Brexit: Trade talks hang in balance as UK rejects EU ultimatum

Talks over a trade deal with the EU are hanging in the balance amid a stand-off over the UK’s plans to override part of the Brexit withdrawal agreement.

The EU has warned the UK it could face legal action if it does not ditch controversial elements of the Internal Market Bill by the end of the month.

Concerned Conservative MPs have launched a bid to amend the new law.

Boris Johnson is hosting a virtual meeting with his MPs to discuss the controversial bill.

The prime minister’s official spokesman said he would reiterate his commitment to working on the implementation of the withdrawal agreement with the EU.

But he would also say, if that work failed, “as a responsible government, we must provide a safety net that removes any ambiguity”, he added.

Meanwhile, informal trade talks between the two sides are due to resume on Monday amid “significant” differences.

No 10 said this week’s discussions had been “relatively more constructive than you might expect”, but added: “Ultimately, progress will be determined by whether we get more realism from them on the key areas of divergence.”

The next official round of talks – the ninth since March – will begin in Brussels on 28 September.

Mr Johnson’s proposed Internal Market Bill, which will be formally debated in the House of Commons for the first time on Monday, addresses the Northern Ireland Protocol – an element of the Brexit withdrawal agreement designed to prevent a hard border returning to the island of Ireland.

The new law would give UK ministers powers to modify or “disapply” rules relating to the movement of goods that will come into force from 1 January, if the UK and EU are unable to strike a trade deal.

The PM’s spokesman said it would also “ensure the government can always deliver on its commitments to the people of Northern Ireland”.

The publication of the bill prompted emergency talks on Thursday, in which the EU said the planned changes must be scrapped or risk jeopardising the UK-EU trade talks.

But the government defied the EU’s demand, insisting it would proceed as planned with the legislation it says is necessary to protect the integrity of the UK and the peace process in Northern Ireland.

Time and trust are running out

When it comes to Brexit, all negotiations are inter-linked: EU-UK trade talks, the process to implement their divorce deal, negotiations on fishing rights and Brussels’ deliberation on UK financial service.

What happens in one area very much affects progress in the others. You cannot separate them entirely.

Which is why this week, as the war of words and wills between Brussels and Downing Street raged over the government’s threat to throw a grenade at key parts of the divorce deal, everyone’s thoughts turned immediately to the trade talks between the two sides.

Could they survive? In fact, they limp on.

Despite bitter arguments over legislation and a huge list of outstanding issues still to be ironed out in bilateral trade talks; despite time and trust running out on both sides; neither the EU nor the UK seem to want to be the first ones to walk out the door.

Read more here.

After the latest round of trade talks concluded in London on Thursday, the UK said it remained committed to reaching a deal but the process was “challenging”.

Boris Johnson has previously said he would walk away from the negotiating table if an agreement with the EU is not reached by 15 October.

‘Not if, but how’

Business Minister Nadhim Zahawi defended the legislation as necessary in case existing “ambiguities” in the withdrawal agreement are not settled through the formal dispute resolution process.

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“It’s not about if we implement the withdrawal agreement and the Northern Irish Protocol; it’s how we implement it,” he told BBC Radio 4’s Today programme.

“If we don’t reach an agreement in time by the end of the year… we can’t allow any adverse impacts on the communities in Northern Ireland.

“No government, no minister, can allow any community within our country, within the UK, to be damaged.”

But the prime minister’s approach continues to cause unease within the Conservative Party, with former leaders Theresa May, Lord Howard and Sir John Major among those urging him to think again.

Former chancellor Lord Lamont said the government was in a “terrible mess” and warned that the Internal Market Bill would not get through the House of Lords in its present form.

And even strong supporters of the government’s overall Brexit strategy and the bill have expressed concerns about how events could play out.

Sir Bernard Jenkin – a member of the strongly pro-Brexit European Research Group (ERG) – told LBC Radio that Mr Johnson “should be more mindful of the reputational damage of playing such hardball”.

‘Poor decisions’

Leading Brexiteer and former ERG chairman Steve Baker told Today the UK was “in a bad place” after a “series of very poor decisions”.

He said a solution was “tantalisingly within our grasp” if a free trade agreement could be concluded but the UK should be prepared to “repudiate” the whole withdrawal agreement as the EU had acted in “bad faith”.

Meanwhile, senior Conservative backbencher Sir Bob Neill, who chairs the Commons Justice Committee, is tabling an amendment to try to force a separate parliamentary vote on the three contentious clauses of the bill.

Sir Bob, whose backers include ex-cabinet minister Damian Green, told Times Radio they were “not natural rebels”.

“So I hope it’s at least an indication as a government that really, you need to think very hard and carefully about going down this route,” he said. “For heaven’s sake, try and find some other way.”

Gordon Brown has become the latest former prime minister to warn of the damage the move could do to the UK’s international reputation, telling Today it was a “huge act of self harm”.

The ex-Labour leader added: “If I had done that when I was prime minister, the Conservatives would have accused me of breaching the rule of law and would have thrown everything at us.”