From the suspension of Article 16 to a UK-EU ‘trade war’: will Boris Johnson sink his deal?

There is much speculation that Article 16 – the ‘nuclear option’ – could soon be triggered.

Photo – No 10 Press Office. Boris Johnson announces UK-EU trade deal, Dec 2020.

Although some remain modestly optimistic for an agreement between the UK and EU to end the standoff over the operation of the Northern Ireland Protocol (NIP), the war of words underway in the media has created a very negative atmosphere surrounding the talks.

Thanks in large part to UK government media briefings, an atmosphere of expectation around the activation of Article 16 has emerged: a sense that the question is “when” and not “if” the UK takes the plunge. But what does this talk around Article 16 refer to? What would its activation entail? And will it happen?

What is Article 16?
The discussion concerns a “safeguarding clause” written into the NIP which allows for either party (the UK or EU) to suspend aspects of its functioning in the event of “serious economic, societal or environmental difficulties that are liable to persist”.

Triggering Article 16 would not lead to a total suspension of all aspects of the agreement. As the Institute of Government have pointed out in their explainer, it “is not intended to allow either party to suspend provisions of the protocol permanently or in their entirety”.

This points to a problem and contradiction for the UK government side. Whereas Article 16 is designed to cover a genuine emergency situation, they are seeking to use it for a different purpose to the one originally intended: namely, to completely abandon the measures enshrined in the NIP. So, the remedies that they would seek to introduce under the auspices of Article 16 are arguably incompatible with the spirit in which it was written. Whereas the latter provides for temporary loosening of controls, the UK side is seeking to achieve permanent legal changes.

This is why many people in Northern Ireland, the Republic of Ireland and the EU have argued that this is a bad faith proposal on the part of the UK government. The UK are objecting to the content of the agreement that they signed with the EU. They are not responding to a specific crisis. So, there are no legal grounds for triggering Article 16.

What would happen if the UK triggers Article 16?
Article 16 does provide a process for agreeing mutually acceptable solutions between the two parties. But given the bad faith nature of the UK position and the fact that they are seeking changes to the substance of the NIP, the EU side has responded by arguing that they would take steps to suspend the UK-EU trade agreement.

Simon Coveney, the Irish foreign minister, said on Sunday that the UK push towards Article 16 safeguarding measures amounted to “deliberately forcing a breakdown” in the talks with the EU:

“The Trade and Cooperation Agreement that was agreed between the British government and the EU was contingent on the implementation of the withdrawal agreement, which includes the protocol. One is contingent on the other, and so if one has been set aside, there is a danger that the other will also be set aside by the EU.”

Are we heading for a re-run of ‘no deal’?
The EU would have to achieve a consensus around moving towards suspension amongst its member-states. But the expectation is that the bloc would give a 12 month notice for its withdrawal from the agreement, in which time there would be scope for the two sides to negotiate. This may well sound familiar because it recreates a dynamic seen in the negotiations over the UK-EU withdrawal treaty and the subsequent trade deal, i.e., a ticking ‘no deal’ clock.

In the event that the EU does suspend both treaties, UK exporters would lose their tariff free access to the single market for goods – and we would expect the UK to retaliate by putting equivalent costs on EU goods moving into the UK market. This would make UK goods more expensive in the European single market – and, as such, much less competitive.

As the EU market is vastly bigger than the UK’s, it would be virtually impossible for the UK side to ‘win’ such a trade war. But it’s not just exporters that would be impacted – UK consumers would also face rising costs. For example, a 2017 analysis for the Institute of Fiscal Studies pointed out that around 30% of food consumed by UK households is imported with 70% of this coming from EU member states. As households in the bottom 10% of the income distribution allocate 23% of their spending to food (compared to 10% in the top 10%), those least able to pay for these additional costs would be much more exposed to the impoverishing effects of higher prices.  

But goods trade is also not the only area affected. The EU is discussing suspending UK participation in its Horizon science and research programme due to the breakdown in relations over the NIP. There are also reports that the UK is pre-emptively planning to withdraw not only from Horizon but also the Copernicus (Earth observation) and Euratom (nuclear regulation) programmes, which it had previously planned to remain in.   

Will the UK government choose the ‘nuclear option’?  
No one can know for sure whether Article 16 will be triggered by the UK government. At the end of the day, this will come down to the decision of just one person, Boris Johnson.

There are two schools of thought on whether he will follow through with this threat, or if it is just brinkmanship. According to the first, the nationalistic jingoism that gave Johnson his 2019 victory feeds off a continuous state-of-war with the EU. This serves as a reminder to his supporters that only Johnson can be trusted to stand up against a “bullying” Europe and protect the British people. On this reading, Johnson will see conflict with the EU as an electoral opportunity in the run in to general election, which is likely to take place in 2023.

In contrast, the second school of thought questions whether Johnson can credibly run a second general election campaign by emphasising Brexit – something he promised to ‘get done’, so that Britain could move on as a country to other issues. They argue his interests would be best served by striking a deal with the EU quickly, claim it as a victory for his strategy and then turn towards a focus on delivering at least some of his other policies.

Only Johnson can know his true intentions. But, whatever happens, it is clear that the claims he made for the NIP in October 2019 were almost entirely false. Perhaps the big political concern for him should therefore be whether his supporters among the general public might slowly come to the conclusion that he cannot be trusted.