Economy

Truss considers triggering Article 16 over N Ireland protocol

Liz Truss is considering plans to trigger “Article 16” proceedings against the EU over the Northern Ireland protocol within days of entering Downing Street if she succeeds Boris Johnson as prime minister next month, according to several government insiders.

The UK and Brussels are locked in a fractious legal stand-off over implementing the deal covering post-Brexit trading arrangements in Northern Ireland, which has soured EU-UK relations since it came into force in January 2021.

Officials close to Truss have consulted legal and trade experts over the plans in recent weeks. Allies said triggering Article 16 would provide a stop-gap while the legislation to unilaterally rewrite the Northern Ireland protocol passes through the Commons, which is not expected until the end of this year at the earliest.

The British government tabled legislation in June to rip up the deal, prompting the European Commission to relaunch legal proceedings against the UK for failing to properly implement Irish Sea border checks.

Triggering Article 16 would effectively exhaust legal options before the UK government followed through on its threat to unilaterally junk the protocol.

The UK has until September 15 to respond to the EU legal action — only 10 days after the Tory leader enters Downing Street. But insiders with knowledge of Truss’s plans said if she became prime minister she could trigger Article 16 before that deadline in order to protect UK business.

Truss’ campaign said her preference was for “a negotiated solution” but acknowledged “there are serious problems with the Northern Ireland protocol which need fixing”.

Allies of Truss insist she was not “pushing” to trigger Article 16 but that it remained an option on the table if she became prime minister.

One official close to the foreign secretary said: “Some government officials have raised concerns about issues coming down the track and have presented many options to ministers to deal with them.”

The planned move risks ratcheting up tensions with Brussels early in a Truss premiership, but campaign insiders argued that the action would be essential to preserve the trading status quo in Northern Ireland.

Under the terms of the protocol all goods going from Great Britain to Northern Ireland must follow EU rules, creating a trade border in the Irish Sea that the UK government has declared “unworkable”.

The EU has warned that if the UK rips up the protocol it risks sparking a trade war with Europe and potentially even suspending the entire Trade and Cooperation Agreement that was negotiated between the two sides.

Until relations broke down in June, both had agreed to a “standstill arrangement” that required lighter-touch implementation of the deal. However, Truss allies said the EU legal action had effectively ended that agreement by reverting to a demand for full implementation.

The UK said in July 2021 that the conditions had already been met to justify using Article 16, which can be triggered if either side believes the protocol has led to “serious economic, societal or environmental difficulties”.

Once triggered, the two sides enter into “immediate consultation” in the joint committee that governs the deal, but either side can take “proportionate rebalancing measures” if agreement cannot be reached.

Truss’s plans come after HM Revenue & Customs notified British steel producers this week that they will have to pay a 25 per cent tariff to sell certain construction products into Northern Ireland because of the protocol.

Steel industry representatives described the situation as “farcical”, while a UK government spokesman said the tariffs were an example of how the protocol is “needlessly damaging” trade within the UK and “why it needs to be urgently fixed”.

The tariffs move was cited by a Truss ally as to why she intends to act. “We can’t go on like this and something needs to break the deadlock.”

The European Commission said the UK had not provided the data it needed to resolve the tariffs issue, which was triggered as a result of changes to overall import quotas for the EU in July.

It declined to comment on the potential triggering of Article 16.

Earlier this month the UK government started a separate legal proceeding against Brussels after the commission blocked the UK’s associate membership of the EU’s €95.5bn Horizon Europe science programme.

Participation in Horizon was negotiated in 2020 as part of the EU-UK trade deal but has been withheld because of the UK’s failure fully to honour the deal over Northern Ireland, EU officials have confirmed.

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