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Šefčovič optimistic that deal on Northern Ireland can be reached by the end of the year

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European Commission Vice President Maros Šefčovič presented (14 October) what he described as a “package of enhanced opportunity” for Northern Ireland. The corollary of these proposals is that the UK needs to make sure its permanent border posts are up and running, “as agreed a long time ago”, as well as additional safeguards to monitor the supply chain.

The proposals follow extensive discussions with stakeholders, in particular Northern Ireland business through a Brexit Working Group. Šefčovič said the proposals addressed ‘elements’ of the UK’s command paper published in July 2021. Asked about Lord Frost’s recent speech in Lisbon, where he announces that the UK was proposing a new legal text to replace the protocol which removed the role of the European Court of Justice, Šefčovič said that access to the Single Market without supervision of the European Court of Justice was not possible and that the UK should focus on what stakeholders want, which he said was the resolution of practical issues. 

The package consists of four ‘non-papers’ and proposes further flexibilities in the area of food, plant and animal health, customs, medicines and engagement with Northern Irish stakeholders. On medicines, Šefčovič said that during his visit to Belfast in September, he committed to do “whatever it takes to guarantee the uninterrupted long-term supply of medicines from Great Britain to Northern Ireland”, saying that the Commission had turned its rules “upside down and inside out to find a solid solution to an outstanding challenge that involves the EU changing its own rules on medicines”. 

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Šefčovič acknowledged that there have been some teething problems and that the papers address these issues. The proposed measures will amount to an 80% reduction in checks and a halving of customs formalities with “bespoke solutions”. The Commission presented its package to the UK-side in London yesterday. Šefčovič has invited Lord Frost for lunch on Friday, which he hopes will kick off an intensive process of discussion with the hope of reaching a deal before the end of the year: “We can start the new year with the new agreements, new rules in place, and finally focus on what I hope will be the future and that would be a new positive agenda for EU/UK relations.”

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UK proposes new text to replace Ireland/Northern Ireland Protocol

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In a speech delivered in Lisbon (13 October), Lord Frost, the UK’s representative in EU-UK discussions announced that the UK has proposed a new legal text to replace the current Ireland/Northern Ireland Protocol to replace the one already agreed in 2019. 

The proposal came a day ahead of an EU announcement to ease difficulties linked to what is called East/West trade between Northern Ireland and Great Britain, Vice President Sefčovič will put forward four proposals concerning medicines, sanitary and phyto-sanitary surveillance, customs and a way to enhance democratic governance of the Northern Ireland Protocol.

Frost claims that the agreement reached with the EU in 2019 was done at haste and under duress. The deal agreed was the cornerstone of Prime Minister Johnson’s electoral campaign in 2019, where he claimed that the UK had negotiated an “oven ready deal”. Johnson was then able to steer the deal through parliament with a 80 seat majority in the House of Commons, seemingly receiving a democratic endorsement for his deal. 

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The legal text that has been shared with the European Commission will try to reverse the EU’s two stage process where the Withdrawal Agreement was completed before negotiations on the later Trade and Cooperation agreement was reached.  Frost argues that it makes sense to review the Withdrawal Agreement given the thinness of the later deal he negotiated. 

Secondly, as heavily trailed in the media, the UK wants to remove the European Court of Justice from the arbitration over any disputes concerning EU law. As Northern Ireland continues to benefit from the Single Market in goods this would not be legally possible, this has already been established in EU law. Lord Frost argues that the current agreement cannot be part of a durable settlement.

Lord Frost is asking for nothing less than a reversal of the legal provisions of the Single Market which the EU cannot agree to. The EU negotiated the deal to avoid the creation of border infrastructure on the Ireland/Northern Ireland border, this was a shared view of the EU and UK throughout negotiations following the UK's referendum in 2016.

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French minister Beaune: French fishermen must not pay for UK's Brexit failure

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Fishing trawlers are docked at Boulogne-sur-Mer after Britain and the European Union brokered a last-minute post-Brexit trade deal, northern France, December 28, 2020. REUTERS/Charles Platiau

French European Affairs Minister Clement Beaune said today (8 October) that French fishermen must not pay for the failure of Britain's exit from the European Union, writes Dominique Vidalon, Reuters.

"They failed on Brexit. It was a bad choice. Threatening us, threatening our fishermen, will not settle their supply of turkey at Christmas," Beaune told BFM TV.

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"We will hold firm. The Brits need us to sell their products," he added.

Earlier this week, Prime Minister Jean Castex said France was ready to review bilateral cooperation with Britain if London continues to ignore the agreement reached over fishing rights in its post-Brexit trading relationship with the European Union. Read more.

Paris is infuriated by London's refusal to grant what it considers the full number of licenses due to French fishing boats to operate in Britain's territorial waters, and is threatening retaliatory measures.

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French fishermen have also said they could block the northern port of Calais and Channel Tunnel rail link, both major transit points for trade between Britain and continental Europe, if London does not grant more fishing licences in the next 17 days.

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Brexit cold turkey - UK tries to kick 25-year imported labour habit

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The United Kingdom's 25-year-old model of importing cheap labour has been up-ended by Brexit and COVID-19, sowing the seeds for a 1970s-style winter of discontent complete with worker shortages, spiralling wage demands and price rises, writes Guy Faulconbridge.

Leaving the European Union, followed by the chaos of the biggest public health crisis in a century, has plunged the world's fifth-largest economy into a sudden attempt to kick its addiction to cheap imported labour.

Prime Minister Boris Johnson's Brexit experiment - unique among major economies - has further strained supply chains already creaking globally for everything from pork and poultry to medicines and milk.

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Wages, and thus prices, will have to rise. Read more.

The longer-term impact on growth, Johnson's political fortunes and the United Kingdom's on-off relationship with the European Union is unclear.

"It's really a big turning point for the UK and an opportunity for us to go in a different direction," Johnson, 57, said when asked about the labour shortages.

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"What I won't do is go back to the old failed model of low wages, low skills, supported by uncontrolled immigration."

He said Britons had voted for change in the 2016 Brexit referendum and again in 2019, when a landslide election win made Johnson the most powerful Conservative prime minister since Margaret Thatcher.

Stagnant wages, he said, would have to rise - for some, the economic logic behind the Brexit vote. Johnson has bluntly told business leaders in closed meetings to pay workers more.

"Taking back control" of immigration was a key message of the Brexit campaign, which the Johnson-led "Leave" campaign narrowly won. He later promised to protect the country from the "job-destroying machine" of the European Union.

Johnson casts his Brexit gamble as an "adjustment" though opponents say he is dressing up a labour shortage as a golden opportunity for workers to increase their wages.

But restricting immigration amounts to a generational change in the United Kingdom's economic policy, right after the pandemic triggered a 10% contraction in 2020, the worst in more than 300 years.

As the EU expanded eastward after the 1989 fall of the Berlin Wall, Britain and other major European economies welcomed millions of migrants from countries like Poland, which joined the bloc in 2004.

No-one really knows how many people came: in mid-2021, the British government said it had received more than 6 million applications from EU nationals for settlement, more than double the number it believed were in the country in 2016.

After Brexit, the government stopped giving priority to EU citizens over people from elsewhere.

Brexit prompted many eastern European workers - including around 25,000 truckers - to leave the country just as around 40,000 truck licence tests were halted due to the pandemic.

Britain is now short of about 100,000 truckers, leading to queues at gas stations and worries about getting food into supermarkets, with a lack of butchers and warehouse workers also causing concern.

"Wages will have to go up, so prices for everything we deliver, everything you buy on the shelves, will have to go up too," said Craig Holness, a British trucker with 27 years experience.

Wages have already soared: a heavy goods vehicle (HGV) Class 1 driver job was being advertised for £75,000 ($102,500) per annum, the highest the recruiter had ever heard of.

The Bank of England said last month that CPI inflation was set to rise to 4% late this year, "owing largely to developments in energy and goods prices", and that the case for raising interest rates from historic lows appeared to have strengthened.

It cited evidence that "recruitment difficulties had become more widespread and acute", which the Bank's agents had attributed "to a combination of factors, including demand recovering more quickly than expected and a reduction in the availability of EU workers".

Johnson's ministers have repeatedly dismissed the idea that Britain is heading for a "winter of discontent" like that which helped Thatcher to power in 1979, with spiralling wage demands, inflation and power shortages - or even that Brexit is factor.

"Our country has been running at a comparatively low rate of wage growth for a long time - basically stagnant wages and totally stagnant productivity - and that is because, chronically, we have failed to invest in people, we have failed to invest in equipment and you've seen wages flat," Johnson said on Sunday.

But he did not explain how wage stagnation and poor productivity would be solved by a mixture of lower immigration and higher wages that fuel inflation which eats into real wages.

It was also unclear how higher prices would affect an economy that is consumer-driven and increasingly reliant on supply chains whose tentacles wind across Europe and beyond.

For some observers, the United Kingdom has come full-circle: it joined the European club in the 1970s as the sick man of Europe and its exit, many European politicians clearly hope, will lead it back into a cautionary dead-end.

Johnson's legacy will depend on proving them wrong.

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