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UK threatens to cancel parts of Brexit deal


Johnson will visit Northern Ireland on Monday to hold emergency talks.

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LONDON – The UK government has once again threatened to unilaterally cancel large parts of the Brexit deal agreed with the European Union, raising the prospect of a trade war amid the division crisis. share power in Northern Ireland.

British Prime Minister Boris Johnson will travel to Belfast on Monday in an attempt to ease tensions over the Northern Ireland protocol, part of a post-Brexit trade deal that requires inspection of certain goods entering Northern Ireland from the rest of the country. UK

The hastily arranged trip comes shortly after Northern Ireland’s largest unionist party blocked the Stormont speaker election – effectively preventing the formation of a new chief executive in the province.

Democratic Unionist Party, second to Sinn Fein in May 5 election, refused to re-enter the executive until the protocol was rewritten. The agreement that went into effect in January last year is designed to avoid the need for a hard border between Northern Ireland and the Republic of Ireland, which remains part of the EU.

The DUP said UK lawmakers must repeal the protocol, arguing that a customs border had been created over the Irish Sea and this undermined Northern Ireland’s position within the UK.

The Northern Ireland Protocol requires inspection of certain goods entering the province from the rest of the UK

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Sinn Fein, accepting the protocol, has the right to nominate the first minister of the executive branch after becoming the first nationalist party to win the most seats in Northern Ireland’s 101-year history.

However, under a power-sharing agreement put in place in the 1990s, a new government cannot be formed without the DUP. The first minister and deputy minister must be a unionist and a nationalist.

The absence of a functioning decentralized government has worried UK lawmakers. That’s because without it, there are concerns about a return of street violence that could threaten the fragile peace since the Good Friday Agreement.

Signed on 10 April 1998, the Good Friday Agreement is a historic armistice that ended three decades of sectarian violence in Northern Ireland between Irish separatists and British loyalists.

Why is the protocol at risk?

Johnson – despite renegotiating and signing the Northern Ireland protocol – is once again weighing whether to make changes to the deal, a move that risks retaliation by the EU and could the possibility of starting a trade war.

Writing in the Belfast Telegraph on SundayJohnson said “action will be required” under the protocol if the EU’s position does not change. He said the deal is now out of date because it was designed in the face of the coronavirus pandemic, Russia’s war with Ukraine and the cost of living crisis.

Foreign Secretary Liz Truss last week warned that the UK would have “no choice but to act” if EU lawmakers failed to show the “necessary flexibility” over the protocol.

European Commission Vice President Maros Sefcovic said it was “unacceptable” for the UK to make such threats, adding that it continued to be “seriously concerned” that the government Johnson’s intention to embark on the path of unilateral action.

Michelle O’Neill of Sinn Fein, Northern Ireland’s first newly elected minister.

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European Union suggested changes for the protocol last October, focusing on further flexibility related to the food, plant and animal sectors and medicines, among other issues. The UK has rejected the plan.

Christopher Granville, chief executive officer at consulting firm TS Lombard, told CNBC by phone: “For its part, the UK government is simply looking for what I think in terms of mainstream buzz. Current value in Westminster is known as ‘red meat’.

“So, to capture an emotional Brexit-related issue as the EU is trying to divide the UK and dictate to the UK— and the UK government shows that it is siding with Brussels and give up on protocol,” Granville said.

When asked if Downing Street’s stance on the protocol seemed designed to distract British voters from issues like cost of living crisis and spoil local election resultsGranville said: “Exactly. That’s my reading – and that’s why it comes out from time to time.”

“The fact is that the EU, under the direction of Commissioner Sefcovic, has been very open to discussing pragmatic ways to adapt the operation of the protocol and has come with many exemptions and protections.. . But of course that doesn’t work out politically. for the DUP or for the UK government.”

De Croo of Belgium and Scholz of Germany both called on the UK to avoid taking unilateral actions over the Northern Ireland protocol.

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Germany’s Olaf Scholz has urged Britain to avoid taking unilateral actions on the protocol, while Belgian Prime Minister Alexander De Croo said Britain’s failure to comply with the agreement would create a significant problem for the market. internal market of the EU.

“Our message is pretty clear. Don’t touch this,” De Croo said at a press conference alongside Scholz on May 10. “This is something we agreed to and agreements need to be made. to respect.”

Meanwhile, the US has encouraged dialogue between the UK and the EU to resolve the deadlock.

Former British Prime Minister Theresa May has warned that the UK’s removal of parts of the protocol could damage Britain’s reputation for complying with international law.

Trade war

The UK government is not said to have decided whether to activate Article 16 of the protocol, a defense mechanism that allows either party to put parts of the deal on hold if it is deemed to cause problems. serious issue.

Mujtaba Rahman, managing director at consulting firm Eurasia Group, has estimated that legislation allowing the government to unilaterally replace the protocol will take at least six months to a year to agree, citing opposition to the measure. in the House of Commons.

“In the short term, the UK-EU relationship is more likely to be battled along with the legal proceedings restarted by Brussels, with the risk of a trade war just next year,” Rahman said in a statement. a research note.

Sterling was last seen trading at $1.2216 on Monday morning, down about 0.4% on the session.

“There are many reasons for the pound to weaken at the moment. First and foremost is the dominant hawkishness of the US Fed and the strength of the US economy to be able to withstand higher interest rates than the danger. Inflation has stagnated in the UK,” Granville said.

He added: “However, if there is a risk from an inflated UK-EU trade deal being seen as fattening – which is certainly a scenario – then you can expect some additional weakness. in British Pound Sterling.



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