Sunday 24 March 2019

It's war: EU will retaliate over British tariffs threat

  • House of Commons humiliates prime minister in vote to rule out no-deal Brexit
  • Levy plan sparks smuggling fears as May seeks DUP support with direct rule moves
EU Council President Donald Tusk gives a statement after a meeting with Taoiseach Leo Varadkar at the European Council headquarters in Brussels, Belgium. Photo: REUTERS/Yves Herman
EU Council President Donald Tusk gives a statement after a meeting with Taoiseach Leo Varadkar at the European Council headquarters in Brussels, Belgium. Photo: REUTERS/Yves Herman

Kevin Doyle and Cormac McQuinn

The EU will fight “fire with fire” by levying tariffs on UK food exports to Europe if Britain enacts draconian new taxes on Irish farm products in a no-deal Brexit.

In the event of a disorderly Brexit, the UK will levy beef, lamb, pork, poultry and some dairy imported from the EU, including Ireland.

The moves will lead to retaliatory measures by the EU, imposing levies on UK foodstuffs coming into EU markets under its normal ‘third party trade regime’.

The move came ahead of another extraordinary night in the House of Commons where British Prime Minister Theresa May claimed a Brexit delay is now inevitable.

MPs voted to rule out leaving the EU without a deal under any circumstances – but this is merely a declaration of intent. As things stand, the UK remains on course to crash out on March 29 by default.

Mrs May said the only alternatives left are a short extension to get her deal across the line or a lengthy delay.

The development was viewed as a “massive moment” in Dublin with a source saying “the day of reckoning is coming” for hardline Brexiteers.

The British no-deal plan allows products entering Northern Ireland across the land border from the Republic to be exempt from charges.

While this will temporarily ensure no Border checks on traffic going north, it has prompted major fears that Ireland will become a “smugglers’ paradise”.

In Washington, Taoiseach Leo Varadkar said Ireland has a cash pile of “between €10bn and €15bn that we can access should there be any market turbulence”.

Numerous senior Tory ministers defied Theresa May last night by helping pass a vote that supported taking a no-deal Brexit off the table.

There is now an expectation she will table a third 'meaningful vote' on the Withdrawal Agreement next week.

Empire State: Taoiseach Leo Varadkar (centre left) and his partner Matt Barrett walk in the St Patrick’s Day parade in New York City. Photo: PA
Empire State: Taoiseach Leo Varadkar (centre left) and his partner Matt Barrett walk in the St Patrick’s Day parade in New York City. Photo: PA

Irish officials expressed relief that a no-deal crash-out is now the least likely scenario - but also acknowledged that preparations for a disorderly Brexit continue apace.

Tonight MPs will vote on a motion which states that if they agree to a Brexit deal by next Wednesday, then a short Brexit extension will be requested in order to allow the House of Commons to pass the relevant legislation.

If a deal isn't signed off in the coming days, Mrs May will seek "a much longer extension". This would require the UK to take part in European Parliament elections in May.

There is no guarantee EU capitals would sanction a lengthy postponement without a clear purpose, such as a second referendum.

The European Commission responded to developments in London by stating there are only two ways to leave the EU: "With or without a deal.

"To take no-deal off the table, it is not enough to vote against no-deal - you have to agree to a deal. We have agreed a deal with the prime minister and the EU is ready to sign it," a spokesman said.

Responding to another chaotic night in Westminster, Mr Varadkar said: "Things are looking a little brighter today than they did yesterday.

Cornered herself: British Prime Minister Theresa May leaves Downing Street yesterday on her way to the House of Commons. Photo: REUTERS/Henry Nicholls
Cornered herself: British Prime Minister Theresa May leaves Downing Street yesterday on her way to the House of Commons. Photo: REUTERS/Henry Nicholls

"The House of Commons has voted decisively against leaving the EU without a deal."

He now anticipates the UK will seek an extension and the EU will want to know "what the purpose of that extension is and for how long."

He also said the UK's tariff approach would not work for very long and the common external tariff will apply to any goods exported from the UK to the EU.

Foreign Affairs Minister Simon Coveney said this morning that the European Union may offer Britain to delay its exit from the bloc by up to 21 months in what may lead to a "fundamental rethink" of British policy on the matter.

"If you have a long extension of Article 50, that opens up the debate in a much broader way to the overall approach that the United Kingdom takes to Brexit. That may facilitate a fundamental rethink, it may not, we just don't know," Coveney told Sean O'Rourke on RTE radio.

"If you have a long extension of, say 21 months to the end of 2020 - whatever the period would be - then Britain has a legal entitlement to have representation in the European parliament" and so must take part in EU elections, he said.

An EU Commission spokesman said the differential treatment of trade on the island of Ireland and other trade between the EU and UK "raises concerns".

"In the event of no-deal, the Union has already made clear that it will apply its normal third-country trade regime to all trade with the UK, and accordingly charge MFN tariffs on imports from the UK into the EU.

"This is essential for the EU in order to remain a reliable trade partner to the rest of the world, including upholding internationally-agreed rules on global trade," he said.

Mr Varadkar accused Brexiteers of "chasing unicorns now for a very long time".

He insisted Ireland is "well prepared for a no-deal" and the Government would support businesses, farmers and fishermen.

"There will be damage limitation, we will protect incomes, we will protect jobs and we will support businesses to overcome whatever happens in the next couple of weeks," he said.

The no-deal trade arrangements put forward by the UK are to be "strictly temporary" and introduced as part of efforts to maintain a free-flowing Border.

However, they represent only the UK side of what a post-Brexit Border would look like.

It will be for the EU to set out what tariff regime would apply to goods travelling North-south.

Mr Varadkar said the UK approach would not work for very long and the common external tariff will apply to any goods exported from the UK to the EU. He predicted that "within a matter of months that would lead to the need for checks at Northern Ireland's ports", which is essentially a border in the Irish Sea rather than a land border.

In a clear dig at the DUP, the Taoiseach said the UK tariff plan proposes "to treat Northern Ireland differently from the rest of the United Kingdom in a few weeks' time".

"Let's not forget one of the big objections to the backstop was that might happen in a few years' time."

Senior officials from the Department of Agriculture were in Brussels yesterday meeting EU Commission representatives about potential bailouts for the sector in a worst case scenario.

Irish Independent

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