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UK strategy to propose Internal Markets Bill likely 'a high stakes gamble'

A comprehensive report analyses the policy decisions around the Internal Market Bill, and where it leaves Brexit trade talks.

THE UK GOVERNMENT’S strategy in proposing the Internal Market Bill was “most likely a high stakes gamble” to use the Irish Protocol as “leverage” in trade talks, according to a paper published by the Institute of International and European Affairs (IIEA).

The paper states that this “extraordinary gamble” makes a trade deal more difficult to achieve.

Authored by Blair Horan, a member of the IIEA’s UK Expert Group and former general secretary of the Civil and Public Services Union, the paper uses official policy documents and statements to Westminster committees to provide an analysis on where current EU-UK relations stand.

The EU and UK are currently locked in trade talks that both sides have agreed must conclude at some point this month. The Brexit transition period ends on 31 December, meaning that the UK leaves the Single Market and Customs Union then. 

Though commitments have been made in the Withdrawal Agreement in the event of no trade deal, agreed to and ratified by both sides, the UK has proposed a piece of domestic legislation called the Internal Market Bill that threatens to renege on commitments given on Northern Ireland if a trade agreement is not reached.

This has damaged trust and good faith relations on both sides of an already fraught and strained negotiating timeframe.

The paper concludes that it is difficult to assess “the real purpose” behind the UK government’s decision to table the Internal Market Bill and renege on an international treaty, but adds that “it now seems clear that the UK never intended to implement the Protocol in good faith, if there was no free trade agreement”.

Horan argues that the UK government’s strategy is “most likely a high stakes gamble” to use the Irish Protocol as “leverage” in the trade negotiations on issues such as fisheries, State aid and level playing field commitments, and also to try and secure a “light touch” implementation of the Irish Protocol.

The Protocol was designed by both the UK and the EU to give Northern Ireland tariff-free trade both within the UK and also with the EU – whether there is an EU-UK free trade agreement in place or not.

Horan says that rather than force the EU to compromise on the UK’s demands on fishing and the level playing-field, the proposal of the Internal Market Bill underscores the need for “even stricter conditions” in trade talks to avoid something similar happening again.

The paper also states that compromise is possible on both sides, with an agreement on an alternative means to secure the information that Exit Declarations would provide for NI-GB trade “possible to achieve”, but “limits to the degree of flexibility that the EU can concede on agri-food checks and controls”.

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