EU warns Brexit trade talks under threat if UK backslides on deal

Michel Barnier, the EU’s chief Brexit negotiator, will arrive in London on Tuesday with a stark warning to Boris Johnson that if he redraws last year’s Brexit divorce agreement then talks on a future trade deal will collapse.

Mr Barnier, in London for the eighth round of talks on a Brexit deal, will warn Britain that unless it stands by its previous commitments there is no prospect of a free trade agreement by the end of the year.

Mr Johnson on Monday tried to contain the fallout from the revelation by the Financial Times that he intends to pass a law overwriting parts of last year’s withdrawal agreement relating to Northern Ireland.

Responding to the FT report, Mr Barnier said he would press his UK counterpart David Frost on the government’s intentions, warning that “everything that has been signed in the past must be respected; it is what underpins confidence going forward”. 

Meanwhile, Mr Johnson explained to Emmanuel Macron, president of France, in a phone call that the changes were “limited” and technical, and that he stood fully behind the commitments made last year.

Mr Macron said he had a “very good exchange” with Mr Johnson on Brexit and other matters, including people trafficking in the English Channel.  

But the French foreign ministry sharply reminded the UK of the need to respect the withdrawal agreement it had signed with the EU, key parts of which were designed to avoid a hard border on the island of Ireland.

Trade talks this week in London are not expected to make any significant breakthroughs, with Mr Johnson refusing to give details of the UK’s plans for a future regime to control subsidies.

However, he is expected to make a modest move by reassuring Brussels that Britain will not adopt a “high-subsidy regime”, according to his allies.

Although Brussels will demand far greater assurances, including a legal framework and independent regulation, Mr Johnson’s move to assuage concerns is a sign the prime minister wants to keep trade talks alive, officials said.

The FT revealed that sections of the UK government's internal market bill — set to be published on Wednesday — will eliminate the legal force of parts of the politically sensitive protocol on Northern Ireland that was thrashed out by Mr Johnson and the EU last year.

The next round of negotiations on the future relationship, which start in London on Tuesday, already promised to be difficult because of entrenched disagreements about state-aid rules and fishing rights.

Ahead of the latest talks, Mr Johnson sought to increase the pressure on Brussels by setting an October 15 deadline to conclude a deal. “If we can’t agree by then, then I do not see that there will be a free trade agreement between us,” he said.

The UK internal market bill, outlined in a 100-page white paper in July, is designed to secure the “seamless functioning” of trade between England, Wales, Scotland and Northern Ireland after the UK leaves the EU’s single market and customs union at the end of the Brexit transition period on December 31. 

UK environment secretary George Eustice acknowledged on Monday in a BBC interview that there were “a few loose ends” from the 2019 withdrawal agreement concerning Northern Ireland that needed to be tidied up, but denied the government was threatening to rip up the deal.

Under last year’s Brexit deal, the UK must notify Brussels of any state-aid decisions that would affect Northern Ireland’s goods market, and compel businesses in the province to file customs paperwork when sending goods into the rest of the UK.

Mr Johnson’s spokesman said ministers were working with the EU in the so-called “joint committee” to resolve outstanding issues on the Northern Ireland border question. 

But Mr Johnson had authorised “limited and reasonable steps to clarify specific elements” of the Northern Ireland protocol in UK law. This included giving the UK business secretary powers to determine whether Brussels needed to be notified in the event that state aid given to a company in Great Britain had implications for a company in Northern Ireland where EU state-aid rules would continue to apply.

Officials said the internal market bill would aim to stop Brussels using its authority over state aid in Northern Ireland to extend its authority to subsidies given elsewhere in the UK, even if the impact on Northern Ireland was marginal.

Downing Street confirmed the new measures would also ensure that “unfettered access” for Northern Ireland businesses to the rest of the UK market was not hindered by excessive bureaucracy, including export declaration summaries.

Separate measures in the finance bill this autumn, which implements Budget decisions, would seek to limit the number of goods deemed to be “at risk” and therefore subject to checks and tariffs when they enter Northern Ireland from Great Britain.

Ministers accept that the unilateral nature of these powers — using British ministerial discretion rather than the direct application of EU law — will cause concern in Brussels.

Ireland said any breach of the withdrawal treaty would have a “very negative impact” on the trade talks, raising the possibility that the UK plan is simply a ruse to boost its position in the negotiations with Brussels.

Simon Coveney, Irish foreign minister, told national broadcaster RTE: “If there’s any suggestion that the UK are not going to implement the legal obligations . . . on what has already been agreed in the withdrawal agreement, that would in my view fundamentally undermine trust between the two parties in their efforts to get what is a very complex negotiation concluded in the weeks ahead.”

Additional reporting by Arthur Beesley in Dublin