The EU is likely to shut off the flow of vital security and business data and “slow down” exports through Calais if there is a Brexit trade war, Boris Johnson is being warned.
Brussels has multiple weapons it can deploy that would have “significant economic consequences” for the UK, if the conflict over Northern Ireland escalates, an expert is predicting.
One is the “data adequacy” decision granted by Brussels – to the relief of businesses – but which is only temporary, said Jonathan Portes, of the UK in a Changing Europe think-tank.
“The EU could legally withdraw that at any time – that would have pretty serious implications,” Professor Portes warned.
“There are other non-tariff barriers the EU could use to disrupt trade. It’s not hard to slow things down at Calais simply by imposing extra bureaucratic procedures.”
The warning comes after the prime minister threatened to suspend the Northern Ireland Protocol unless the EU backs down on the checks and restrictions the UK has signed up to.
Tensions have cooled a bit – with Brussels likely to agree a three-month delay to a ban on the sale of chilled meats across the Irish Sea – but that will only kick the can down the road.
The agreement on swapping data is vital to businesses, particularly in the health, insurance and technology sectors, which regularly transfer customer personal information such as bank details.
And it helps with law enforcement co-operation, which has been damaged by the UK losing access to the giant SIS II police database and the European Arrest Warrant system.
Prof Portes said the UK invoking Article 16 of the Protocol would expose “a wider breakdown in the UK-EU relationship” – with serious consequences.
Northern Ireland is “insignificant” to the UK’s overall economy, but he added: “The consequences of a wider trade conflict with the EU would certainly not be insignificant for the UK economy.”
Earlier this month, the European Commission said it was ready to “suspend” parts of the Brexit trade agreement unless the UK ends its refusal to implement the Protocol – but gave no details.
Anand Menon, the think-tank’s director, said Brussels had deliberately inserted the “non-compliance with the withdrawal agreement [on Northern Ireland]” as a justification for retaliation on trade.
In the past, the EU had been “very political” in choosing how to best inflict pain, he said, giving the example of retaliatory tariffs against the US.
“They targeted [senior Republican senator] Mitch McConnell, for instance, targeting with tariffs on whiskey,” Prof Menon said.
“They will have thought through things that they think will hurt the government, politically, so it won’t be a sort of generalised tariff war.”
