Brexit Britain can defeat the EU’s vicious attempt at trade war blackmail

Never let a good opportunity to bash Britain go to waste: that, it would seem, remains the EU’s foreign guiding policy principle. In a staggeringly ill-timed act of revanchism from apparatchiks still seething from the humiliation met upon them in 2016, Brussels is about to force Britain to tear up the Northern Ireland Protocol, potentially triggering a vicious trade war and, in extremis, a complete breakdown in diplomatic relations.

Why such self-destructive stupidity, such demented short-termism, at a time when the war in Ukraine, rampant inflation and the global economic calamity ought to be the only priority? Emmanuel Macron’s latest European vision, which includes a provision for Britain to join a new EU-lite outer circle, provides us with a helpful clue.

It sometimes feels as if the French president, his Napoleonesque delusions reawakened by his election victory, harks back to the days of the Irish Expedition, when revolutionary France sent 12,000 troops to the aid of Irish rebels attempting to drive out the British. The European powers have traditionally seen it as in their strategic interests to interfere in the British Isles, and, astonishingly, have dusted off their old playbooks. The fact that we live in 2022, and that democratic consent should now be the only basis for deciding whether Northern Ireland or Scotland should be part of the UK, or the UK part of the EU, seems to count for naught.

More broadly, Ursula von der Leyen, Maroš Šefčovič, the EU negotiator, the Germans (for all their claims of being more flexible) and Macron are as determined as ever to ensure the UK is seen to lose from Brexit. All the chatter about the renewed unity of the West in response to Russian aggression has turned out to be wishful thinking.

The old European powers – as opposed to the Scandinavians and Eastern Europeans – aren’t thanking us for helping President Zelensky so effectively. They still see us as opponents, not allies, war or no war. They don’t care about the Northern Irish peace process or the Good Friday Agreement, but scent that Boris Johnson, their pet peeve, is flailing.

They increasingly dream of a pliable, docile Labor-led Left-wing coalition in 2024. They assume the PM to be too weak, and parliamentary Remainer forces too emboldened, for him to be able to mount a successful showdown. The Europeans are more than happy to help precipitate the Tories’ demise, and assume that playing hard ball on the Protocol is an easy way to do this.

Yet Brussels is once again on the verge of a disastrous miscalculation. The Protocol is broken. It was always the product of an unequal treaty, a monstrously unjust imperialistic blueprint imposed, Versailles-style, on Brexit Britain, and agreed to only under duress. The sequencing of the negotiations were the result of a series of grievous tactical, strategic and ideological errors by Theresa May.

In the end, Johnson had to sign it, or be subjected by the EU to a trade war (while still failing to resolve the Irish border). There was a chance Brussels would realize that what it obtained was too good to be true, and thus interpret the Protocol sensibly, but it was not to be. Virtually every single British proposal for constructive reform has been rejected. The EU continues to obsess about the supposed sanctity of the single market and the grave risks posed by the possibility of “leakage” of British food products. It’s nonsense, but trade between the UK and Northern Ireland has declined dramatically, among myriad other problems.

Last week’s elections have brought this crisis to a head. The DUP will refuse to form an executive with Sinn Féin until the Protocol is radically reformed. That means no power-sharing, a province in limbo and a severe breach of the core principle of cross-community consensus.

Johnson and Liz Truss must therefore act, for the sake of peace, democracy and prosperity in Northern Ireland. Their hand is being forced: by failing to be reasonable, the EU is giving the Government little choice but to invoke the Article 16 safeguard clause or seek to fix the Protocol via legislation. Whatever consequences follow will be entirely Brussels’ fault.

Either party is entitled to take unilateral “strictly necessary” measures if applying the Protocol “leads to serious economic, societal or environmental difficulties that are liable to persist, or to diversion of trade”. Any retaliatory action by the EU as a result of changes imposed by the UK must be in proportion to the damage suffered.

In this case, it is hard to see any genuine harm being caused. But as we all know, treaties are only sacrosanct to the EU when it accuses somebody else of breaking them. It could even suspend the Brexit trade deal, an outcome for which Britain must urgently prepare. For that, we need a radical change in economic and tax policy, and a Treasury that works with the Foreign Office to cushion the blow.

An emergency Budget would be required, perhaps at only a few days’ notice. Rishi Sunak would need to currency a plan for Britain to stay competitive regardless of what the EU throws at us. That should mean scrapping the planned hike in corporation tax, no windfall tax, making all investment fully, permanently and immediately tax-deductible, drastically deregulating parts of the City (including scrapping the bonus cap), cutting income tax, freer trade with the rest of the world and, above all, dusting out all the plans to turn Britain into something resembling a Singapore-on-Thames. The EU will fight us with protectionism; we should relate with hardcore capitalism.

There is a good chance Brussels will compromise: the European economies are suffering from all the same woes as Britain. Germany is staring into the abyss as a result of its dependence on Russian gas. The geopolitical dynamics have shifted even more profoundly. They don’t realize it yet, but France and Germany no longer enjoy moral leadership within Europe as a result of their performance during the Ukraine crisis. Britain’s position has become correspondingly stronger: we have just signed a military deal with Sweden.

Britain will need to make it clear to its European allies that they will be expected to do all in their power to help stave off the threat of crippling trade sanctions. But if, despite everything, France, Germany and Brussels get their way and the EU goes hostile, we will need to stand ready with our very own economic fireworks.

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