Showing posts with label Brexit Process. Show all posts
Showing posts with label Brexit Process. Show all posts

Tuesday, 13 September 2022

EU extends olive branch to Liz Truss with offer to slash trade checks ...

 

EU extends olive branch to Liz Truss with offer to slash trade checks in Irish Sea Maros Sefcovic says his plan to cut checks to just a 'couple of lorries a day' would create an 'invisible' trade border
Maros Sefcovic, the EU’s Brexit negotiator, said his plan would create an 'invisible' trade 
border CREDIT: JOHANNA GERON

Brussels has offered to slash physical trade checks in the Irish Sea to a “couple of lorries a day” in an olive branch to the new prime minister.

In the hope of breaking the deadlock over the Northern Ireland Protocol, Maros Sefcovic, the EU’s Brexit negotiator, said his plan would create an “invisible” trade border.

But he warned the proposal hinged on the European Commission being granted real-time access to UK trade databases in order to police which products cross into the Republic of Ireland.

“If the data are downloaded into the system, when the goods are put on the ferry from Britain... I believe that we can remotely process them while sailing to Northern Ireland,” Mr Sefcovic said.

He added physical checks would only be made when “there is reasonable suspicion of illegal trade smuggling, illegal drugs, dangerous toys or poisoned food”.

The Slovak diplomat told the FT only a “couple of lorries a day” would be examined, with no difference between the UK’s demand for “no checks” and the EU’s offer of “minimum checks, done in an invisible manner”.

Britain has granted EU officials access to its trade databases, but Brussels claims they will not receive enough information to suspend most checks in the Irish Sea.

The Protocol prevents a hard Irish border by introducing checks on British goods entering NI and means the province continues to follow some EU rules.

A European source close to the talks, however, stressed that the apparent offer remained the same as proposals to ease the burden of the Protocol floated by Brussels last October.

Under the proposals, up to 50 per cent of customs checks on goods being shipped between Great Britain and NI would be lifted, which UK officials say does not go far enough to address the issues caused by the Protocol.

Talks over a revised Protocol, which the Government argues has had a chilling effect on trade, have been deadlocked since February.

So far the Commission has refused to a wholesale renegotiation of the border arrangements, instead insisting talks must focus on its package from last October.

Mr Sefcovic was said to be keen to restart negotiations ahead of next month’s deadline to avoid new Stormont elections.

With the DUP refusing to form a new devolved administration in NI, a caretaker government is in place but must be dissolved by Oct 28 unless a new executive is formed.

The Secretary of State for NI is then obliged to call new elections within three months or by Jan 19 at the latest.

“I also would prefer to work around the tight deadlines because I am fully aware of the dates which will be coming by the end of October,” he told the FT.

But the EC was yet to receive news on Britain’s next Brexit negotiator, after Liz Truss, who held the role while foreign secretary, became prime minister, according to a source.

Mr Sefcovic said he was “encouraged” by Ms Truss’s recent remarks about her desire for a negotiated solution.

Progress, however, is unlikely while the Government’s NI Protocol Bill, which will give ministers powers to unilaterally override the border agreement, is still on the table.

Brussels has branded the legislation a breach of international law and urged the Government to scrap the move.

The Commission responded by blocking Britain’s accession to the bloc’s Horizon research programme, agreed as part of the post-Brexit Trade and Cooperation Agreement.

“We need to see that the most important agreements are now respected before we start to negotiate another one,” Mr Sefcovic said.

He also claimed the Commission had reached out to the United States in the hope of securing potential investment in NI.

https://www.telegraph.co.uk/politics/2022/09/12/eu-extends-olive-branch-liz-truss-offer-slash-trade-checks-irish/

Sunday, 14 August 2022

Northern Ireland Protocol: Is Boris Johnson's plan to change the Brexit treaty justified? MUST READ

 The British government plans to unilaterally change the supposedly legally binding treaty covering post-Brexit arrangements in Northern Ireland. 


Demonstrators protest outside Hillsborough Castle, ahead of a visit by British Prime Minister Boris Johnson, in Hillsborough, Northern Ireland, Monday, May, 16, 2022.   -   Copyright  AP Photo/Peter Morrison



By Alasdair Sandford


The British government plans to unilaterally change the supposedly legally binding treaty covering post-Brexit arrangements in Northern Ireland. New legislation is set to alter the Northern Ireland Protocol, an integral part of the EU-UK divorce agreement.

Brussels has threatened retaliation, which analysts on both sides fear could spark a trade war. The US government has also warned London against the move. 

There may also be implications for the peace accord which ended decades of sectarian violence and wider international relations.

The move also comes at a time of political deadlock in Northern Ireland. The country's largest unionist party, which is bitterly opposed to the Protocol, has refused to join the statutory power-sharing system after recent, explosive election results saw pro-unification party Sinn Fein make huge gains in the Assembly.

Boris Johnson's team has made several claims as to why they believe the Protocol should be changed. Here, Euronews takes a look at five of them. 

1. 'EU rules are to blame'

Outlining plans for overriding the Protocol to parliament, British Foreign Secretary Liz Truss cited "significant costs and paperwork" being dealt with by companies now sending goods from Britain to Northern Ireland, some of which have stopped trading across the Irish Sea.

Truss also said "onerous restrictions" on the sale of foodstuffs had hit producers. People in Northern Ireland cannot benefit from UK tax advantages such as VAT (Value Added Tax) reductions.

In an article for the Daily Telegraph, Truss blamed the difficulties on "EU customs procedures which are completely unsuited to goods moving within a country". 

Elsewhere,Boris Johnson has written that EU customs codes were "designed for vast container ships coming from Shanghai to Rotterdam, not supermarket lorries from Liverpool to Belfast".

The EU imposes checks and restrictions on goods entering from non-EU countries. To avoid a hard land border with Ireland, the Northern Ireland Protocol instead creates an internal UK trade barrier with Britain.

The treaty keeps the UK territories within the EU's regulatory sphere. An extensive annexe in the Protocol lists numerous EU laws that still apply in Northern Ireland, covering customs, the single market, and VAT. 

Goods entering from Britain also need customs declarations. Border checks are envisaged at Northern Irish ports, although the UK has acted unilaterally to extend agreed grace periods delaying their implementation.

The prime minister himself negotiated the 2019 agreement that brought about the new arrangements. It was ratified by both the UK and European parliaments.

Then that autumn, Boris Johnson repeatedly and wrongly claimed — see here, here and here — that there would be no border checks between Britain and Northern Ireland in either direction. This contradicted the detailed checks envisaged in the government's own impact assessment.

In November 2018, Johnson complained to the Irish Democratic Unionist Party (DUP) conference that then-Prime Minister Theresa May's deal would keep Northern Ireland tied to EU rules, with "regulatory checks and even customs controls" between Britain and its territory.

"No British Conservative government could or should sign up to anything of the kind," Johnson said. But within a year, he had done just that.

2. 'The UK was rushed into a deal'

After the accord was finally negotiated in 2019, Boris Johnson lauded a "great new deal" and infamously called it an "oven-ready" post-Brexit arrangement.

But in April this year, former Brexit minister and negotiator Lord David Frost argued the UK was pressured into agreeing to it at the time.

In a speech to the think tank Policy Exchange, he said Brexit opponents were bent on "reversing the referendum result". Parliament had legislated to block a no-deal Brexit which "massively weakened our negotiating hand", he said, and the EU had taken advantage. 

"As a result, they turned the screws," Frost said, with the outcome that arrangements on the need for Northern Irish consent were weaker than they could have been; instead, the EU's customs rules prevailed.

"We decided the lesser risk was to push the deal through," Frost added, "and trust that we could sort out the detail with the EU later."

Johnson's estranged former chief aide, Dominic Cummings, put it a different way. He claimed on Twitter in October 2021: "We wriggled through with best option we could & intended to get the [prime minister] to ditch bits we didn't like [later on]". 

There were no substantive complaints about the Protocol raised in a UK government document in May 2020. Cabinet minister Michael Gove instead praised the deal and did so again in December that year as a follow-up UK-EU agreement set out grace periods to give the UK more time to adapt to the new rules.

Responsibility for the Brexit divorce deal and the Protocol "lies fairly and squarely with the UK government", Dr Andrew McCormick, a former senior civil servant who was the Northern Ireland Executive's lead on Brexit, wrote in an article for the Constitution Society in April. 

"There is little credibility," he wrote, "in any argument that the UK government either did not anticipate the implications of what it had agreed or was constrained and unable to choose any other option."


3. 'The EU is too inflexible'

Both Johnson and Truss have cited the EU's refusal to change the Protocol — and lack of mandate to do so — as justification for the current plan.

The foreign secretary says the government "worked tirelessly" for 18 months to try to negotiate solutions with the EU, without success.

Brussels rejects this. "The EU has shown understanding for the practical difficulties of implementing the Protocol, demonstrating that solutions can be found within its framework," Brexit negotiator Maroš Šefčovič wrote earlier in May.

He pointed to the European Commission's proposals to facilitate the flow of goods, including simplified procedures that are expected to lead to an 80 per cent reduction in checks.

In February, the EU announced changes to post-Brexit regulations to allow medicines to continue to be transported between Britain and Northern Ireland.

The EU has also said agri-food checks could be slashed altogether, but for the UK's refusal to accept a Swiss-style deal on veterinary arrangements and food safety standards.

Andrew McCormick argues that there is scope for further negotiation and cuts in food checks: "The key question is, how can we be sure that something potentially carrying disease entering Northern Ireland stays in Northern Ireland?"

Labour MP Hilary Benn, former chair of the UK parliament's Exiting the European Union Committee, has said there should be no need for checks on a "cake, sandwich or cut of meat" sent from Britain to Northern Ireland.

The EU argues it is hard to envisage checks being so significantly reduced, especially given the Johnson administration's apparent intention to diverge from EU laws, rules and standards. 

The bloc also claims the UK has failed to provide adequate data to enable it to carry out a proper risk analysis of the threat to the single market.

Irish Taoiseach Micheál Martin has accused the UK government of "moving the goalposts" over its approach. "My main concern is, will the United Kingdom government ever be satisfied?" he recently lamented.

One example cited is the UK's objection to European Court of Justice oversight in Northern Ireland, which was highlighted in a "Command Paper" in July 2021. This came even though the ECJ's role had been clearly set out in the Protocol.

The EU has said is willing to explore more options within the Protocol's framework. But there is no appetite in the member states' capitals for going back to the drawing board, especially in light of current international crises.

4. 'The UK is proposing a reasonable solution'

The UK government says its "comprehensive and reasonable solution" would meet both the UK's and the EU's objectives for the Protocol.

This includes a "trusted trader scheme" that would hopefully give greater confidence on goods not entering the EU's single market, getting rid of "unnecessary bureaucracy", creating a "green channel" and "removing customs paperwork" for goods that remain in the UK.

The same proposal aims to remove regulatory barriers to goods made to UK standards and sold in Northern Ireland, also enabling the government to decide tax and spending policies "across the whole of the UK".

For many in the EU, this leaves a huge hole regarding the application of EU rules in Northern Ireland - and has echoes of previous British proposals that were explored and dismissed.

After Theresa May's original deal was voted down by the House of Commons in early 2019, a flurry of ideas and proposals were put forward as an alternative to her ill-fated "backstop" solution, which would have kept the whole of the UK in a customs union with the EU in the absence of a trade deal or an alternative solution.

Numerous "alternative arrangements" were touted, and all were rejected by Brussels. In a series of "indicative votes", no alternative option gained the approval of British MPs.

Although the British government says it wants to reform and not scrap the Protocol, there are concerns that it is effectively trying to turn back the clock several years, ditching the agreed principle of alignment with EU rules.

EU leaders and officials insist the Protocol was the mutual solution for mitigating the impact of Brexit on the island of Ireland. They have called on the UK to respect the international agreement it signed, remembering that the Protocol was part of the foundation for the subsequent trade deal.

The UK government says its plan will not breach international law, a claim that is widely disputed.  "I've yet to meet any legal scholar who thinks that there is a case that would stand up under international norms," Simon Usherwood, a Professor of Politics and International Studies at the Open University, has told Euronews.

"The UK signed up to the Protocol. It made no objections at the time. There's no obvious reason to think this was done under any kind of duress. So the UK by any standards is bound to what it signed up to."

5. 'The Protocol threatens peace and stability'

The British government argues its priority is to uphold the 1998 Good Friday Agreement, the peace accord that ended decades of violence and set in place new governing structures for Northern Ireland, and the Protocol is putting that under strain.

"There is no disguising the fact that the delicate balance created in 1998 has been upset," Boris Johnson said in a recently-penned article, "The Way Ahead". "One part of the political community in Northern Ireland feels like its aspirations and identity are threatened by the working of the Protocol."

The prime minister went on to argue the implementation of the Protocol was not doing enough to protect the UK internal market or the interests of unionists.

Sir Jeffrey Donaldson, leader of the DUP, the party currently refusing to join the power-sharing executive in Northern Ireland, has said the Protocol is "driving up the cost of living" there by preventing VAT reductions on energy.

"Northern Ireland’s political stability is under threat," writes Dr Mary C. Murphy, Jean Monnet Chair in European Integration at University College Cork, in an article for the website UK in a Changing Europe. 

But Murphy largely blames the stances of the DUP and Johnson's cabinet: "The quite extraordinary decision by the British government to flout international legal norms and jettison the Protocol, in a move which appears to privilege one political party over others, ignores the majority support for the Protocol in Northern Ireland."

Nationalists Sinn Fein, who are in favour of the Protocol, won the most seats in the recent legislative elections, which also delivered an overall majority for pro-Protocol parties.

The British government's case highlights the negative impacts on trade as resulting from the Protocol. But a recent survey of businesses found that two-thirds had now adapted to new arrangements, albeit only partially implemented: up on the just over half who said the same at the end of 2021.

The percentage of firms finding the arrangements "extremely challenging" also fell by half, to single figures, leading some to question the government's motives. 

"To throw the whole regime up in the air for the benefit of the eight per cent who are still experiencing ‘significant’ difficulties would be hard to justify unless chaos was intended," says Professor Katy Hayward, also of UK in a Changing Europe.

Background on the Protocol

The Northern Ireland Protocol is the outcome of one of Brexit's most intractable problems: given the island of Ireland's history, how to keep an open land border between Northern Ireland, like the rest of the UK now outside the EU, and the Republic of Ireland, an EU member.

The issue dominated the debate in the wake of the UK vote for Brexit in the 2016 referendum. The EU insisted a binding solution be part of the divorce deal, a precursor to a subsequent trade agreement.

The first UK-EU accord brought deadlock in the British parliament, delaying Brexit itself and bringing down Prime Minister Theresa May.

Boris Johnson came to power refusing to accept his predecessor's agreement. Blocked by parliament from taking the UK out of the EU without a deal, he negotiated a new one, which included today's Northern Ireland Protocol.

The breakthrough helped secure Johnson's ruling Conservatives an election victory. The UK duly left the EU and a hard-fought trade deal followed.

Northern Ireland's largest unionist party, the DUP, is opposed to the protocol, arguing that it weakens the territory's position in the UK. Following recent elections, it has refused to join the power-sharing system set up as part of the peace process.


https://www.euronews.com/my-europe/2022/05/31/northern-ireland-protocol-is-boris-johnson-s-plan-to-change-the-brexit-treaty-justified

Monday, 29 November 2021

EU banks demand access to City markets in blow for Brussels

 The eurozone’s most powerful banking groups have demanded long-term access to London’s multi-trillion dollar derivatives trading market in a fresh blow for Brussels’ plans to seize business from the City.

 

 

© Provided by The Telegraph City of London

In a joint letter, finance trade bodies said that the bloc faces a “cliff edge” unless it extends exemptions that allow trades by European Union institutions to take place in the UK and other major markets.

The letter has been signed by organisations including the International Swaps and Derivatives Association, the European Association of Co-operative Banks, the European Banking Federation, the Futures Industry Association, the Global Financial Markets Association and the Nordic Securities Association.

It said: “If the temporary [arrangements] are allowed to expire without being replaced by equivalence decisions in all key jurisdictions, this will result in increased costs and operational burdens for EU firms while also resulting in trapped assets.”

The European Commission has refused to grant Britain so-called equivalence status for derivatives trading, which would allow companies indefinite access to the City’s deep markets, despite the UK’s post-Brexit rules being broadly in line with its own.

Instead, in what is widely seen as a political move, Brussels has only granted temporary permission for European Union businesses to trade derivatives in London. This is due to expire at the end of June 2022.

The trade bodies called for Brussels to grant derivatives trading permission to the City for at least a further three years. The current reliefs relate to so-called intragroup transactions, which are trades between parties where at least one party is not based in the bloc, including affiliates of EU-based companies.

EU banks are heavily reliant on London’s €660 trillion (£563 trillion) market to settle transactions between institutions, and the process is critical to the smooth operation of financial markets.

Derivatives are financial instruments which underpin banking products used by millions of European consumers, such as fixed rate mortgages. Critics have said that withdrawing access to the UK would likely result in higher costs for the public and could even threaten financial stability.

Before Brexit, it was feared that the EU would swiftly cut off companies’ ability to trade in London in a bid to stifle the City and force business to move abroad. Hundreds of thousands of jobs were said to be at risk of the UK voted Leave.

However, the exodus has been far lower than expected with fewer than 10,000 workers thought to have relocated according to data from EY.

Brussels was forced to separately admit it would extend London’s lucrative euro clearing rights earlier this month in a post-Brexit boost for the City.

The Commission granted permission for banks on the Continent to continue accessing Britain’s clearing market beyond an initial deadline of June 2022, amid fears that cutting them off would damage financial stability.

Mairead McGuinness, the bloc’s financial services commissioner, said the Commission believes EU firms are “over-reliant” on the UK for certain clearing activities, and it will develop the EU’s own capacity to avoid financial stability risks in the medium term.

But she added: “However, in order to address possible short-term financial stability risk, linked to an abrupt interruption in access to clearing services, the Commission will soon propose an extension of equivalence for UK-based [clearing houses].”

The decision represented a significant victory for Britain’s financial services industry after France and other rival countries attempted to seize control of the market from London’s clearing houses, which act as middlemen in derivatives trades between banks.

Earlier this year the EU ordered major banks to explain why they were not shifting euro derivative trading activity out of Britain.

Bank of England governor Andrew Bailey has warned Brussels against plotting a protectionist power grab aimed at stealing business from the City, arguing that the EU would undermine efforts to shore up stability in the wake of the financial crisis if it succeeded in seizing part of the clearing market from the Square Mile.

Source