• Wed. Jun 23rd, 2021

Is Britain ready for a sausage trade war with the EU?

ByAmeerah O'Connor

Jun 8, 2021
Is Britain ready for a sausage trade war with the EU?

Out of the frying pan and into the fire? Sausages are the latest Brexit flashpoint. – David Marsden /Getty Images Contributor

Will Brussels’s threat of a sausage trade war escalate into full-blown conflict or turn out to be just another Brexit bunfight?

Boris Johnson may extend grace periods for chilled meats in the Northern Ireland Protocol so that shops in the country can continue to sell British bangers and pork pies from July.

This would be seen as a major provocation by Brussels that requires a stronger response than the legal action already brought against the UK for separate unilateral extensions of grace periods.

Maros Sefcovic, the commission vice-president helming the EU negotiations over the protocol, is seen as a pragmatist by sources on both sides.

Member states are increasingly anxious that Britain – and Lord Frost in particular – is making them look like mugs and want Mr Sefcovic to get tough.

If the UK overrides the Protocol for a third time, the European Commission will start fresh legal action. At the same time it will trigger dispute resolution settlement procedures in the Brexit trade deal.

This will lead to the creation of an arbitration panel of experts. If Britain was to persist in a breach decided by the panel, the EU would be able to take stronger measures, including imposing tariffs or even suspending parts of the trade deal.

The tariffs would not be limited to chilled meats and could hit across sectors, for example UK fish exports, which makes them, on paper, a powerful deterrent.

But the trade deal also makes clear that any retaliatory measures have to be proportionate, or risk a challenge from the partner being hit by the tariffs.

Given the relatively small amount of trade British sausage imports to Northern Ireland represents, the EU would be limited in its ability to really hurt the UK.

The Trade and Cooperation Agreement with the EU is structured to limit and contain any dispute and prevent escalation to a full-blown trade war.

Political rows can quickly spiral out of control

But the early days of the UK-EU relationship after Brexit has shown that rows can quickly spiral out of control when politics gets involved.

Who would ever have predicted that, however briefly, Brussels would threaten a hard border in Ireland to enforce a coronavirus vaccine export ban against the UK? Or that Royal Navy and French ships would shadow each other in Jersey’s waters in a fishing licence spat?

Mr Johnson would be under huge pressure to retaliate with tariffs of his own in what could become Britain’s first post-Brexit trade war as an independent nation. The temptation to battle for Britain against Brussels will be strong.

Some ministers have already signalled that Britain would answer any tariffs, even though the trade deal could allow the UK to retaliate without tit-for-tat action.

The Government would have to identify a hit list of products, which could lead to further retaliation on British exports. Would Mr Johnson really want to be responsible for soaring prices of Italian Prosecco in British supermarkets for the sake of the odd Cumberland being sold in Belfast?

Both sides would have levers to pull but the EU is confident its greater size will tell in the end, despite the large British market for its goods.

The UK could withdraw market access for EU financial services firms, which is something Brussels still has not granted the City. Or it could finally introduce full border controls on EU exports.

The EU could junk a lucrative data-sharing agreement with the UK or make access to its research funding programmes more difficult.

Trade wars, especially those with a major partner, are essentially self-defeating and drive up prices for customers on both sides.

It may suit politicians in Brussels and London to indulge in the theatre of battle. But it will do nothing to draw the poison of the rocky start to the post-Brexit UK-EU relationship or help Northern Ireland.

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