LONDON – The British government on Tuesday said it could unilaterally scrap some rules governing trade with Northern Ireland, a highly political move that puts Britain on a collision course with the European Union, 18 months after a trade deal was intended to have extinguished the last fires of Brexit.
Foreign Secretary Liz Truss said a proposed new law would allow the British government to control the rules on trade between mainland Britain and Northern Ireland, which had been painstakingly negotiated in an agreement. with Brussels.
“To respond to the very serious and serious situation in Northern Ireland, we are clear that action must be taken,” Ms Truss said in parliament. “We need to restore the balance in the agreement.”
Ms Truss insisted that she wants to change rather than scrap the agreement governing post-Brexit trade, known as the Northern Ireland Protocol. She also said the issues it addresses could be resolved through negotiations with the European Union rather than unilateral action.
But if such a law is passed, it could tear up part of the trade deal with the European Union and create a new “green channel” that would take away control of most goods flowing from Britain to Northern Ireland. .
Those controls were agreed not to disrupt trade between Northern Ireland, which is a member of the United Kingdom, and neighboring Ireland, which is part of the European Union, once Britain left the bloc.
In her statement, Ms Truss said the protocol had disrupted trade between mainland Britain and Northern Ireland. It is opposed by the area’s trade unionists, who prefer to keep Northern Ireland as part of the United Kingdom, and complain that the rules are driving a wedge between Britain’s north and mainland.
“Some companies have shut down trading altogether,” said Ms. Truss. “These practical problems have contributed to a feeling that the east-west relationship has been undermined.”
The announcement poses several risks to Prime Minister Boris Johnson’s government: a potential trade war with the European Union, rising tensions with the United States, a possible break in the Western alliance in support of Ukraine and an uncertain impact on the politics of Northern Ireland itself.
Of these, a clash with Brussels would be by far the most serious, especially at a time when the UK economy is suffering from the skyrocketing inflation that has plagued other countries as a result of shocks to food and fuel supply.
Bank of England governor Andrew Bailey warned Monday of an “apocalyptic” rise in food prices due to shortages of wheat and other crops caused by the war in Ukraine. The central bank, he said, was “helpless” in the face of price increases, with inflation expected to reach double digits by the end of the year.
If the European Union were to impose retaliatory tariffs on goods coming in from Britain – a big “if” – it would set a new dragging anchor on an economy that some analysts fear is already in danger of slipping into recession. The combination of economic stagnation and rising prices has fueled fears of a return to the dark days of the 1970s.
There is also a risk that relations with the Biden administration and the defenders of Ireland on Capitol Hill will be disrupted. The White House has warned Mr Johnson not to do anything that would jeopardize the Good Friday Agreement, the 1998 pact that ended decades of sectarian violence in the north.
Richard Neal, the powerful chairman of the House Ways and Means Committee, said any legislation unilaterally abolishing elements of the protocol would undermine efforts to negotiate trade rules “at an extremely fragile time.” He suggested that Britain’s move was driven by politics.
“Northern Ireland should not be held hostage in the political process,” Neal said in a statement. “In fact, all parties need to stay on track and continue to work together to find sustainable solutions.”
Ms Truss has not published her proposed new legislation, the start of a long legislative process to make it law, and UK officials say they hope talks with the European Union can continue in parallel so the laws may never be used.
The proposed law would give the British government unilateral powers over tax and subsidy policy in Northern Ireland. However, it remained unclear to what extent the legislation could remove or limit the role of Europe’s highest court, the European Court of Justice, in settling trade disputes.
This would be seen by the European Union as a fundamental amendment to the protocol, rather than the kind of practical solution to border controls it is willing to consider.