Britain on Tuesday outlined proposed legislation to unilaterally repeal some post-Brexit trade rules for Northern Ireland, which is at risk of a diplomatic crisis and the threat of a trade war with the European Union.
Both sides have been trying for months to break a stalemate over the Northern Ireland Protocol, which sets trade rules for British-administered territories that London agreed to before leaving the EU but now says they are ineffective.
Below are some changes to the UK’s plan to incorporate this law:
Checks the goods
When Britain left the EU, Prime Minister Boris Johnson agreed to an agreement that effectively kept Northern Ireland in the bloc’s bloc union as EU member states created a tariff border with Britain as they had an open border with Ireland.
Britain now wants to reduce the number of checks for goods going from Britain to Northern Ireland.
The government is proposing to set up a “green lane” for vehicles carrying goods from Britain to Northern Ireland only. This will include trusted trader programs and real-time data sharing with the EU.
A separate “red lane” with full checks will be created for products that may end up in Ireland and the EU.
It is designed to alleviate the paperwork faced by companies that say they will be unable to deliver a full range of products in Northern Ireland because the number of checks is too tight.
The government says businesses will choose between meeting the UK or EU standards in a new dual regulatory system.
Any company that fails to comply with the new trading system will face severe penalties.
In March, Britain’s finance minister, Sage Sunak, announced plans to reduce the value-added tax on installing solar panels, insulation and heat pumps.
But the government has not been able to enforce that policy in Northern Ireland because the protocol means all Northern Ireland products must comply with EU VAT rules.
The government wants to repeal the rule, saying the British-ruled province is being treated unfairly and should benefit from government assistance.
European Court of Justice
Britain wants to end the role of the European Court of Justice as the sole arbiter in disputes with the European Union over the validity of the protocol.
British Foreign Secretary Liz Truss told Parliament: “Our solution is to start an arbitration process … without ECJ as the final arbitrator.”
More details on how this could work will be released next week, a government official said.