Happy New Year! At Briefings we’re returning from a much-needed Christmas break and looking forward to reporting on Global Britain’s successes in the coming year.
In the last fortnight since we’ve been gone, the big news has (unsurprisingly) been the appointment of Liz Truss to replace David Frost as chief negotiator on Northern Ireland. So far, Truss has stuck to Frost’s line that Article 16 is still on the table – to the chagrin of Maros Sefcovic and the EU establishment, who unashamedly celebrated the Great Frost’s thawing.
Trussted with the Protocol
Truss is, however, also Foreign Secretary, and will have more distractions than did Lord Frost. Foreign Office staff, moreover, are regarded as generally more Europhile – that department’s long-term strategy for decades pre-Brexit was predicated on EU membership.
There will thus be stronger pressures on Truss to compromise than on her predecessor. For the sake of Northern Irish prosperity, peace in the province, and the broader health of the Union, she should resist them firmly. Compromise, moreover, will be significantly harder now that France has taken over the presidency of the Council of the European Union – a development which may force a stiffening of spines in the UK government.
Beyond Northern Ireland, the Christmas period has seen revelations that Huawei’s investment in Cambridge University is double what was previously suspected. Concerns around technology transfer and a dampening effect on freedom of speech continue to grow. Tighter rules and regulations are needed, along with education about the nature of the threat and the need to protect valuable IP.
Wishing Beijing a prosperous route to hegemony?
More positively, the London Stock Exchange had a good year, raising more than the Paris and Amsterdam exchanges combined. Though European regulators are keen to force banks to relocate operations to the Eurozone, the UK’s financial regulators (the PRA and FCA) have hinted that they will take steps to prevent any relocations based solely on the EU’s industrial strategy. Overall, the UK’s services and financial sector remain in good health.
Our website editors have been busy over the previous two weeks. Graham Gudgin has written a piece reviewing the EU’s travails this year, which he aptly christens its annus horribilis, and another criticising Leo Varadkar’s claim that Northern Ireland is benefiting from the Protocol.
Meanwhile, Robert has written a number of articles on history, culture wars and foreign relations. He’s reviewed the relevance of the argument that Richard III didn’t murder his nephew Edward V, commented on the recent attempts to condemn the Jacobites as connected to the slave trade, and discussed ‘history wars’ in the context of modern cultural conflict.
Elsewhere, Robert has talked about the alarming possibilities of serious global conflict, and explored the financial and administrative reasons for why Cambridge colleges give a sympathetic hearing to woke ideas and policies.
In praise of my friend Frosty – the man who got Brexit done, by Oliver Lewis
We at BfB greatly regret the resignation of David Frost and thought readers might like to see this appreciation of his role in securing a Brexit deal, written by one of his close colleagues in the Brexit negotiations, Deputy Chief Negotiator, Oliver Lewis.
‘I was unsure: could we trust a former career mandarin? How could this diplomatic corps smoothie be the person we were looking for? But it became clear very quickly that this was someone with serious intellectual heft – someone who had spent years thinking about, and advancing the Eurosceptic cause.’
Trade War or Jaw-Jaw?
Can the EU begin a trade war over Article 16 while respecting the treaties and the rule of law?
Much has been made of EU threats to suspend parts of the Trade and Co-operation Agreement (TCA) if the UK triggers Article 16 of the Northern Ireland Protocol. One could argue that informal cross-retaliation has already begun, as Brussels has refused to grant Equivalent status for the City and excluded the UK from Horizon Europe. But what, under the treaties, can the EU actually do?
In cases of generic breaches of the Withdrawal Agreement (WA) or the Trade and Co-operation Agreement, both treaties provide that the injured party may (proportionately) suspend certain of its obligations in the other treaty, though not until after a lengthy arbitration process rules in the injured party’s favour (see TCA INST 24.4). However, the Northern Ireland Protocol (NIP) is governed by its own set of dispute resolution procedures, even though it is in form an annex to the Withdrawal Agreement.
When Article 16 of the NIP is invoked, the invoking party may put in place safeguarding measures which remedy trade diversion or internal unrest. Under the NIP, Article 16(2) provides that the respondent party may take ‘rebalancing measures’ in response to the invoking party’s safeguarding measures. This is only if the safeguarding measures ‘[create] an imbalance between the rights and obligations under this Protocol’. The rebalancing measures must be ‘strictly necessary to remedy the imbalance’.
Here the EU may find itself with a problem. The UK has not said what its Article 16 measures would be, though they may reflect the programme of the Command Paper of July 2021. Measures would likely include waivers on customs declarations for a variety of goods going from Great Britain to Northern Ireland.
The EU will have difficulty proving to an arbitration panel that retaliation in unrelated areas covered by the TCA – such as imposing onerous checks and tariffs on cross-Channel goods or suspending data co-operation and financial services access – actually remedies an imbalance.
By contrast, the UK will have a strong argument that the Article 16 rebalancing measures are not supposed to be punitive in nature, but are instead ways of practically remedying any hypothetical danger to the Single Market from penetration by UK goods not meeting its standards (for instance).
Given the EU’s public insistence that protecting the Single Market is precisely why it cannot allow a smooth flow of trade between Northern Ireland and the rest of the UK, it will be hard pressed to show how wide-ranging cross-retaliation achieves this goal while remaining ‘strictly necessary’.
This consideration may also apply to a hypothetical UK suspension of European Court of Justice oversight in the province on grounds of popular discontent, although what ‘proportionate rebalancing’ in the case of denied jurisdiction looks like is unclear from a practical perspective.
More extreme courses, like terminating whole chapters of the TCA, are also available, though not as retaliation measures. But these would likely be difficult for the EU to accomplish. The member states would need to agree, probably by a qualified majority vote in the Council of the European Union, where the Commission and more bellicose states like France would need to persuade the rest that the UK’s violations were serious enough to warrant repudiation.
They would also need to consider the reputational damage that such an extreme reaction would do to the EU’s reliability. The EU has already suspended the ratification of its agreement with China and is dragging its feet in negotiations with the South American regional trading bloc Mercosur. It has provoked a negative reaction in Switzerland to its hard bargaining strategy. Kicking up a fuss here will only strengthen the suspicion that Europe is a capricious and unpredictable negotiating partner.
We are also on Twitter, posting articles and retweeting the daily events that bring Brexit to the fore in the national news.
Discussion also continues over on Facebook.
How you can help
There is much about Brexit still to be decided. Our MPs listen to their constituents. Do continue to send them links to our articles, especially on matters relevant to your constituency – for example, in rural areas, articles on the threat to British agriculture. Alternatively, make an appointment to speak to them at their next surgery. Let them know what you want post-Brexit Britain to look like.
As Boris Johnson said in in his post-election address, it is also time for unity and reconciliation. Keep reading our posts and share links to our quality content to help others understand how leaving the EU benefits the UK economy and our own democratic governance. We aim to educate our critics to think differently and more positively about the long-term impact of Brexit.
A Cambridge PhD Student
Economist, Centre for Business Research, Judge Business School University of Cambridge
Emeritus Professor of French History, University of Cambridge