Brexit trade war with EU will have 'very unpleasant consequences' for UK

Secretary of State for Levelling Up, Michael Gove, has said today he is confident the UK will not enact Article 16 in the Brexit standoff with the EU. The UK Government is threatening to suspend parts of the Brexit trade deal, as Prime Minister Boris Johnson and Lord David Frost argue the Northern Ireland protocol is not working. Mr Gove said yesterday: “Everyone recognises that the application of the protocol at the moment is causing some disruption to trade and is causing inconvenience at the very least to citizens of Northern Ireland. “I do believe that there is a constructive approach that’s being taken by the [European] Commission and Lord Frost has signalled that while, of course, it’s always possible that Article 16 may require to be invoked, we’re confident that we’ll be able to make progress without it.”

The threat of a trade war between the UK and EU looms, but Jonathan Portes, Professor of Economics and Public Policy of King’s College, told that this would have unpleasant consequences for Britain and Northern Ireland.

He said: “What we have seen over the past few days is the UK Government realising the very unpleasant consequences if it overplays its hands and triggers Article 16.

“Once you start a war it is difficult to stop it, because neither side want to be seen to lose which would be very damaging.”

Professor Portes explained that the EU could take a number of different avenues to hit the British economy.

He continued: “What the EU can do to retaliate isn’t completely clear, but it can suspend the current equivalence decision on data access which allows companies to transfer data from the EU to the UK, and that would be pretty damaging to some UK businesses.

“It could enforce customs procedures more strictly. Within the law there is a degree of discretion on how strict you can be in terms of applying every formality, so they could make ramp that up and make life more difficult British exporters.

“The legality of this is unclear, but the EU could also impose targeted tariffs on car parts, which would also be quite damaging.”

The EU has warned this week that “genuine urgency” is needed to to resolve the dispute over the operation of the Northern Ireland protocol.

But Professor Portes argues that the situation could be even more urgent for the UK, as a trade war would be more damaging north of the English Channel.

The expert warned that the EU has more “clout”.

He said: “Common sense says here that the EU is much bigger than we, they have most of the clout here, and we know that some of the claims that the German car industry would force the EU to concessions during Brexit negotiations ended up being nonsense.

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Mr Sefcovic called on the UK government to “make a clear move towards us in the area of sanitary and phytosanitary [SPS] controls to reciprocate the big move made by the EU”.

He added: “It is essential that the recent change in tone now leads to joint tangible solutions in the framework of the protocol.

“This remains the case particularly for the uninterrupted long-term supply of medicines from Great Britain to Northern Ireland.

“There is a genuine urgency. We welcome the progress this week. We now need to press on and get this crucial issue across the line.

“This is a real test of political goodwill. The EU, for its part, is confident that our proposed solution, addressing all concerns raised by industry, would bring much needed clarity and foster a positive political momentum.”