British Prime Minister Boris Johnson. Picture: DANIEL LEAL-OLIVAS/REUTERS
British Prime Minister Boris Johnson. Picture: DANIEL LEAL-OLIVAS/REUTERS

British Prime Minister Boris Johnson said it would be “perfectly legitimate” for the UK to suspend part of the Brexit deal with the EU, though his government still wants to negotiate a solution to their escalating trade spat.

The UK is demanding an overhaul of the divorce agreement it signed with the bloc, arguing that its implementation is causing harm to businesses and communities in Northern Ireland. Johnson has repeatedly threatened to suspend parts of it by using Article 16 of the so-called Northern Ireland protocol, if the bloc does not agree to rewrite it.

Yet doing so carries the risk of severe retaliation from the EU. On Monday, the bloc’s top negotiator, Maros Sefcovic, told Irish lawmakers that any such move would call into question the EU’s broader trade deal with the UK, signed at the end of 2020 to ensure tariff-free commerce.

But in a speech to business leaders and diplomats hours later in London, Johnson showed no indication his government is about to back down.

“If we do invoke Article 16, which by the way is a perfectly legitimate part of that protocol, we will do so reasonably and appropriately, because we believe it is the only way left to protect the territorial integrity of our country and to meet our obligations to the people of Northern Ireland,” he said.

Britain and EU negotiators are locked in talks to try to prevent their testy post-Brexit relationship from further disintegrating.

‘Serious consequences’

Sefcovic, who has previously told EU diplomats he is pessimistic about the outcome of negotiations, said invoking Article 16 “would have serious consequences for our relationship with the UK.”

He said the Northern Ireland protocol and the Brexit Withdrawal Agreement, or divorce deal, had been the EU’s preconditions for entering trade talks with the UK, so the broader trade agreement would be called into question “if these two founding stones were suddenly pulled out”.

Before starting last year’s trade negotiations, the EU had insisted on an agreement about the rights of EU citizens living in the UK and Britons living in the EU; Britain’s outstanding financial contributions to the bloc; and a solution to avoid a hard border on the island of Ireland contained in the Northern Ireland protocol. 

Some in the EU argue that if those arrangements are compromised then so are the conditions that allowed a trade agreement to be signed in the first place.

Positive tone

Sefcovic is due to meet David Frost, his UK counterpart, on Friday, after a meeting last week when the pair said there was a new, more positive tone to the negotiations.

Some member states are pushing for the EU to consider terminating all or parts of the trade agreement if the UK invokes Article 16. That would allow the bloc to impose duties on British goods as soon as nine months after giving notification. 

Frost has argued that such a move would be a “massive and disproportionate retaliation”.

Under the protocol, both sides agreed to an effective customs border in the Irish Sea, with Northern Ireland continuing to follow EU single market rules to avoid creating a hard border on the island of Ireland following Brexit. It means that goods moving into Northern Ireland from Britain are subject to customs checks if they are at risk of being later moved into the EU.

But the settlement has angered unionists in Northern Ireland, while Johnson’s government also blames it for disruption to the UK’s own internal market. It has long said that the conditions for invoking Article 16, which allows either side to take action which addresses “serious economic, societal or environmental difficulties” or “diversion of trade” have been met.

Bloomberg News. More stories like this are available on bloomberg.com

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