Britain threatens trade war with EU

Chief negotiator Lord Frost states UK will trigger Article 16 unless demands are met

Britain's chief Brexit negotiator David Frost gives a media statement at EU headquarters in Brussels. AP

Britain directly threatened to suspend the Northern Ireland Protocol as talks with the EU ended in deadlock with both sides now heading towards a trade war.

The escalation of language around using the Article 16 provision came after talks with Brussels when the UK's chief Brexit negotiator Lord David Frost issued a statement saying Britain remained “prepared to use the safeguard provisions under Article 16” to protect Northern Ireland.

The chances of a trade war between Britain and the EU had already increased earlier in the day after Brussels’ chief negotiator ruled out any change to the Northern Ireland Protocol

If Britain deploys Article 16, it will almost certainly be seen almost as a declaration of a trade war, with the EU potentially retaliating with tariffs on UK goods

Despite signing a Brexit deal last year, Britain is looking for a new agreement with less onerous custom checks to free up trade in Northern Ireland, claiming the current situation is unsustainable.

Maros Sefcovic the EU’s chief negotiator, had suggested that the EU’s new measures on the protocol will create an “express line” on trade between Northern Ireland and Britain, resulting in a “win-win situation” for all, the EU’s lead negotiator has said.

The bloc also offered to permanently slash customs paperwork by 50 per cent, along with the removal of up to 80 per cent of checks.

“Our solutions can become reality if the UK plays its part,” Mr Sefcovic told the Brexit Institute at Dublin City University.

“But we also made clear that with the full support of the European Parliament and the member states that we will not renegotiate the protocol. To do so would mean to put at risk for stability Northern Ireland and it would be unnecessary because solutions are available within the framework of the protocol.”

But it appears a solution is not close, with Lord Frost stating that any agreement must “constitute a significant change from the current situation”, in particular to safeguard society and the economy in Northern Ireland. No solution would mean triggering Article 16, he said.

While the talks were “intensive and constructive”, the only positive was the suggestion that they could “generate some momentum in our discussions”, Lord Frost added.

But there had been no “substantive progress on the fundamental customs issue” on goods moving from Britain to Northern Ireland.

The statement is likely to prove problematic for Brussels’ chief negotiator after he had earlier said there had a been a “change in tone” from the British side.

In October, the EU offered a series of changes to the protocol that would remove 80 per cent of checks on goods between Northern Ireland and the UK mainland.

“Right now, we need the UK government to reciprocate the significant move the EU has made,” Mr Sefcovic had stated. But his plea seems to have been ignored.

Britain wants further concessions, including the removal of the judges in the European Court of Justice (ECJ) as the arbitrators of disputes.

Removing the ECJ as an arbiter in potential future trade disputes is the main issue on which both sides are unwilling to compromise.

Therefore the likelihood of an agreement remains low.