Published:

Lord Lilley is a former Secretary of State for Trade & Industy and for Social Security.

The EU and its apologists claim that, if the UK invokes Article 16, this will entitle the EU to retaliate with trade sanctions against the UK. For example:

“Liz Truss faces choice of Brexit compromise or trade war, warn EU diplomats.” Financial Times headline December 21st, 2021.

“Which UK exporters would the Government expect to be hit by EU rebalancing measures under the Article 16.2?” Lord Kerr of Kinlochard, Hansard December 21st 2021

In fact, Article 16 does not permit retaliation of any kind, let alone trade sanctions, which would be a clear breach of the Withdrawal Agreement.

Article 16 says: “If [one party introduces] a safeguard measure…which creates an imbalance between the rights and obligations under this Protocol, [the other party] may take such proportionate rebalancing measures as are strictly necessary to remedy the imbalance. Priority shall be given to such measures as will least disturb the functioning of this Protocol” [My italics].

Sanctions on UK trade with the EU would be neither “proportionate” to, nor “strictly necessary”, nor a “remedy” for any problems created by any safeguarding measures the UK is likely to introduce.

It is not immediately clear what “creates an imbalance between rights and obligations under the Protocol” means. The Protocol effectively puts most of the legal obligations on the UK whereas the EU has all the legal rights. So, most changes by the UK are likely to reduce that imbalance, not create an imbalance!

Presumably the reference to rights and obligations refers to the fact that the Protocol gives the EU the right to expect that the integrity of its internal market will be maintained (in return for not applying the EU’s normal Customs and SPS controls at the border between Ireland and Northern Ireland).

And the UK has an obligation to ensure (without itself carrying out checks at the Irish border) that goods which are not compliant with EU rules do not enter the Republic.

If the UK disapplies EU Customs and SPS checks on goods entering Northern Ireland from Great Britain, or does not apply EU Single Market laws on goods within Northern Ireland, this would create an imbalance – unless the UK took other effective action to prevent such goods entering the Republic/EU internal market (without introducing checks at the Irish Border). If the UK did meet its obligations by other means, the EU could not claim that the measures “created an imbalance of its rights”, and so would have no right or need to take balancing measures.

If the UK failed to take such action, the EU would have the right to take such proportionate rebalancing measures as are strictly necessary to remedy the situation. It is not clear what action the EU could take unilaterally which would actually remedy the (albeit minor) risk to their internal market. But trade sanctions against UK trade with the EU would certainly not be a remedy.

Both the EU and the UK do have the right, after giving notice, to end unilaterally the Trade and Cooperation Agreement, and revert to trading on WTO terms. But the EU could not claim that such a nuclear option was legally authorised under Article 16 of the Protocol. Indeed, it would be a flagrant contravention of it. So, the EU would have to claim they were doing this for entirely unrelated reasons which would destroy its credibility.

The UK should not, therefore, be deterred from invoking Article 16 for fear of retaliation. However, Article 16 could probably only provide a partial and temporary remedy for the problems caused by the Protocol. So, though invoking it would be legally justified, whether it is worthwhile – other than as a stepping stone to replacing the Protocol – is a moot point.