The UK government is on Friday expected to drop its demand to remove the European Court of Justice as the ultimate arbiter of trade rules in Northern Ireland as it seeks to de-escalate tensions with Brussels.
Brexit minister Lord David Frost will tell his EU counterpart Maros Sefcovic that governance issues can wait until they have agreed on practical ways to improve the flow of goods between the region and the rest of the UK, according to officials.
The expected climbdown by London confirms a UK briefing given to European journalists last week that was later vehemently denied by Downing Street.
The EU has refused to discuss the ECJ’s role as the referee of single market rules despite weeks of UK pressure, including a threat to trigger the Article 16 process, which temporarily suspends parts of post-Brexit trade arrangements in Northern Ireland.
The Northern Ireland protocol kept the region in the single market to avoid a trade border on the island of Ireland when Britain left the EU. Instead, there are checks on east-west trade across the Irish Sea.
EU members have made clear that using Article 16 would be met with a tough response, including the possible suspension of the entire post-Brexit trade agreement.
The US has also put pressure on the UK to drop its threat, which it fears could undermine the 1998 Good Friday peace agreement in Northern Ireland. Washington has refused to lift tariffs on UK steel and aluminium until London shifts its position.
With London’s retreat, UK-EU talks will now focus on reducing customs procedures and food safety checks that have created big problems for companies and consumers in Northern Ireland and then return to governance issues.
“Since the EU won’t address all the issues we put on the table now, we are willing to look at interim solutions which deal with the most acute problems,” said a UK official. “But any such interim agreement must put a stop to the ECJ settling disputes between us and the EU, now and in the future.”
The UK has now indicated that it could accept an arbitration mechanism of the kind that governs other elements of the EU-UK withdrawal agreement, which leave the ECJ as the arbiter of EU law but puts the court at one remove from resolving disputes over the protocol.
Meanwhile the European Commission will on Friday propose a law to ensure Northern Ireland continues to receive medicines from the UK.
Pharmaceutical companies have said it would be unviable to comply with a bespoke regulatory regime for the region. To prevent them stopping supply, Brussels will recognise drugs authorised by the UK regulator supplied from Great Britain, as long as they are labelled for UK use only.
The changes will also allow new cancer and other drugs to be used as soon as they are licensed by the UK.
However, the two sides remain far apart on core trade issues, although the UK has watered down its demand for completely frictionless trade between mainland Britain and Northern Ireland. At least 200 UK companies have stopped sending goods to Northern Ireland since the UK left the EU, according to British officials.
Brussels has offered to reduce checks on goods that are heading for Northern Ireland and unlikely to move onward into Ireland and the wider single market, such as supermarket deliveries. It says one form for each lorry would cut customs checks in half. Food and animal health checks would come down by 80 per cent.
“Their proposals do not remove a single product from having to go through customs processes as they would if it were an international border — all they do is reduce the number of boxes on the form, leaving the most onerous ones untouched. Only having to complete 20 boxes on a form instead of 40 doesn’t really feel like a big reduction in checks,” said one UK official.
London wants to conclude talks early next year before campaigning begins for elections in Northern Ireland in May. The Democratic Unionist party, the largest in the devolved assembly, continues to oppose the protocol, while Sinn Féin, the nationalist party tipped to overtake it in May, supports it.
Source: Economy - ft.com
