The EU has vowed to use “all measures at its disposal” in response to the government bill that would unilaterally override parts of the Northern Ireland protocol – a step Brussels, and many on Conservative backbenchers, see as a flagrant breach of international law.
While the threat of an economically damaging trade war has captured the headlines, it will not be the EU’s first move.
More immediately, the EU is likely to restart an old legal complaint and trigger new ones over the government’s alleged failure to implement parts of the Northern Ireland protocol. Under the protocol, Northern Ireland remains in the EU’s single market for goods and the European court of justice has jurisdiction.
Last March Brussels started legal action against the government, after the government announced that supermarkets and their suppliers would not have to comply with a host of EU food rules, a unilateral extension of a grace period. The EU suspended its legal action in July as a goodwill gesture to help restart talks, but is now likely to revive this case, which could end with the ECJ imposing daily fines.
The European Commission has other gripes about British implementation of the protocol: including a unilateral decision to waive some checks on cold meats and alleged failure to provide data and build border inspection posts. The complaints, which the UK disputes, could also end up in the ECJ.
However, as one of the clauses in the bill is the removal of ECJ jurisdiction, this legal action is one of the weaker weapons in the EU’s arsenal.
Make life difficult
British participation in the EU’s €96bn (£81bn) Horizon research programme? A memo on financial services to create a talking shop on regulation? A deal on returning asylum seekers to the EU? No chance. These mooted agreements will remain in the deep freeze for the duration of the dispute over the Northern Ireland protocol. The EU’s ambassador to London, João Vale de Almeida, has already “regretted” that researchers were “collateral damage” in the protocol dispute. While London and Brussels will continue to cooperate on sanctions against Russia, any positive agenda will remain stalled.
Individual member states may also choose to put pressure on the government; for instance, France could step up checks on British goods entering the EU. More onerous checks will mean more lorry queues at Dover.
The ultimate penalty is tariffs on British goods, or even the suspension of the entire trade and cooperation agreement between the EU and the UK. When the EU got into a trade war with Donald Trump’s White House, it imposed tariffs on Harley Davidson motorbikes, jeans and bourbon. So it can be expected that Brussels would target iconic British goods in the event of a trade war with the UK.
But imposing tariffs is not a quick option. The EU has to go through the exacting dispute-settlement process outlined in the Brexit withdrawal agreement. First the case would go to the ministerial joint committee led by the foreign secretary, Liz Truss, and the European Commission vice-president Maroš Šefčovič. The next step would be an independent arbitration panel that can impose fines on the guilty party. Only in the event of persistent rule-breaking can the EU-UK trade deal be suspended. EU governments, which are also grappling with the soaring cost of living, hope to avoid what they see as a pointless, costly row.
As tensions rise, the EU will continue to offer talks on existing proposals to ease customs checks and paperwork at the Great Britain-Northern Ireland border. This follows its general approach throughout the Brexit process of not wanting to be the party that pulls the plug on negotiations.
While British negotiators hope tabling the bill will force compromises, the threat has triggered the opposite response: the EU has united in defence of the protocol.