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Britain and the EU look to be on the verge of a trade war after Brussels accused Boris Johnson of being untrustworthy in talks on Northern Ireland's future, threatening "severe consequences" if Downing Street halted the post-Brexit agreement.

After a tense meeting with the UK's Brexit minister Lord David Frost, EU Commissioner Maros Sefcovic told reporters that the UK has not made any moves despite Brussels' attempts to reach a compromise over the Northern Ireland trade deal.

For the past three weeks, the two sides have been in talks about modifying the Brexit deal to preserve open commerce between the United Kingdom and Northern Ireland. The EU claims that David Frost has made little attempt to engage with the EU's plans, which include eliminating customs procedures and reducing health checks on animal and plant items headed to supermarkets by 80%.

EU officials encouraged the UK on Friday to comply by the rules of the Northern Ireland customs accord, which is part of the 2019 Brexit deal.

Maros Sefcovic, the EU's lead Brexit negotiator, warned that suspending parts of the Northern Ireland Protocol would have serious implications.

Northern Ireland Protocol: What is it?

The protocol allows commodities to transit freely between the Republic of Ireland an EU member and Northern Ireland. Similarly, products entering Northern Ireland from the rest of the United Kingdom are now scrutinized by customs.

Northern Ireland remains in effect in the single market for goods under the protocol, while the EU's customs rules are applied to goods originating in the United Kingdom. Brussels acknowledges that these arrangements have disrupted Northern Ireland's political stability.

Lord Frost stated on Friday that the proposed solutions are insufficient. The British government wants to keep trade flowing freely between Northern Ireland and the rest of the EU's market, without involving the European Court of Justice.

Pro-British unionists in Northern Ireland are angry about a new customs border in the Irish Sea. The EU wants to modify the deal and remove some limitations on British goods entering Northern Ireland.

What Transpired Throughout the Debate

In the discussion with Sefcovic, Lord Frost laid forth the UK's view of the protocol negotiations, according to the UK government. He stressed that development had been slow and that the EU's plans did not address the underlying problems with the protocol's operation at this time.

Article 16 of the protocol allows any side to adopt unilateral protection actions, including suspending parts of the Johnson-Brussels agreement if it poses serious economic, environmental or sociological, issues.

The move would be regarded as incendiary by EU capitals, angered by the refusal to implement the October 2019 deal by Downing Street. Frost warned, however, that invoking article 16 was not off the table, noting that time was running short.

David Frost said that he hoped to make some progress, but that the gap between UK and the EU was still quite large. We'll see where we can go, said Lord Frost. Even though article 16 won't be triggered at this moment.

Following the publication in Brussels of a plan to drastically reduce the level of checks on trade between Great Britain and Northern Ireland on 12 October, Lord Frost gave the EU a three-week deadline. After the Cop26 climate talks end on 12 November, decisions on article 16 is expected to be made.

Frost said he won't give any time frames or hypotheticals. “We are separated by a significant distance. If that chasm closes, and the commission pays attention to what we've said in the command paper and considers the situation in Northern Ireland, we might be able to make progress.”

EU Actions if the UK Invokes Article 16

There has been talking that the UK could use article 16 to carry out its vision for Northern Ireland, which was laid out in a command paper released in July. However, the treaty only permits acts that are necessary to correct the problem. The administration is still debating what this legally allows.

If the UK invokes article 16, the EU will have several alternatives, including delivering notice of termination of the trade and cooperation agreement that guarantees tariff-free trade.

According to analysts, Brussels is unlikely to take such an action because the treaty has a variety of alternative tools for responding to the UK, including targeted taxes on British products.

Final Thoughts

Since Brexit, the relationship between the European Union and the United Kingdom is not in the best shape. However, it is currently deteriorating further as the United Kingdom attempts to renegotiate the EU's trade agreement with Northern Ireland. 

This new trade war could result in further tariffs being imposed on both sides. As a result, several EU members are already debating terminating the trade and cooperation agreement with the United Kingdom, as well as taking actions to make trading with the United Kingdom more difficult. The consequences of this trade war might have far-reaching consequences for ordinary citizens on both sides.

Written By: Olivium's Staff.

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