Deal in danger: On post-Brexit U.K.-EU trade deal

A no-deal Brexit has economic costs and puts at risk the hard-won peace in Northern Ireland

September 08, 2020 12:02 am | Updated 12:02 am IST

British Prime Minister Boris Johnson’s move to set an October 15 deadline for reaching a post-Brexit U.K.-EU trade deal has raised fears of a no-deal scenario . While his threat hangs like the sword of Damocles above the negotiating teams, the British government is reportedly planning a piece of legislation that would overwrite parts of the withdrawal agreement — the divorce deal signed between the U.K. and the EU last year . The agreement had sought to avoid a hard border coming up between Northern Ireland, which is part of the U.K., and the Irish Republic , an EU member. According to the Northern Ireland protocol, signed alongside the agreement, the region is expected to follow some EU rules in trade with the Irish Republic. The hard Brexiteers in Mr. Johnson’s Conservative Party were critical of this clause, claiming that it endangers the U.K.’s sovereignty. Now, the planned domestic legislation, the Internal Market and Finances Bill, will allow U.K. courts to follow new U.K. laws rather than the divorce agreement. Northern Ireland leaders have already called it a “betrayal”. The real risk of cutting the region off the EU customs code is that physical checks could emerge between the two Irelands, threatening the Good Friday agreement that brought peace.

Though the U.K. formally exited the union, it continues to abide by the EU rules during the transition period, which ends in December. The challenge is to reach a trade deal in the absence of which WTO trade rules will kick in, starting January. With weeks to go before the deadline, there is still no consensus on issues such as workers’ rights, environmental regulations, state aid to businesses and the Irish border. While the EU wants the U.K. to adopt rules that are close to its own to ensure a “level playing field” in trade, the British government argues that the whole point of the EU divorce was to break free from common rules. Regarding Northern Ireland, the hard Brexiteers are opposed to any special treatment to the region. The new legislation suggests that the government is hardening its position on Ireland as well. Driven by English nationalist fervour, the British leadership appears to be blind to the economic and political consequences of its hard line. The Brexiteers have already pushed the U.K. into an unenviable position in Europe. A no-deal exit will inflict severe economic costs on the British, at a time when the economy is in dire straits due to COVID-19. Besides, it risks disrupting peace in the island of Ireland. Mr. Johnson and his cabinet should ask themselves whether the no-deal risk is worth taking. They should instead respect the withdrawal agreement, and be flexible in the talks as well as on deadlines. Both sides should focus on reaching a consensus on trade and other future relations, and not on ending the relationship at any cost.

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