ she told MPs.
She said the Government would bring forward a new law this summer that would scrap EU checks on British goods heading to the Province provided they are not destined to go on to the Irish Republic.
The legislation will also introduce fines for firms caught smuggling goods into the single market by the back door.
And it will end the jurisdiction of the European Court of Justice in trade disputes and give Chancellor Rishi Sunak unfettered powers to vary tax rates in the Province.
The Foreign Secretary said the Protocol, which is part of the Brexit deal, was placing the Good Friday Agreement ‘under strain’ – and said the Government’s ‘first priority’ had to be to protect the peace process.
Boris Johnson moved to calm fears of a trade war by insisting the UK still wanted a negotiated settlement with Brussels.
‘Let’s fix it,’ he said. ‘We don’t want to nix it, we want to fix it and we want to work with our EU partners to do it.’
Pro Europe Brexit protesters in Parliament Square on May 11. In a strongly-worded statement, EU vice-president Maros Sefcovic warned that the union would ‘respond with all measures at its disposal’ if the UK legislates to override the Protocol
Miss Truss also said she was ‘open’ to a deal but that 18 months of talks with Brussels had failed to solve the problem.
She told MPs that the new legislation would be brought forward ‘in parallel’ with negotiations with the EU.
Ireland’s foreign affairs minister, Simon Coveney, said the unilateral action from the UK was ‘damaging to trust’.
Mr Sefcovic said the EU’s ‘overarching objective’ was to find ‘joint solutions’. But he added: ‘Should the UK decide to move ahead with a bill disapplying constitutive elements of the protocol as announced today by the UK Government, the EU will need to respond with all measures at its disposal.’
However, Democratic Unionist Party MP Ian Paisley Jr said the impact of the Protocol was so severe that many firms in the Province were already effectively facing a trade war.
A government source told the Daily Mail the legislation would be brought forward next month, in the hope of rushing it through the Commons before MPs break for the summer in July.
Boris Johnson (pictured on Tuesday) moved to calm fears of a trade war by insisting the UK still wanted a negotiated settlement with Brussels
However, the source conceded ministers face a tough battle to get the new law through the House of Lords, which is dominated by Remainers.
DUP leader Sir Jeffrey Donaldson described the move as a ‘welcome but overdue step’, but suggested his party would continue to block the formation of a new administration with Sinn Fein until the Government shows it is serious about changing the law.
Miss Truss told MPs the new legislation was ‘consistent with our obligations in international law’.
But Simon Hoare, Tory chairman of the Northern Ireland Committee, accused ministers of trying to ‘bob and weave’ around its legal responsibilities.
He added: ‘Respect for the rule of law runs deep in our Tory veins, and I find it extraordinary that a Tory Government need to be reminded of that.’
Six ways she wants to change the law
Relaxing trade checks
The new proposals will create a ‘green channel’ for goods leaving Great Britain whose final destination is Northern Ireland. Liz Truss said ‘trusted traders’ operating in this category would have customs checks ‘removed’. Only goods in the ‘red channel’ which are destined for the Irish Republic will face the ‘full checks and controls applied under EU law’.
Two-track regulation
Firms will face a ‘dual regulatory regime’ allowing them to choose whether to comply with EU or UK rules. Companies wanting to supply Northern Ireland directly could avoid EU checks by choosing to comply with UK rules.
Targeting rule-breakers
Miss Truss said the new law would introduce ‘robust penalties’ for firms caught trying to smuggle goods into the Irish Republic without undergoing EU checks. Britain will also help enforce the rules by sharing goods movement data with Brussels. She said more than a million items of data are already being shared every week.
Taking back control of tax
The new law will restore full control of tax regulations in Northern Ireland to the Treasury. Under the terms of the Protocol, Chancellor Rishi Sunak cannot alter VAT rates in the Province because it has to continue to follow EU rules on the issue. This meant that a recent move to cut VAT on energy-saving products could not be applied in the Province.
Curbing European judges
The minister said the Government would take action to end the continuing role of the European Court of Justice (ECJ) in Northern Ireland. She said the protocol would be brought ‘in line with international norms’. This will involve ending the ECJ’s role as ‘final arbiter’ in trade disputes and replacing it with an ‘arbitration mechanism’.
Vow to avoid a hard border
The Foreign Secretary went out of her way to stress that the UK would do nothing to impose a so-called ‘hard border’ with the Irish Republic. The new legislation is expected to put this guarantee into law.
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