Brexit trade talks have plunged into crisis on the eve of a penultimate round of negotiations in London, after the United Kingdom warned the European Union that it could effectively override the divorce deal it signed unless the bloc agrees to a free trade deal by October 15.
Tensions mounted on Monday, with chief EU negotiator Michel Barnier saying he was “worried” about negotiations, and that he will seek clarification from London about plans to renege on commitments.
The UK is reportedly planning new legislation that will override key parts of the Brexit Withdrawal Agreement – a step that, if implemented, could jeopardise a treaty signed in January and stoke tension in Northern Ireland.
Sections of the internal market bill, due to be published on Wednesday, are expected to “eliminate the legal force of parts of the withdrawal agreement” in areas including state aid and Northern Ireland customs, the Financial Times newspaper said on Monday, citing three people familiar with the plans.
If no deal is agreed, both sides should “accept that and move on”, British Prime Minister Boris Johnson will say later on Monday. In this scenario, the UK would have a trading relationship with the bloc like Australia’s, which would be “a good outcome”, Johnson will say.
Johnson will also say there is no sense in thinking about timelines beyond October 15.
“If we can’t agree by then, then I do not see that there will be a free trade agreement between us, and we should both accept that and move on,” he will say.
As the prospect of a no-deal Brexit loomed, sterling fell against the dollar and euro.
The UK left the EU on January 31, but talks aimed at clinching a new trade deal before the end of a status-quo transition arrangement in December have so far snagged on state aid rules and fishing.
Without a deal, nearly $1 trillion in trade between the UK and the EU could be thrown into uncertainty, including rules over everything from car parts and medicines to fruit and data.
European concern over UK’s reported plan
The reported plan to undermine the Withdrawal Agreement was condemned by parties on both sides of the Irish border and surprised some in Brussels.
“If the UK chose not to respect its international obligations, it would undermine its international standing,” said one EU diplomat.
“Who would want to agree trade deals with a country that doesn’t implement international treaties? It would be a desperate and ultimately self-defeating strategy,” the diplomat said.
“Without correct implementation of the Withdrawal Agreement, I cannot imagine the EU would conclude a treaty with a country that does not abide by its treaty commitments,” said another EU diplomat.
Irish Foreign Minister Simon Coveney, who played a key role in negotiating the withdrawal agreement and Northern Ireland protocol, said on Twitter that the reported move “would be a very unwise way to proceed”.
Senior members of Northern Ireland’s Sinn Fein and SDLP parties, the region’s two largest Irish nationalist groups, also criticised the UK’s reported plan.
Asked about the report in the Financial Times, British Environment Secretary George Eustice said there might be some minor “legal ambiguities” that needed to be tidied up over the Northern Irish protocol.
“We are not moving the goal posts,” he told Sky News broadcaster.
Barnier said everything that has been signed “must be respected”, as he planned to discuss the FT report with his British counterpart David Frost during this week’s talks.
“The important thing for me is what the prime minister says and does, and what the British government itself says and does,” he said.
Regarding Northern Ireland, Barnier insisted that under the withdrawal deal it will continue to apply the EU’s single market rules, intended to avoid a “hard border” with Ireland but which would effectively create a trade border in the Irish Sea.
The move is meant to avoid reviving sectarian tensions between Ireland and Northern Ireland that were largely calmed by the Good Friday Agreement of 1998.
“No land border is the pre-requisite for peace since the end of the conflict … and it’s the pre-requisite for a united and coherent economy for the entire island, and also to respect the single market,” Barnier said.