Last reviewed 6 June 2022

When this series of articles began, shortly after the 2016 referendum, it contained a prediction that negotiating a trade agreement between the UK and EU could take 10 years.

A seemingly foolhardy comment given that Liam Fox, then the International Trade Secretary, had just said: “The free trade agreement that we will have to do with the European Union should be one of the easiest in human history.” Former Trade Secretary Peter Lilley went even further and said that the deal could be done in one afternoon.

As the sixth anniversary of the referendum approaches, the Government can point to the fact that a deal, the UK-EU Trade and Cooperation Agreement (TCA), is in place but this overlooks the problem that the deal as it stands is incomplete — it barely mentions services — and is in any case in jeopardy as the Government continues to hint that it may act unilaterally to alter a key part of the TCA, the Northern Ireland Protocol.

Problems with the Protocol

There has rarely been a month since it was signed that there have not been problems with the Protocol, but the two sides now seem to have reached the point where they have completely different, and mutually incompatible, ideas of what it means. The European Commission has repeatedly made clear that the Protocol is an integral part of the TCA and one cannot exist without the other. Boris Johnson, his negotiator when the Protocol was agreed, Lord Frost, and the current Brexit negotiator, Foreign Secretary Liz Truss, have all said that the Protocol has caused problems “which the Government had not foreseen” when it was signed.

Meanwhile, Brexit Opportunities Minister Jacob Rees-Mogg has said that the EU's view on the Protocol is of “secondary” importance, and that the UK is entitled to change arrangements. This earned a cheer in Northern Ireland from the Democratic Unionist Party (DUP) which is refusing to return to a power-sharing arrangement with Sinn Féin because it will not accept that the Protocol has introduced a border in the Irish Sea. Of course, this was its raison d'être — as the only alternative was a border between Northern Ireland and the Republic which everyone agreed would be impossible under the terms of the Good Friday Agreement.

Can the UK go it alone?

No, according to Irish Foreign Minister Simon Coveney who said that unilaterally amending the Protocol would involve “deliberately deciding to breach international law, which is something that every former prime minister still alive in Britain has warned against”. But, says Ms Truss, “there are intrinsic faults with the current arrangements which need to be fixed. Needless paperwork has put hundreds of businesses off trading within the United Kingdom.” The Government argues that it has tried to persuade the EU to act reasonably and change the Protocol but as those talks seem to be getting nowhere it is time to bring forward legislation to enable the UK to act unilaterally to amend the key elements of the Protocol.

It was given legal support in this argument by Attorney General Suella Braverman who told MPs that any legislation to override elements of the Protocol would be legal as the EU's implementation of it is “disproportionate and unreasonable”. For the European Commission, Vice-President Maroš Šefčovič said that unilateral action by the UK would only make work on possible solutions more difficult and that he remains convinced that solutions can be found without changing the Protocol. He concluded: “The Protocol, as a cornerstone of the Withdrawal Agreement, is an international agreement. Its renegotiation is not an option.”

If the Government does decide to proceed with legislation to amend the Protocol, this would face a difficult passage through the adoption process with opposition in the Lords likely to delay it for at least a year. A House of Lords briefing paper suggests that any legislation would cover articles 5 to 10 of the Protocol, which govern areas including customs, the movement of goods, VAT and excise, the single electricity market and state aid — any of which could be a flash point with regard to trading relations with the EU.

What next?

Having been pushed to one side by the outbreak of war in Ukraine, Northern Ireland has again disappeared from the headlines in recent weeks as attention has shifted to parties in Number 10, police fines and the Sue Gray report. However, the position remains that the political situation in Northern Ireland continues to be destabilised because the DUP sees the Protocol as creating a border with the rest of the UK, while the EU repeats that there have to be borders somewhere to protect its single market — and the Irish Sea is where Mr Johnson and Lord Frost chose to put them. Clearly the UK can act unilaterally — as it already has with regard to delaying the implementation date for the introduction of import checks on goods arriving from the EU.

However, if measures imposed by the UK create an “imbalance between the rights and obligations” under the Protocol, the EU would have the right to introduce counterbalancing measures. Either side could then ask an arbitration panel to rule on whether safeguard measures or counterbalancing measures had met the Protocol’s requirements. The House of Lords’ briefing paper mentioned earlier noted: “If a party is found not to have complied with the ruling of an arbitration panel in relation to the Withdrawal Agreement, the other party can take cross-retaliation measures under the TCA that covers the UK-EU trade relationship.” Speaking from Dublin, Mr Coveney has warned that the EU could withdraw from the TCA altogether if the UK goes down this route.

Given current problems with world supply chains, inflation and soaring energy costs, it would seem an ill-advised move for either party to the TCA to risk a full-on trade war which would harm economies in the UK and across the Union. If the EU did take action it is likely that it would follow the approach that it took when it was in dispute with the United States and target politically-sensitive products for tariffs to maximise the impact. There have been suggestions that this could involve products such as Scottish salmon of which exports to the EU were worth £372 million last year.

Queen’s Speech and EU law

The recent Queen’s Speech included a Brexit Freedoms Bill which will make it easier for the Government to change inherited EU law without the need for primary legislation and with less parliamentary scrutiny. The Government claims the Bill will help cut £1 billion of red tape for UK businesses — but it has not yet specified the policy areas where it could be used.

What the Government has not mentioned is how it intends to stay in line with new EU legislation bearing in mind that, if it wants to minimise trade disruption at its borders with the Union, identifying EU rule changes coming down the line should be a priority. For example, it largely brought the EU’s chemical safety regime, REACH, into domestic law with the adoption of UK REACH. How will it react to the proposal being considered by the EU to impose potential new restrictions on up to 12,000 chemicals?

The Queen’s Speech also included a Procurement Bill which will enable small contracts to be restricted to UK suppliers. This would diverge from EU law, which sets tight frameworks on public procurement and could also cause problems given that UK policy must also comply with trade agreements with the World Trade Organisation (WTO) and other bodies, which generally stop public bodies favouring UK suppliers.

Finally, a new Data Reform Bill will seek to simplify UK GDPR which is essentially the EU’s General Data Protection Regulation with minor modifications. This was the basis on which the UK was granted “data adequacy” by the EU after Brexit, allowing easy cross-border data flows. Any changes could put that agreement at risk. Data adequacy is up for renewal in 2025 but could be revoked by the EU at very short notice if circumstances change.

Ten years

Given that all these possibilities remain in play, and the likely time scale for any action, the idea that the UK will still be in trade negotiations with the Union 10 years after the Brexit referendum no longer seems fanciful. The arguing over how Brexit should work is far from over. Whether this is a pressing concern of the Union is perhaps open to question. It recently published A contingency plan for transport setting out its plans to deal with problems caused to supply lines by the pandemic and other international difficulties. It includes 46 mentions of Ukraine but not one of the UK.

Brexit bonus

To coincide with the Queen's Jubilee weekend, the Government launched a review on when and where imperial measurements can be used. A legal requirement to use metric measurements when selling packaged or loose goods was first introduced by the EU in 2000. That law states that imperial measurements can be displayed as well as metric ones — but cannot be more prominent. Welcome back pounds and ounces?