???? ?? ???? Storm brewing in the English Channel?
Alexis Daniel C.
Authorised Managing Director @ Unzer | Compliance Expertise - ExAmazonian
The relationship between the?United?Kingdom?and the?European Union?is going through a rough patch, even beyond how strained and hostile the relationship between the two administrations has been while Brexit was being negotiated. In this case?Northern Ireland?is to blame.
The tension has reached such a fever pitch that many analysts point to the?real risk?of an?all-out trade war. In the words of the Irish Foreign Minister,?Simon Coveney, the EU could?completely break?the agreement reached so far with the British government.
Why? Because?Boris Johnson's?government is pursuing a?tough?negotiating strategy and has recently announced that it is likely to trigger?Article 16?of its agreement with the European Union.
Article 16 is a?safeguard clause?in the Northern Ireland protocol that either party can trigger if it believes the agreement has caused "serious economic, social or environmental hardship" or significant "trade diversion". Something the UK claims?has already occurred.
And you see, the Northern Ireland protocol requires all goods travelling from Britain to Northern Ireland to conform to?EU rules?and therefore pass a lot of checks. This is because under the Brexit deal it was established, in order to?avoid a land border?splitting the island nation of Ireland in two, that Northern Ireland would remain within the EU?customs union and single market.
The problem is that all these controls and restrictions are causing significant unrest in the region.
"We are clear there should be no internal barriers to trade within the United Kingdom and we want to see the removal of barriers to trade between Great Britain and Northern Ireland and that is our bottom line. For us, the Irish Sea border must go."?- Sir Jeffrey Donaldson, leader of the Democratic Unionist party, which is part of the Northern Ireland administration
Despite this,?the European Union does not want to remove the controls?in the?fear that this area becomes a kind of?back door?for products from the United Kingdom to access the common market?without any restrictions.
For example, at the end of October, in order to allow more fluid trade, the European Commission proposed to?reduce 80% of the controls on products of animal and vegetable origin?as well as to reduce by half the necessary customs paperwork. Certain bans such as those on?refrigerated meat or medicines?from Britain would also be lifted and?express lanes?would be set up in ports to speed up the passage of lorries.
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However, for Boris Johnson's government it is still not enough and it advocates establishing an?honesty agreement?that completely eliminates the previous controls and customs paperwork between Great Britain and Northern Ireland.
Why is it important?
In its zeal to defend itself against Brexit, the European Union has set up a?huge non-tariff barrier?at the British border made up of multiple controls and an enormous amount of paperwork, something that is slowing down trade between Britain and the EU community. This is?not in the interests of either side.
The United Kingdom is a?key player?in terms of investment, trade and security. It is in the interest of all parties to develop a fluid relationship that facilitates exchanges between the two economic poles.
Brexit is a done deal, now we need to think about how to encourage prosperity and wealth generation.