UK extends Brexit grace periods for trade into Northern Ireland again

Grace periods covering post-Brexit trade from Great Britain to Northern Ireland will be extended from October 1 "to provide space for potential further discussions" on the contentious Northern Ireland protocol, the U.K. government announced Monday.

The protocol seeks to shift enforcement of the EU’s single market rules from the politically-sensitive border between Northern Ireland and the Republic of Ireland to Northern Ireland’s ports in a bid to resolve a key dilemma thrown up by Britain's EU exit.

Grace periods were extended twice previously: first in March in a unilateral decision by the U.K., and then again in June, when the two sides averted a ban on the import of chilled meat goods entering Northern Ireland from Great Britain.

On October 1, the British government was expected to introduce customs enforcement on parcels moving from Great Britain into Northern Ireland; new charges on some agri-food products taking that route; and increased health checks on food products as well as checks on pets arriving in Northern Ireland from the rest of the U.K. All of these changes will now be delayed as the U.K. and EU continue talks on the protocol.

Britain's Brexit Minister David Frost said in a parliamentary statement Monday that, in order "to provide space for potential further discussions, and to give certainty and stability to businesses while any such discussions proceed, the [British] Government will continue to operate the Protocol on the current basis."

He added: "This includes the grace periods and easements currently in force. Operational and other guidance will be updated to reflect this approach. We will ensure that reasonable notice is provided in the event that these arrangements were to change, to enable businesses and citizens to prepare."

A U.K. official said the government was avoiding putting a new endpoint on the grace periods that had been due to expire in October, arguing that "in terms of creating the space for talks about substance more deadlines aren't helpful."

Commission responds

The move comes amid concern in the European Commission that the U.K. government will not fully implement the post-Brexit trade arrangements agreed as part of the protocol.

The EU was notified of Frost's statement in advance, and, giving its official reaction, the Commission stressed that both sides were "legally bound to fulfill their obligations" under the Brexit deal.

"Our focus remains on identifying long-term, flexible and practical solutions to address issues related to the practical implementation of the Protocol that citizens and businesses in Northern Ireland are experiencing," the statement said. "However, we will not agree to a renegotiation of the Protocol."

The Commission in July paused legal action it had launched against the U.K. over the protocol, but said in its latest statement that it "reserves its rights in respect of infringement proceedings," even if it is "not opening any new infringements for now."

Ireland’s deputy premier and trade minister, Leo Varadkar, meanwhile said after talks with the U.K.'s Michael Gove that he expects the U.K. to delay its own imposition of trade barriers on EU imports to Britain as part of its extension of post-Brexit grace periods on border enforcement. The suggestion was swiftly rejected by the U.K.

A senior government official in Dublin noted that Frost's statement contained no mention of a British delay to its own scrutiny of EU imports, but said Dublin expects London to confirm this in the coming week. “It’s our clear understanding that the British intend to delay introduction of some or all checks originally planned to go live at U.K. ports on October 1," they said. "This could be seen as a quid pro quo for their failure to introduce new measures on GB trade to Northern Ireland by that date. We expect to hear something along these lines, officially, in the coming week."

Britain is Ireland’s top agri-food export market, and that trade is expected to suffer once the U.K.’s port controls on EU imports go live. “The reality is that any delay to the introduction of full border regulations on exports to Britain will be overwhelmingly welcomed by businesses here because Britain is such a fundamentally important market for Ireland," the same Irish government official said.

But a U.K. government official strongly pushed back at Varadkar's comments about EU imports to Britain, saying: “Our position hasn’t changed on that." The U.K. official said they did not understand Varadkar "making that link, they're not really related issues at all.”

'Ideological problem'

The U.K. is pressing for “substantial and significant change” to the post-Brexit arrangement, which the EU has repeatedly said it will not renegotiate.

In a speech over the weekend, Frost, the U.K. Brexit minister, warned that rows over the protocol risked generating “a sort of cold mistrust” between the EU and the U.K. which “could spread across the relationship.”

In what has been interpreted in Brussels as the clearest threat yet of unilateral action under article 16 of the protocol — a safeguard clause allowing either side to temporarily mitigate its effects — Frost said the threshold for triggering “has been met and it is open to the U.K. government to take a range of safeguard measures on this basis.”

An EU official said Frost’s speech shows he is focused less on the practical application of the protocol or the way it is perceived in Northern Ireland, but “the usual ideological problem of sovereignty and freedom.”

And a second EU official suggested the latest changes were unlikely to resolve underlying issues: “Rolling extensions don’t help anyone.”

Source: Politico