Blog: Why Boris Johnson’s Britain Is Turning ‘Rogue State’ Over Brexit – Bloomberg

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In less than a week, Boris Johnson dramatically moved Britain several steps closer to a chaotic and bitter separation from the European Union at the end of this year.

The prime minister’s plan to tear up parts of the divorce agreement he secured from the EU only last year has sparked consternation in Brussels and a rebellion in Westminster. The move, which one lawmaker said risks turning Britain into a “rogue state,” could scupper the trade deal the two sides are still thrashing out and damage relations for years to come.

Here’s a guide to what happened and where it could lead.

What has the U.K done?

It plans to break international law. The government is seeking power to undo sections of the Northern Ireland Protocol, part of the legally-binding Withdrawal Agreement it signed with the EU in January. Crucially, the bill says it will “have effect notwithstanding inconsistency or incompatibility with international or other domestic law.”

Suella Braverman, the government’s attorney general, argued that parliamentary sovereignty means it can pass legislation in breach of the country’s treaty obligations. But senior Conservatives warned that doing so risks damaging the U.K.’s standing in other international disputes, including with China over Hong Kong’s national security law. The chairman of the law faculty at Cambridge University — where Braverman studied the subject — described her arguments as “utterly risible.”

What does this have to do with Brexit?

Johnson is rowing back from the policies on Northern Ireland he signed up to as part of the Brexit Withdrawal Agreement. That treaty took Britain out of the EU’s single market and customs union, meaning customs check will be re-imposed at the U.K.’s border. The protocol is designed to prevent a hard border on the island of Ireland — at the cost of putting the customs border in the Irish Sea.

What does the legislation actually do?

The Internal Market Bill will give U.K. ministers powers to:

  • Waive customs paperwork on trade crossing between Northern Ireland and Great Britain
  • Unilaterally define which goods entering Northern Ireland would be liable for tariffs in the event no trade deal is signed with the EU by the end of the Brexit transition period on Dec. 31.
  • Strike down EU state aid rules contained in the Northern Ireland protocol.

These three issues are highly sensitive for the EU and, prior to Johnson’s intervention, the details were still being thrashed out in joint discussions. The bloc is particularly concerned that goods could enter its single market unchecked via the 310-mile land border with Northern Ireland. It’s also worried that U.K. subsidies will put EU firms at a competitive disadvantage.

How has the bloc reacted?

With an ultimatum: the U.K. has three weeks to amend the legislation or it will face legal action. But, crucially, the EU hasn’t broken off trade talks.

Under Article 87 of the Withdrawal Agreement, the Commission can bring the matter to the Court of Justice of the EU, which can then impose financial sanctions. But that legal process could drag on well beyond the end of the transition period.

Under the same article, the U.K. has agreed that for treaty obligations breached before the end of the transition period, it is still subject to ECJ rulings for another four years. But the U.K could choose to ignore them, especially if they include any financial penalties, in what would constitute another treaty breach.

Articles 171 to 181 of the Withdrawal Treaty also provide for a five-member arbitration panel to rule on matters of non-compliance following the end of the transition period. Again, the panel may impose financial penalties. If the U.K. still refuses to pay, Article 178 entitles the EU to suspend the Withdrawal Agreement at will, except the sections on citizens’ rights.

What more could the EU do?

The biggest penalty is one the EU could impose without reference to the courts: it could refuse to enter into any trade or other agreement with the U.K and deprive Britain of access to its biggest and closest economic partner.

Michel Barnier, the EU’s chief Brexit negotiator, has already hinted the bloc could threaten imports of U.K. food and animal products.

“There are also many uncertainties about Great Britain’s sanitary and phytosanitary regime,” Barnier said. “More clarity is needed for the EU to do the assessment for the third-country listing of the U.K.”

The EU is the destination for 60% of British agrifood exports, according to the National Farmers’ Union. Without that listing, U.K. producers won’t be able to send goods into the bloc — or Northern Ireland, which has to follow EU customs and phytosanitary rules.

Why is Johnson taking such a risk?

Johnson has repeatedly said that trade between Northern Ireland and Great Britain must be unfettered after Brexit, and he sees this move as necessary to secure that goal. If the U.K. and EU don’t come to an agreement by the year-end, all goods entering Northern Ireland from Great Britain may have to pay tariffs, a situation the U.K. government says is unacceptable.

But the prime minister also wants to break away from the EU’s state aid rules — a position that has become the biggest obstacle to reaching a wider accord with the bloc over their future relationship.

Downing Street is concerned that the Northern Ireland protocol could threaten its plans to provide state aid to British businesses. Potentially, the EU could block a subsidy to a company in England, Wales or Scotland on the grounds it might help or hurt a business in Northern Ireland, which will still have to follow the bloc’s state aid rules after Dec. 31.

It could also be a negotiating tactic: by threatening the EU with a damaging rupture, he may be trying to encourage the bloc to offer a trade agreement with terms more favorable to the U.K.

Could Parliament stop him?

Some Tory MPs like Bob Neill and Roger Gale are threatening to rebel, but they would need to overcome Johnson’s 80-seat majority in the House of Commons. The prime minister could face a bigger fight in the House of Lords — though it doesn’t have an absolute veto; the upper chamber can only delay legislation approved by elected MPs for a year.

It’s unlikely, at least in the immediate future. One of the key lawyers who brought the successful challenge against Johnson’s plan to suspend — or prorogue — Parliament last year, says it would be harder this time.

Jolyon Maugham said Britain’s unwritten constitution rests upon the concept of parliamentary sovereignty. If lawmakers approve the legislation, the judiciary’s ability to get involved is “very limited indeed, if not non-existent,” Maugham said.

Another route might be to question whether any breach of international law infringes the Ministerial Code, the standards of conduct that all government ministers must adhere to. That rulebook is, however, enforced by the prime minister.

What could the long-term effects be?

  • Trust between the U.K. and its biggest and nearest trading partner risk being dented at the very start of their new relationship.
  • If Johnson’s actions threaten peace in Northern Ireland, there is “absolutely no chance” of a trade agreement with the U.S., House Speaker Nancy Pelosi has warned.
  • The bill could give fresh impetus to nationalists in Scotland, who view it as a Westminster power grab. After next year’s elections, the Scottish National Party is likely to renew its push for another independence referendum. Scotland voted overwhelming to remain a member of the EU.

Whether by accident or design, Johnson brought these other issues to the political forefront this week. They will reverberate long after Brexit is settled.

— With assistance by Nikos Chrysoloras, Jonathan Browning, and Ellen Milligan

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