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Is the UK Government serious about breaking international law, and risking a trade war with the EU? The UK’s mixed messaging probably amounts to a U-turn.


Is the UK Government is risking a trade war with the EU by breaking its commitments on Northern Ireland? What are the options open to the EU in international law if the UK breaks the Withdrawal Agreement?




Professor Derrick Wyatt, QC, Member of the International Academic Council of FIDE, asks whether the UK Government is risking a trade war with the EU by breaking its commitments on Northern Ireland. He examines the options open to the EU in international law if the UK breaks the Withdrawal Agreement. The UK Government is still pressing ahead with draft legislation which it admits will break international law, yet it has signalled it will only apply that legislation consistently with international law. This is reminiscent of President Clinton’s confession that he smoked marijuana, but did not inhale. Nevertheless, it now seems likely that the UK will resolve any difficulties and disagreements which lie ahead through the lawful channels provided in the Northern Ireland Protocol and the Withdrawal Agreement. If the UK Government intends its mixed messaging to signal a u-turn, it is a welcome u-turn, from the perspective of the rule of law. Meanwhile, trade negotiations between the EU and the UK continue, and there is growing optimism that they will be brought to a successful conclusion.


The EU/UK Withdrawal Agreement and the Northern Ireland Protocol (NIP)


Dismantling the hard border between Ireland and Northern Ireland made a significant contribution to the success of the peace process and the Good Friday Agreement and the establishment of power-sharing in Northern Ireland.  After the UK Brexit referendum in 2016, the UK and the EU were agreed that Brexit must not result in a return to a hard border, and in 2018 they agreed a Northern Ireland Protocol (NIP), as part of the Withdrawal Agreement, to ensure that this did not happen. In 2019 the new UK Government of Boris Johnson insisted on renegotiating the NIP, and this amended agreement included special customs and other arrangements for Northern Ireland that would ensure frictionless trade across an open border between Northern Ireland and Ireland, either in the event of a post-Brexit free trade agreement between the UK and the EU or in the event of no-deal and a future trade relationship based on WTO terms.
 

The UK Government introduces draft legislation to disapply key terms of the NIP and admits the rules will break international law


Then the UK Government of Boris Johnson dropped a bombshell, in the shape of clauses in the United Kingdom Internal Market Bill which, the Government stated, would breach, “in a limited and specific way”, key provisions of the NIP.  The controversial provisions would allow the UK Government to disapply checks and paperwork on the movement of goods from NI to the rest of the UK, and to disapply the application of EU state aid rules in Northern Ireland. These provisions of the NIP are part of a package of provisions designed to ensure that goods sourced in Northern Ireland have free access to the EU internal market across the open border between Northern Ireland and Ireland. Disapplying these provisions could require alternative measures to be put in place which could put the open border at risk.

The controversial provisions of the UK Internal Market Bill which the UK Government admits would breach international law have been analysed in detail in an article recently posted on FIDE’s website by Christopher Muttukumaru, Chair of FIDE’s International Academic Council.[i]

Further breaches of the NIP are in the pipeline. The UK Government plans to introduce clauses in a Finance Bill which would allow suspension of the provisions in the NIP which provide for the imposition of customs duties on goods moving from the rest of the UK to Northern Ireland, if those goods are at risk of accessing the EU market over the open border between Northern Ireland and Ireland.


The Government’s plan to break international law attracted criticism at home and abroad, and it accepted an amendment to its draft legislation, though the amendment fell short of bringing the legislation into line with international law


The UK Government’s admission that the bill would breach international law attracted strong criticism both from opposition parties, and from its own supporters in the UK Parliament. The UK Government was accused of undermining the rule of law, and damaging the UK’s reputation as a country which honoured its international obligations. The European Commission stated that it regarded the UK’s conduct as “undermining trust” and said it would “not be shy” in initiating dispute settlement procedures under the Withdrawal Agreement if the UK Government did not withdraw the offending provisions before the end of September.[ii] UK Foreign Secretary Dominic Raab visited the United States and reassured US politicians that the UK would do nothing to threaten the Good Friday Agreement, while some US Senators said they would vote against a UK-US trade deal if the UK failed to honour the NIP.

The UK Government then accepted an amendment to its draft provisions, tabled by one of its own supporters, which would require a further Parliamentary vote before the provisions could be applied. The amendment will not prevent the controversial provisions breaking international law if they are enacted, since they are stated to override any inconsistent international law. But the amendment was accompanied by what seems to be a highly significant statement by the UK Government.

 
It seems that the UK Government only plans to use its controversial powers to override international law where this would be consistent with international law


A statement issued by the Prime Minister’s office (the “Downing Street Statement), announced that if the UK Government applied the controversial provisions, or any similar subsequent provisions (such as the Finance Bill referred to above), “it would always activate appropriate formal dispute settlement mechanisms with the aim of finding a solution through this route.”[iii] This sounded distinctly conciliatory, and a commitment to respect the dispute settlement mechanisms in the Withdrawal Agreement, but a UK Government Minister refused to confirm that if those mechanisms produced an arbitration award against the UK, the UK would comply.  

It will be noted that the amendment accepted by the Government would make the exercise of the proposed powers to override international law subject to a further vote in the House of Commons (and debate in the House of Lords). The Downing Street Statement said that the UK Government would only ask Parliament to support its use of powers to breach the NIP if, in its view, the EU were engaged “in a material breach of its duties of good faith or other obligations, and was thereby undermining the fundamental purpose of the NIP”. This commitment would also apply to similar subsequent provisions, such as the Finance Bill referred to above. The Statement goes on to give examples of breaches of the NIP by the EU which would trigger a UK response, and these alleged breaches include EU insistence on the excessive application of tariffs on goods moving from the rest of the UK to Northern Ireland, and an unreasonable refusal by the EU to recognise UK food safety standards for agricultural products; I explain the relevance of these issues for Northern Ireland and for the rest of the UK, below.

Despite the requirement of a further Parliamentary vote, and the contents of the Downing Street Statement, the enactment into UK law of the controversial clauses, or any similar subsequent clauses, would still amount per se to a breach of the Withdrawal Agreement, and thus a breach of international law, as the UK Government has acknowledged. This is because any Government regulations made under the clauses are stated to apply notwithstanding any relevant international law that may be inconsistent or incompatible with those regulations. The clauses could only be reconciled with the Withdrawal Agreement if the clauses themselves were amended so as to make it clear that the UK Government could only apply them in ways consistent with international law.


Are the UK Government’s mixed messages a sign it has had second thoughts about breaking international law?


The significance of the Downing Street Statement is that the UK Government is now describing UK draft legislation, which it admits will breach international law when enacted, as necessary to enable it to respond to anticipated prior breaches by the EU of the Withdrawal Agreement and the NIP. Such a response might amount to a suspension of provisions of the NIP under Article 60 of the Vienna Convention on International Treaties, or to a countermeasure under customary international law.  Such a response would not itself be a breach of international law by the UK at all, providing that there was actually, in fact and in law, a prior breach of international law by the EU, and the UK response was a proportionate one. The UK Government also commits under the Downing Street Declaration to initiate appropriate dispute settlement mechanisms if it ever uses its powers to override international law.

The UK Government’s narrative on potential disapplication of provisions of the NIP has undeniably changed. The UK Government is still pressing ahead with draft legislation which it admits would break international law, yet it has signalled it would only apply that legislation consistently with international law. If the UK is signalling a u-turn, it is a welcome u-turn to make, from the perspective of compliance with the rule of law.


Disagreements over EU recognition of food safety standards could block the movement of foodstuffs from the rest of the UK to Northern Ireland


One of the potential breaches by the EU of its obligations that the Downing Street Statement identifies is a refusal on the part of the EU to recognise UK food safety standards for agricultural products. The relevant standards are known as sanitary and phyto-sanitary (SPS) standards, and the Statement refers to a refusal by the EU that is “manifestly unreasonable or poorly justified”. The UK claims that the EU has threatened to withhold recognition of these standards; the EU says it can only take decisions on equivalence after the UK has given a clear indication of its plans for SPS after the end of the year.

The legal position in international law is that the EU is prohibited by the WTO SPS Agreement from arbitrarily discriminating against the UK if its standards are functionally equivalent to EU standards. The EU is aware that UK SPS standards are currently identical to EU standards, and they are hardly going to change as the clock strikes 12 on New Year’s Eve. The practical position appears to be that the UK has agreed to provide any necessary paperwork to the EU by the end of October, and the EU will take decisions on functional equivalence before the end of the year.

If the EU does not take such decisions before the end of the year, or does so, but finds some standards are not functionally equivalent to EU standards, this would have implications for the movement of goods between the UK and the EU, and between the rest of the UK and Northern Ireland. Under the NIP, the UK authorities are bound to apply EU SPS standards in Northern Ireland, so would be bound to block the movement of any non-compliant foodstuffs from the rest of the UK into Northern Ireland.


In the event of no-deal, UK authorities would be bound by the NIP to impose tariffs on goods moving from the rest of the UK to Northern Ireland if those goods were “at risk” of transit into the EU


In addition, the UK authorities are bound to apply the EU Common Customs Tariff on goods moving from the rest of the UK to Northern Ireland, if these goods are “at risk” of transit across the open border into the EU. Goods are to be regarded as at risk of such movement and subject to tariffs unless they comply with criteria established by the Joint Committee. If the Joint Committee fails to agree such criteria, all goods moving from the rest of the UK to Northern Ireland would be subject to the same EU tariffs which would apply if the goods were moving from UK to the EU. In the event of a no-deal on a future free trade agreement, this could lead to the UK imposing tariffs at the EU level on goods moving from the rest of the UK to Northern Ireland, and, in the case of agricultural foodstuffs, these tariffs could be high.


The UK Government has said that having the right in UK law to disapply provisions of the NIP is a vital insurance policy to prevent a “blockade” of Northern Ireland in the event of a no-deal


The UK Government has defended its position on the NIP is a number of ways. It has said that the EU has adopted unreasonable interpretations of the NIP in negotiations in the Joint Committee, which has the job of putting into place implementing rules such as those relating to the application of EU tariffs on goods moving to Northern Ireland from the rest of the UK. I have explained above that in the absence of agreement on these rules the UK would be bound to apply to all goods moving from the rest of the UK to Northern Ireland any tariffs applicable under EU law on goods moving from the UK to the EU.

The UK Government has also said that, in the event of a no-deal, the application of the NIP would lead to a threat to the integrity of the United Kingdom, and to a blockade on trade between the rest of the UK and Northern Ireland. I have explained above how non-recognition of SPS standards and/or a no-deal could lead to restrictions on the movement of goods between the rest of the UK and Northern Ireland. The UK Government said it hopes that it would not need to use the powers to break international law which the new legislation would place at its disposal,  but that they amount to a vital insurance policy, to protect the integrity of the UK in the event of a no-deal on a future trade agreement.


The UK Government does not need the insurance policy of breaking international law – it has a lawful insurance policy under the NIP


The UK Government does not need an unlawful insurance policy in order to deal with problems which might result from restrictions on the movement of goods from Northern Ireland to the rest of the UK, and vice versa, under the NIP. The UK Government already has an entirely lawful insurance policy, in the form of the right to take unilateral safeguard measures under the NIP if the application of the NIP leads to serious economic difficulties.


Article 16 of the NIP gives the UK the right to take unilateral safeguard measures if the application of the NIP leads to serious economic difficulties


Article 16 of the NIP give the EU and the UK the right to take unilateral safeguard measures if the application of the NIP “leads to serious economic, societal, or environmental difficulties that are liable to persist.”

Such safeguard measures “shall be restricted with regard to their scope and duration to what is strictly necessary to remedy the situation,” and priority shall be given to such measures as will “least disturb the functioning” of the NIP.

If one party takes safeguard measures, and this creates an imbalance between the rights and obligations under the NIP, the other party may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance. Once again, priority shall be given to such measures as will “least disturb the functioning” of the NIP.

The taking of safeguard measures is subject to the procedures laid down in Annex 7 to the NIP, which require the EU and the UK to notify each other promptly if they are considering taking safeguard measures, and to enter into consultations with a view to finding a commonly acceptable solution. A party must not take safeguard measures until a month has elapsed from notification of the other party, unless consultations have concluded before that time. In exceptional circumstances, a party may apply “forthwith the protective measures strictly necessary to remedy the situation”.

Article 16 does not specify how long serious economic difficulties must be “liable to persist” before safeguard measures can be justified. The significance of this question is diminished by the fact that any safeguard measures must be limited in their duration to what is strictly necessary to remedy the situation. Even if a party mistakenly considers that serious economic difficulties are liable to persist for longer than in the event they do persist, the measures will have to be withdrawn as soon as the difficulties have abated. The procedural rules for the application of safeguard measures, referred to above, acknowledge that some economic or other difficulties may justify the immediate imposition of safeguard measures.


Possible proportionate safeguard measures by the UK


I have referred to two potential difficulties which have been identified by the UK Government as justifying infringing the NIP. One would be the refusal of the EU to recognise UK food safety standards (SPS standards), which would result in the UK being bound under the NIP to restrict the movement of food from the rest of the UK into Northern Ireland. The other would be the duty of the UK to impose tariffs at the EU rate on all products moving from the rest of the UK to Northern Ireland because of a failure in the Joint Committee to adopt the criteria necessary to identify goods “at risk” of movement on from Northern Ireland to Ireland. On the face of it, either or both of these situations could give rise to serious economic difficulties under Article 16 of the NIP, and allow the UK to take unilateral safeguard measures, limited in scope and duration to what was strictly necessary to remedy the situation, and the UK would be bound to consult with the EU to find an acceptable solution.

A possible proportionate safeguard measure as regards EU non-recognition of SPS standards would be to allow entry to Northern Ireland for certain foodstuffs despite non-recognition by the EU of the applicable UK standards, but to limit that entry to foodstuffs destined for the Northern Ireland market, and to exclude foodstuffs at risk of transit to Ireland.

A possible proportionate safeguard measure as regards the application by the UK authorities of EU customs duties on all goods moving from the rest of the UK to Northern Ireland would be to confine the application of customs duties to goods regarded by the UK authorities as genuinely at risk of transit to Ireland.
 
 
Recourse to consultations and dispute settlement mechanisms


The EU would be entitled to take proportionate rebalancing measures, but it is not clear that any useful rebalancing measures would be available to it. The EU would not wish to “rebalance” the situation by imposing controls on the border between Northern Ireland and Ireland.

Mutually acceptable solutions would be likely to be found by the EU and the UK through consultations. The dispute settlement provisions of the Withdrawal Agreement could be invoked, and this could lead to arbitration which would be binding on the parties.


The UK need not have characterised its response to difficulties over implementing the NIP as a willingness to break international law


The UK has chosen to frame its response to positions taken by the EU in discussions over the implementation of the NIP, in respect of, e.g., recognition of SPS standards, and customs arrangements for Northern Ireland, principally as a willingness to derogate from the NIP, and thereby to break international law. It could just as easily have framed its response as an intention to invoke lawful safeguard measures under the NIP, and to initiate the dispute settlement provisions of the Withdrawal Agreement. There is no obvious legal advantage to the UK proceeding in the way it has, and it must be concluded that the UK considers that there are political or negotiating advantages of one sort or another to be gained.


If the UK breaks international law by derogating from the NIP, could the EU lawfully retaliate, and place restrictions on imports from the rest of the UK?


Let us, for the sake of argument, assume that, despite the Downing Street  Declaration, the UK disapplies provisions of the NIP in contravention of its obligations under the NIP and the Withdrawal Agreement. What action could the EU lawfully take in response? It might be said that breach of international law by the UK would actually increase the options available to the EU.

If the UK took safeguard measures under the NIP, the only rebalancing measures available to the EU which might, in theory, counter the UK’s safeguard measures, would be checks and possible customs duties imposed at or around the Irish border. This would be the last thing that Ireland, and the EU, would wish to see, but it might be politically tolerable to the UK Government, which could lay the blame on the EU. If the EU considered that the UK’s safeguard measures went further than permitted by the NIP, then the EU could trigger the dispute settlement provisions under the Withdrawal Agreement. If the EU had doubts that the UK would comply with an outcome adverse to the UK, would there be any immediate action the EU could lawfully take?

Once the UK is guilty of a prior breach of the NIP, the EU has available not only its options under the NIP, but also its rights under customary international law to respond to that breach by countermeasures. “There is no requirement that States taking countermeasures should be limited to suspension of performance of the same or a closely related obligation….”, but “Countermeasures are more likely to satisfy the requirements of necessity and proportionality if they are taken in relation to the same or a closely related obligation, as in the Air Service Agreement arbitration.”[iv] Such countermeasures could include derogating from the EU’s international obligations vis-à-vis the UK, as a means of bringing the UK back into compliance with the NIP.

From the EU’s point of view, one potentially effective countermeasure against the UK for failing to enforce EU customs tariffs on goods entering Northern Ireland might be increased tariffs on similar goods entering the EU from other parts of the UK. The legal difficulty would be that this would involve the EU suspending its GATT obligations against the UK. The EU could not justify this as a lawful countermeasure, because WTO rules preclude suspension of WTO obligations unless there is authorisation under WTO dispute settlement procedures. Failures by the UK in respect of the NIP would not amount to infringement of GATT rules, so the EU could not invoke GATT dispute settlement procedures or lawfully retaliate by imposing tariffs or quantitative restrictions on imports of UK goods.

This would, however, leave the EU with the option of suspending trade related or other agreements between the EU and the UK which are not covered by the WTO dispute settlement provisions, and which do not contain provisions for dispute settlement which exclude recourse to countermeasures under general international law. It is likely that a list of such agreements has been drawn up by the Commission Legal Service, just in case the need arises. The EU, however, has given no indication of wishing to pursue any breach of the NIP by the UK otherwise than through the dispute settlement mechanisms in the Withdrawal Agreement.


Conclusion


If there is a no-deal, some of the concerns raised by the UK over the implementation of the NIP will have to be addressed as a matter of urgency, and other concerns will have to be addressed in any event. In either case, it is likely that outstanding differences between the UK and the EU will be resolved through the lawful channels provided in the NIP and the Withdrawal Agreement. While this is likely, it is not certain. If the EU and the UK fail to agree on the terms of a trade agreement, tempers will become short on both sides of the Channel. I shall not speculate about that. The UK and the EU have too much in common, in terms of core values such as democracy and the rule of law, and in terms of economic and security interests, to remain locked for long in the sort of divisive and ill-tempered negotiations that have been taking place in recent months. In London and Brussels, there are renewed hopes that a deal can be done. Sometimes even lawyers should allow themselves to be optimistic. In that spirit, I look forward to celebrating a successful outcome to the current trade negotiations, and the beginning of a new and positive relationship between the UK and the EU.

Professor Derrick Wyatt QC

Emeritus Professor of Law, University of Oxford. Member of the International Academic Council, FIDE Fundacion.
At Oxford Derrick taught EU Law, Constitutional law, and International Law. He has written extensively on EU law. Until recently, he also practised law. He appeared in numerous cases before the EU Courts in Luxembourg, and represented and/or advised businesses in the UK, Ireland, USA, Germany, and Iran, and the Governments of the UK, Northern Ireland, and Cyprus.

Related articles: The UK prepares to breach its International Law obligations under the UK/EU Withdrawal Agreement.

 

The UK Government is prepared to act in breach of International Law. It has introduced into the UK Parliament a bill which will give UK Ministers power to make secondary legislation in flagrant breach of its obligations under the Withdrawal Agreement between the UK and EU.


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