Comment: UK is risking no trade deal with both the EU and US

By Mark Williams, chief executive, British Egg Industry Council

With little over three months to go, the Brexit battles, that we all thought would be over after the December General Election 2019, continue into October 2020. It is a result of the Prime Minister setting a course for yet another clash with the EU, with little sign of deviation by either side.

The Internal Market Bill, which is currently working its way through the House of Commons has ruffled both Conservative and opposition feathers, causing quite a stir. The problem with the Bill is that if the legislation passes without being amended, it will break international law – albeit in a “specific and limited way” according to the Northern Ireland Secretary, Brandon Lewis. So far as many as five former prime ministers, who led both Conservative and Labour governments have spoken out against the plans. The former chancellor Sajid Javid, and former attorney, Geoffrey Cox has also said they will not support a bill that overrides the Withdrawal Agreement.

For many Conservative MPs, the UK breaching international law is a pill they will not swallow willingly, but despite the fact that a growing number of Conservative MPs have said they will not support the Internal Markets Bill, it is still likely to pass. Both Conservative rebels and the Labour opposition are likely to attempt to amend the Bill to give parliament rather than the Government the power to override the Withdrawal Agreement if necessary. However, the list of Conservative MPs prepared to rebel is said to be around 30, this may grow. The situation is reminiscent of 2019, before Johnson’s Government won a massive majority, with parliamentary battles and internal party dissent to manage. The Government has said under pressure it will look at ways to amend to Bill to make it more palatable to those Tory rebels.

The crux of the issue is again Northern Ireland, and the proposed customs border inside the UK between Northern Ireland and mainland Britain. Last year the Prime Minister managed to convince the EU to remove the Irish backstop, that could have kept the UK in a customs union with the EU and replaced it with a customs border down the Irish sea between Northern Ireland and the mainland. It could be argued this was like throwing the DUP under the bus, to get most of the UK out of the customs union with the EU. This is now unacceptable for the Prime Minister, and the Government seems prepared to break international law over it. The amount of reputational fallout from such a move will have significant ramifications for the UK on the international stage.

The Prime Minister and the Government may indeed get its way, the Internal Market Bill becomes law, and the Withdrawal Agreement is overridden. If this happens, in a best-case scenario, Brussels moves past this and concludes a trade agreement with the UK – albeit begrudgingly and with considerable ill will on their part. Brussels and EU members have openly been furious with UK plans to override an agreement both sides conceded things to reach. The EU is almost certain to take legal action, but the Government would have already accounted for this. What the Government may not have accounted for is how badly this might damage the UK’s chances of concluding a trade agreement with the US. The Speaker of the US House of Representatives, Nancy Pelosi, a strong opponent of the Trump administration, has said if the UK breaks international law in a way that damages the Good Friday Agreement then a trade agreement with the US is off the table. In the US, Congress must approve all trade agreements before the President is able to sign them into law.

The UK could end up in a situation where it leaves the EU without a deal and continues to trade with the bloc on WTO rules, and it could also lose out on a potential trade deal with the US. Given the economic impact of COVID-19, rising unemployment, this is an incredibly dangerous set of circumstances to be playing with. This would be an incredibly dire situation for the UK economy, and British agriculture and farming.

 

 

 

 

 

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