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When the European Commission initiates legal action against Britain: will the Brexit trade negotiations fail?

When the European Commission initiates legal action against Britain: will the Brexit trade negotiations fail?

London, UK  — The European Commission formally took legal action against Britain last week over passing legislation that could breach the legally-binding withdrawal agreement (also known as the divorce agreement) between the European Union (EU) and the United Kingdom (U.K.).

The U.K. exited the EU earlier this year, entering into a transition period where the U.K. would adhere to EU trading rules and remain within its customs union until a trade deal is reached. Britain now wants a free trade agreement, with no border tariffs or quotas on goods.

Ongoing trade negotiations between both parties were jeopardized when the House of Commons passed the internal market bill last week. The internal market bill sets out rules for the operation of trade between England, Scotland, Wales, and Northern Ireland — after the end of Brexit’s transition period.

The internal market bill allows U.K. ministers to modify or “disapply” rules relating to the movement of goods if both the U.K. and the EU are unable to reach an alternative through a trade deal. U.K. ministers will have the power to override previously agreed-upon obligations on governmental support for businesses. So, will this be a bruising experience for both parties?

Has the Brexit withdrawal agreement been violated?

The withdrawal agreement, executed earlier this year, addresses border and customs arrangements, particularly along the border between the U.K. and the Republic of Ireland. Other protocols in the agreement include topics like money, citizens’ rights, and dispute resolution mechanisms.

The goal of the withdrawal agreement is to avoid a “hard border” in Ireland, where customs checks are mandatory. This ensures that businesses on both sides of the border don’t have any unfair advantages over each other.

E.U. members are angry that the internal market bill explicitly allows U.K. ministers to exercise powers granted under the bill even when those are incompatible with international laws. While supporting the legislation, Northern Ireland’s Secretary of State Brandon Lewis admitted that this agreement breaks international laws.

The U.K.’s devolved administrations are concerned about how the internal markets will operate post-Brexit and what the standards for setting regulations will be.

EU’s Response

The European Commission’s President Ursula von der Leyen and chief negotiator, Michael Brainer, opposed Britain  — saying that the bill breaches good faith obligations. The EU representatives believe that if adopted, this bill will contradict the protocols in the withdrawal agreement. According to the commission, the U.K. must respect international standards in order to access European markets. 

Daniel Ferrie, spokesperson to Michael Brainer for the EU-U.K. negotiations, told Current Affairs Times that some of the conflicting issues are speculative. He said the British Prime Minister Boris Johnson and Ursula Leyen have issued statements endorsing the importance of reaching an agreement. These statements also indicate that the commission’s action is the first step in legal proceedings against Britain.

Internal Politics in Britain

Ministers who voted in favor of this legislation believe it’s necessary to protect the integrity of the U.K.’s internal market. The ministers are treating the legislation as a backup plan should Brexit trade negotiations fail. Northern Ireland supports this bill, confirming that businesses there are positively responding to the legislation.

The internal market bill obtained a parliamentary majority of 340 to 263 votes in the House of Commons despite resistance from opposition parties. According to Prime Minister Boris Johnson, it is now up to the EU to avoid a no-deal scenario. 

Johnson wants a free trade deal along the lines of the one that the EU has with Canada, allowing for goods to be traded without tariffs or quotas. Johnson believes that if the EU does not agree, the U.K. can trade solely on the World Trade Organization’s (WTO) rules. 

Thousands of jobs are now at stake on both sides, and the COVID-19 crisis makes the situation worse, especially in countries that are close to Britain.

Interestingly, every former prime minister of Britain including Tony Blair and Theresa May, opposed this bill, calling it shameful and “ a flagrant breach of international law.” It is obvious that the internal market bill will be vehemently opposed in the U.K Parliament’s House of Lords where it now has to be approved. 

Henry Crowling, Communications Officer at the House of Lords told Current Affairs Times that the House of Lords is not able to speculate on how individual members may vote on the bill but it is currently up to the government to decide on when to bring the bill forward.

Opposition from Scotland

Last week, Britain witnessed burning opposition from Scotland with the resignation of  Lord Keen, Scotland’s Advocate General. Lord Keen categorically mentions in his resignation letter that he finds it difficult to reconcile with the government’s policy intentions.

Linda Martin, Press Secretary to the Secretary of State for Scotland told Current Affairs Times that — post-Lord Keen’s resignation both the Office of the Advocate General and the Office of the Secretary of State for Scotland are operating normally.

Scottish politicians believe that the negative consequences of the internal market bill could be significant given Scotland’s small manufacturing base. Under the U.K.’s constitutional rules, consent from the Scottish Parliament is required. If the bill is enacted without Scotland’s consent, it could create a serious rift within U.K. governmental bodies.

Can the U.K. trade only on WTO’s rules?

WTO rules don’t apply nationally. Therefore, the U.K’s claim of being able to bypass the EU may not have any merit.  In an email to the Current Affairs Times, the WTO’s media office emphasized that the U.K’s future rights and obligations within the WTO paradigm will be shaped by the EU-U.K. separation agreement and subsequent WTO negotiations.

It will be interesting to see if the WTO even negotiates with the U.K. Was this an intelligent move by Britain?

Image Credit: Chakrapong Worathat / EyeEm – Getty Images

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Afia is a lawyer, journalist, an avid traveler, an avid reader, a foodie, and an amateur singer. She enjoys instrumental music with her glass of wine ?

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