European Commission (EC) President Ursula von der Leyen speaks at a press conference on October 1, 2020. (Photo: EPA)

The British House of Commons on Tuesday ratified the Internal Market Bill, which governs post-Brexit trade agreements within the UK. The European Commission had given the British government until the end of September to withdraw controversial provisions from the bill. The deadline lapsed on Wednesday. EC chief Ursula von der Leyen said on Thursday that the problematic provisions have not been removed.

British and EU arguments

The UK government said on Thursday that its bill is designed to "create a legal safety net to protect the integrity of the UK's internal market"  and to protect the Good Friday Agreement that guarantees peace in Northern Ireland. London reiterated that the bill is needed to ensure smooth, uninterrupted trade between England, Scotland, Wales, and Northern Ireland, bolstering economic resilience after the COVID-19 pandemic when the transition period ends later this year.

British Prime Minister Boris Johnson called the bill a "legal safety net against extreme or irrational interpretations of the protocol.” He said his job is to “uphold the integrity of the UK, but also to protect the Northern Irish peace process and the Good Friday Agreement” that ended 30 years of conflict.

Under provisions agreed to by the UK and the EU, Northern Ireland will remain within the UK customs territory and will be included in any future UK trade agreements. To avoid a hard border between Northern Ireland and the Republic of Ireland, Northern Ireland will continue to impose European tariffs. But the Internal Market Bill removes this provision. The bill seeks to exclude Northern Ireland from the EU single market regulations, to maintain a connected UK market and ensure all four UK countries maintain the same standards and rules so that goods can be traded freely.

The EU has reacted vehemently, saying the bill violates their previously-agreed provision that EU customs rules will continue to apply for goods travelling between Northern Ireland and the Republic of Ireland so as to avoid a hard border on the island, which many fear could reignite sectarian tensions and violence.

Since the beginning of September, the EU has been requesting an emergency meeting with the UK. EU Vice President Maros Sefcovic asked the UK to respond to the EU's deep concerns about the bill. EC President Ursula von der Leyen said on Wednesday that she is "very concerned", tweeting that the bill will "break international law and undermine trust". European Parliament President David Sassoli warned that any British attempt to compromise the agreement will have serious consequences. Berlin urged London to respect the terms that the UK agreed to before officially leaving the EU.

Consequences

Prime Minister Johnson's government knows very well the implications of this bill. Announcing the bill in early September, Mr. Johnson said he would seek to change the agreement on Northern Ireland that he struck with the European Union in October 2019. A government official  admitted that the new bill “does break international law in a very specific and limited way.”

Under the withdrawal agreement signed with the EU, the UK must contact the EU when making any arrangements with Northern Ireland, the only land border between the UK and the EU in the post-Brexit era. London's unilateral move could plunge UK-EU trade negotiations, which are already at a standstill, into a crisis. The EU has repeatedly warned that any withdrawal agreement violation will prevent the two sides from reaching a trade agreement.

The EU’s legal action against the UK is taken reluctantly. The UK  will have one month to respond to the EC’s letter. The EC will then decide whether the answer is satisfactory and may ask the UK to withdraw the controversial provisions from their bill. If that fails, the EC can sue the UK at the European Court of Justice in Luxembourg. This means EU-UK relations are entering a new period of tension.