Brexit: an air of unreality

10/03/2021

Softly, softly, EU Member States are working out their stance, as they agree to support the Commission's plans to launch legal action against the UK for its breaches of the Northern Ireland Protocol.

That much has emerged from a closed-door meeting of ambassadors in Brussels, with a message from governments that Brussels needed to be "calm and firm" in pushing back against the UK's actions.

The EU's chief Brexit negotiator, Maroš Šefcovic, is said to have outlined a twin-track approach, opening with the initiation of infringement proceedings. This would involve a "letter of formal notice" being sent to the UK, demanding an explanation for its action. Usually, two months' notice is given.

This procedure may be followed by a "reasoned opinion", where the Commission would state its view that the UK was in breach of its legal obligations, requiring compliance. Again, two months' notice is usually given, following which proceedings in the ECJ can follow – many more months later.

The Commission is said to have identified legal grounds in the Withdrawal Agreement which would give the ECJ jurisdiction. One presumes, though, that the UK will have calculated that, long before there could be a court hearing, the new deadline of 1 October will have been reached, rendering the action superfluous.

However, in parallel with the infringement proceedings, we are told that Å efcovic intends to send a formal warning to the UK that its actions are a breach of good faith, paving the way for an independent arbitration process.

This, though, is not very much speedier. Three months have to pass after a written notice has been provided to the Joint Committee, whence an arbitration panel is convened within a further 15 days. But the panel then has twelve months to make a ruling.

For all that, the panel may actually be the only option. Disputes may only be resolved though the arbitration procedure and only questions of interpretation of a provision of Union law may be referred to the ECJ, and only then via the arbitration panel. It will be interesting to see on what grounds the Commission might think enable it to go directly to the ECJ via the infringement procedure.

That notwithstanding, Å efcovic has apparently cautioned that his plan is still "work in progress", although one diplomat said they came away with the impression it could be initiated within days.

If, when it is launched, the Commission declares an intention to go for an ECJ ruling, one might expect a sharp reaction from the Johnson administration, which has paraded the Agreement as taking the UK outside the court's jurisdiction.

Perhaps, given the inherent time lag in pursuing this route, a more potent threat is the one reported by the Irish Times. This has Irish foreign affairs minister Simon Coveney, together with Å efcovic, scheduled to brief the Friends of Ireland caucus on Capitol Hill today.

The inclusion in the briefing of Å efcovic is an indication of a concerted effort by Brussels to highlight concerns about Britain's commitment to the Northern Ireland Protocol, at the highest levels in Washington.

The Irish Times tells us that The Friends of Ireland caucus is an influential bipartisan group of Congress members, which was instrumental in securing US political support of the peace process in the 1980s and 1990s.

It is chaired by congressman Richard Neal, a Massachusetts Democrat who also chairs the Ways and Means committee which has power over trade deals – including any future UK-US agreement. Mr Neal and House speaker Nancy Pelosi have previously warned that a trade deal with Britain is contingent upon the Belfast Agreement being upheld.

The briefing will take place a week before the annual St Patrick's Day celebrations, traditionally an opportunity for the Government to highlight issues of concern to Washington.

Irish prime minister Micheál Martin is also expected to update Biden on the latest post-Brexit developments during his virtual bilateral call next Wednesday. The president is said to be "unequivocal" about his support for the Belfast Agreement.

Between these two pincer movements, some form of response on the US government might be expected, to the disadvantage of the UK. What precisely that might entail can only be speculation.

Separately, we are told, business groups and UK exporters are calling on Frost to step back from his abrasive approach to Brussels, asking him to "seek to build a mutually beneficial trading relationship with the EU".

James Withers, chief executive of industry group Scotland Food and Drink, is cited. He represents exporters like Scottish salmon farmers who have lost £11 million in the first two months of trading with the EU this year, and says: "the ball had been dropped diplomatically" by both sides.

"If the first few weeks of any relationship set the tone, there is a lot of worry about. It feels like we are already at a major crossroads. We face a relationship choice, either collaboration or disintegration. We need the diplomatic temperature to be dialled down", he adds.

Shane Brennan, chief executive of the Cold Chain Federation, says that Frost must work to ensure that trading businesses did not become "pawns" in a bigger political game stoking longstanding animosities with the EU.

"Adopting a 'madman' negotiating strategy might be great politics, but it's terrible for food supply chains. The next few months are make or break for the food industry. A strong recovery from lockdown is vital and supply chain instability would shatter fragile confidence", he says.

This, however, comes as food industry representatives – along with other trade groups – have sat on their hands during the years following the referendum, failing to warn their members of what to expect, or expressing their concerns publicly, assuming they actually understood what was happening.

A throwback to this period of seeming incomprehension is evident in a letter from NFU Scotland, to Frost. It is urging him to seek a simplification of the SPS border controls, complaining that the cost and time currently levied by these compliance requirements present a severe hindrance to trade.

The Union is particularly concerned about the trade in seed potatoes, telling Frost that the "failure" by the UK and the EU to agree equivalence on seed potatoes has had 'immediate and grave consequences'. As an EU Member State, Britain exported around 30,000 tonnes of seed potatoes, worth £13.5 million, to Europe each year. The bulk was high-health stock, grown in Scotland.

Currently, trade has come to a complete halt. The union's president Martin Kennedy said: "Many of the export difficulties being experienced stem from the compliance needs associated with export health certificates and customs declarations". He adds that, "The extra cost and time levied by these compliance requirements present a new, and possibly permanent, hindrance to trade unless rectified".

Kennedy wants "immediate priority" to be given to streamlining these forms and processes through digitisation as "an absolute minimum". He then argues that, because the EU and the UK have the same SPS rules in place, agreements on equivalence and the mutual recognition of each other's rules must be accepted to ease the flow of these goods.

Only when either partner makes a change to those SPS rules should it be necessary to require an export health certificate or customs declaration, Kennedy asserts.

After all this time, it seems, Scottish agricultural representatives have learnt nothing, and are building on the ignorance of their colleagues down south. Bluntly, anyone talking of "mutual recognition" isn't in the game, while "equivalence" is the minimum condition for access, but does not exempt exporters from border checks.

From top to bottom, therefore. a sense of unreality prevails. While government seems intent on making things worse, trade bodies blunder around in the twilight with little understanding of what has hit them.

Also published on Turbulent Times.