EU to beef up Brexit deal enforcement powers with trade tariffs

New rules would allow Brussels suspend free trade and other benefits agreed with UK

The European Union is to enhance its powers to enforce its Brexit agreement with Britain through retaliatory trade tariffs. The new legislation will empower the EU to revoke free trade arrangements with Britain and impose restrictions on investment or other activities if London breaches its side of deals signed during the Brexit process, including the Northern Ireland protocol.

The European Commission’s Brexit lead, Maros Sefcovic, said the new powers would “allow us, if needed to enforce our agreements with the UK”, describing it as “continued unity… in action”.

Negotiators representing the European Parliament, European Commission and member states agreed on the text of the legislation to increase the EU’s enforcement powers on Wednesday evening, paving the way for the measures to come into force early next year.

The EU was prompted to beef up its enforcement options by London’s move to introduce the Internal Market Bill in 2020, which would have given the British government the power to unilaterally disapply parts of the protocol, and then the Northern Ireland Protocol Bill this year which would similarly allow ministers to override post-Brexit arrangements for the North.

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The increased powers are designed as a way to force London to uphold its side of the agreement, particularly if the British government refuses to engage in the ordinary dispute-resolution mechanisms set out in the signed deals.

Enforcement mechanism

“I take no pleasure in saying this, but the EU would have no option but to respond proportionately to protect the single market,” said Seán Kelly, the Fine Gael MEP who was a lead negotiator in the talks on behalf of the parliament’s international trade committee.

“Of course, we would prefer if the enforcement mechanisms were not needed,” he continued.

“Politically, this regulation is a strong statement of EU unity and readiness to take action if the UK were to breach either agreements, including the protocol… especially if the British government was to refuse to participate in the dispute-resolution mechanisms provided for.”

“From an Irish perspective, this regulation is also essential to protect the all-Ireland economy,” Mr Kelly said.

A draft copy of the regulation said it would ensure the EU “can act in a timely and effective manner to protect its interests in implementing and enforcing both the Withdrawal Agreement and the Trade and Co-operation Agreement”.

It set out that the European Commission could take measures “restricting trade, investment or other activities within the scope of the Trade and Co-operation Agreement” and allowed for the “suspension of the relevant preferential treatment” of products from Britain.

Breach of accord

It would also allow for the “refusal, revocation, suspension, limitation of and the imposition of conditions on the operating authorisations of air carriers of the United Kingdom”, according to the initial draft regulation.

Under the agreement reached, the European Parliament has also secured the “right to information”, meaning that it must be consulted by the commission before any action is taken against Britain following a breach of the agreement, negotiators say.

The member states must also be “continuously informed on a permanent and regular basis” in the European Council.

EU leaders have welcomed a more constructive tone taken by the British government since Rishi Sunak became prime minister last month.

However, officials say that despite the improved atmosphere nothing has yet changed concretely in the approach of British negotiators, as attempts to agree a final settlement regarding Northern Ireland drag on.

“While we welcome the more constructive and positive approach from the UK towards the EU under prime minister Sunak, we have yet to see that translated into action,” Mr Kelly said. “The mood music is much better, and while I think we are going in the direction, the reality is the legal situation remains the same.”

Naomi O’Leary

Naomi O'Leary

Naomi O’Leary is Europe Correspondent of The Irish Times