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Article 16 loses power as UK negotiating tool as EU hardens approach

London Letter: British threats have pushed more EU members into hawkish camp

Before Brexit minister David Frost made his statement to the House of Lords on Wednesday there was a flutter of speculation around Westminster that he was about to trigger article 16 of the Northern Ireland protocol. Instead, he promised to keep talking to European Commission vice-president Maros Sefcovic until they have exhausted all negotiating possibilities.

“There is more to do and I certainly will not give up on this process unless and until it is abundantly clear that nothing more can be done. We are certainly not at that point yet,” he said.

He added that if the negotiations fail, article 16 would be Britain’s only option but if his statement represents a tactical retreat, it a wise one.

At last month’s Conservative party conference in Manchester, Frost said he expected the current round of negotiations about the protocol to last three weeks. He and Sefcovic have already been talking for four weeks and he told the Lords that there was still a “short number of weeks” of negotiations ahead.

In his command paper in July, Frost acknowledged that the actions Britain could take under article 16 are limited, temporary and subject to the uncertainty of a dispute settlement process. In the Lords on Wednesday, he agreed with former Ulster Unionist party leader Reg Empey that triggering article 16 would not rid Britain of the protocol or its perceived problems.

“Article 16 is not an on/off switch for the protocol. It is not a sort of self-destruction mechanism for the protocol; it is a safeguard. There are constraints on what can be done with a safeguard,” he said.

This shift in the EU's approach means that article 16 has not only become costlier but also much less likely to serve its purpose of improving Britain's negotiating position

A month ago, article 16 was still potentially useful as a means of resetting the negotiations and heightening pressure in a way that could work to Britain’s advantage. That changed after Sefcovic unveiled his offer of sweeping changes to address most of the practical difficulties the protocol has created for businesses and consumers in Northern Ireland.

Sefcovic’s offer reflected his determination, urged on by Dublin, to give a political win to northern unionists, whose leaders were consulted in advance. But just before he outlined his proposals, Frost trampled over them in a speech in Lisbon that put the role of the European Court of Justice (ECJ) at the centre of Britain’s demands.

In doing so, Frost also stepped on the unionist leaders’ political victory, leaving them with no option but to echo his outrage over the ECJ, an issue that had not hitherto been a priority for them. Frost’s response to Sefcovic’s offer, accompanied by signals from London that he was preparing to trigger article 16 within weeks, served to reinforce the arguments of those EU member states advocating a tough response to such action.

The range of plausible retaliatory measures has expanded to include everything from targeted tariffs to the termination of the Trade and Co-operation Agreement (TCA) and more member states are moving into the hawkish camp each week. And the Europeans have made it clear that they are not impressed by British spin about triggering article 16 in a “calibrated and forensic” way – any such unilateral action will be viewed as equally aggressive.

Frost must also know that he has other options over the protocol, including the continuation of the current standstill

This shift in the EU's approach means that article 16 has not only become costlier but also much less likely to serve its purpose of improving Britain's negotiating position. The persistent rumble of threats from London may already be undermining investor confidence and, as Jill Rutter of UK in a Changing Europe noted this week, uncertainty over the future of the TCA would cost Britain dear.

“It means that the prospect of tariffs on trade lurks on. That makes Great Britain a less attractive destination for foreign investment. It means that domestic firms may think twice about supplying the EU from a British base. And it may make the UK a less attractive destination for the talented, highly skilled ‘best and brightest’ the UK is keen to lure here under its global migration scheme – and will make it harder, not easier to fill labour market gaps caused by the ending of free movement,” she wrote.

“All that suggests that a future where the Trade and Co-operation Agreement repeatedly hangs by a thread is likely to be a more economically precarious future than one where both sides are clearly committed to making it work.”

Frost knows this and he must also know that he has other options over the protocol, including the continuation of the current standstill under which the agreement is only partially implemented. Britain would still be in breach of the agreement but the EU would find it harder to respond with the kind of punitive sanctions likely if article 16 is triggered.