Brexit talks on brink as UK rejects EU call to drop law-breaking plan

Brussels has given Boris Johnson’s government three weeks to drop plans to break international law or face financial or trade sanctions, as EU lawyers ruled that Britain has already breached the withdrawal agreement by tabling the internal market bill.

In a hard-hitting statement following a meeting with Michael Gove in London, the European commission’s vice-president, Maroš Šefčovič, put the prime minister on notice that he needed to regain Brussels’ trust. He raised the prospect of both a collapse in the on-going trade and security talks and a legal battle with the bloc.

“The EU does not accept the argument that the aim of the draft [internal market] bill is to protect the Good Friday (Belfast) agreement. In fact, it is of the view that it does the opposite,” the European commission said in a statement.

It said Šefčovič had told Gove “in no uncertain terms” that the UK government must “withdraw these measures from the draft bill in the shortest time possible and in any case by the end of the month”.

Šefčovič had stated that “by putting forward this bill, the UK has seriously damaged trust between the EU and the UK”, the commission said. “It is now up to the UK government to re-establish that trust.”

Less than two hours later Gove said Downing St would not climb down: “I made it perfectly clear to the vice-president of the commission we would not be withdrawing this legislation.

“I explained to Vice-president Šefčovič that we could not and would not do that … he understood that. Of course, he regretted it.”

Gove said the UK was “absolutely serious about implementing the Northern Ireland protocol” and looked forward to setting out the justification to critics within his own party, which include former leaders Michael Howard, Theresa May and John Major when the bill has its second reading on Monday.

The Cabinet Office minister said it was “a good meeting” in which the UK “stressed the importance of making progress” to iron out the details of the Northern Ireland protocol in the UK-EU joint committee.

The European commission made clear in its statement that it considered the unliateral move to be illegal and that it would “not be shy” in using legal measures, including action against the UK, for “violation of good faith obligations”.

Šefčovič had “reminded the UK government that the withdrawal agreement contains a number of mechanisms and legal remedies to address violations of the legal obligations contained in the text – which the European Union will not be shy in using”, the statement said.

The clash has overshadowed the eighth round of negotiations between Michel Barnier and his British counterpart, David Frost, with just five weeks to go until a 15 October deadline set by the prime minister for an agreement on a trade deal.

According to an EU legal opinion, leaked to the Guardian, the commission believes Johnson’s government has already breached the terms of the treaty just by taking the first steps to pass a new law that would negate key parts of the withdrawal agreement signed last year.

“Already by tabling the draft bill and pursuing the policy expressed therein, the UK government is in violation of the good faith obligation under the withdrawal agreement (article 5) because this bill jeopardises the attainment of the objectives of the agreement,” the commission lawyers write.

The commission has advised the 27 EU capitals that there are therefore grounds for the bloc to take “legal remedies” through the European court of justice before the end of the transition period, leading to significant fines or potential trade sanctions.

The legal opinion goes on to say that should the legislation be adopted it would be in “clear breach of substantive provisions of the protocol” in waiving any export procedures or formalities on the trade of goods from Northern Ireland to Great Britain and in restricting the application of EU state-aid rules in the case of Northern Ireland.

“Once the bill is adopted the commission may initiate infringement proceedings against the UK for breach of the good faith obligations,” the EU lawyers write. “Even before the bill is adopted, it could be defendable to bring infringement proceedings on the same grounds.”

The paper says the EU court has the potential to “impose a lump sum or penalty payment” on the UK, or Brussels could use the dispute settlement mechanism under the withdrawal agreement, “which may ultimately also result in the imposition of financial sanctions by the arbitration panel”.

[henrybeans]

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