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Gove defends UK’s ‘no tariff’ border plan for Northern Ireland

But environment secretary concedes that countries may challenge proposal at WTO

UK plans to suspend import duties and allow goods to flow from Ireland across the border into Northern Ireland unchecked in the event of a ‘no deal’ Brexit are justified on political and security grounds, according to the country’s environment secretary.

Michael Gove told the House of Commons Environment, Food and Rural Affairs Committee today (March 27) that the government must do all it can to ensure there is a frictionless border on the island of Ireland should the UK leave the EU without a deal.

“We believe that there are specific exemptions because of the broader political and security situation in Northern Ireland underpinning the Good Friday Agreement, which means we can be allowed to do everything that we can – of course we could not keep this situation indefinitely – but we can do everything that we can for a period in order to maintain a frictionless border,” Gove said.

Announced earlier this month alongside plans to remove import duties on almost all agri-food products, except for certain ‘sensitive’ sectors such as sheep meat and dairy, the proposal would see no tariffs applied at the Northern Ireland border but applied at other UK points of entry.

WTO challenge?

Trade experts have argued that the plans may be incompatible with World Trade Organization rules, while the Irish EU Agriculture Commissioner Phil Hogan has said the European Commission is investigating that possibility.

When questioned by the Committee today on whether there are issues with the border plan, Gove said “legal advice has been sought” but admitted “other countries could choose to challenge us at the WTO.”

Should they lose such a WTO case, Gove said that there would be border and security implications that would “raise new questions” over the proposal. “No deal creates some particular problems,” he said.

Tellingly, he had earlier said: “But as you are aware, there are a number of cases before the WTO at the moment.”

The latter comment is in reference to the WTO’s dispute settlement system, which is under increasing strain as a result of issues such as the US application of tariffs on imports of steel and aluminium as well as agriculture-related issues including India’s sugar subsidy regime.

Appellate judges

A continuing blockade by the United States on new appointments to fill vacant positions on the Appellate Body – which helps arbitrate trade disputes between WTO members – is also adding to the workload.

There are only three remaining Appellate Body judges able to oversee cases, with the terms of two of them set to expire in December 2019 and the other in November 2020. At least three judges are required for the body to oversee each case, meaning with no new appointments the system could grind to a halt completely later this year unless reforms are agreed.

In addition, a new development yesterday (March 26) saw the WTO forced to postpone a regular dispute settlement meeting after the US refused to recognise Venezuela – the US is among 50 countries that see opposition leader Juan Guaido as the country’s interim president – leading some commentators to speculate that meetings will not be able to take place at all until the situation is resolved.

Therefore, should a challenge be made at the WTO to the UK’s border plans the case may take some time to resolve via the dispute settlement mechanism, by which time the government would hope to have a lasting solution in place to cross-border trade that would replace the current plans.

In terms of tariffs, Gove pointed out that in a no deal scenario the proposed tariff regime is explicitly designed to be temporary as a stepping stone to a new agreement, as they will be talking to both the EU and other markets about future trading relationships almost immediately.

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