Lord Frost said the Northern Ireland Protocol – put in place to prevent a hard border on the island of Ireland – was “not working and had to change”.
He said he feared the UK’s proposals would not be accepted by the EU.
Lord Frost said triggering Article 16, which would suspend part of the deal, could become “the only way” to go.
In October 2019, the UK and the EU reached a special Brexit deal for Northern Ireland, known as the Protocol.
It leaves Northern Ireland in the EU’s single market for goods.
This means that goods can move freely between the Republic of Ireland and Northern Ireland, thus eliminating the threat of a “hard border”.
However, goods arriving in Northern Ireland from the rest of the UK are now subject to checks and control.
This arrangement is called the Irish Sea boundary.
Article 16 of the protocol sets out the procedure to be followed to take unilateral “safeguard” measures if the EU or the UK concludes that the operation of the agreement causes serious problems.
These guarantees would be tantamount to suspending certain parts of the agreement.
What exactly does section 16 say?
Safeguard measures can be taken if the protocol leads to serious “economic, societal or environmental difficulties” which may persist.
So, although it is not intended to be used for temporary or minor problems, there are no specific guidelines on what can qualify as a “serious” difficulty.
Additionally, it can be used if the protocol leads to “trade diversion”, but again, there is no indication as to how this should be interpreted.
The UK government says it believes the threshold for using collateral has been reached, but chooses not to use them at this time.
A one month notice of default is supposed to be given before any action, although immediate action is permitted in “exceptional circumstances”.
Can the whole agreement be suspended?
This is not the intention.
The text of Article 16 says that any measure must be limited both in scope and duration and limited to what is “strictly necessary” to resolve the problems.
In addition, he says that priority will be given to measures which “disrupt the operation of the protocol the least.”
Negotiations would continue, with all guarantees being reviewed jointly every three months with a view to their removal or limitation.
However, this would still seem to leave the UK government quite a bit of discretion over what action to take.
For example, one of the biggest practical impacts of the protocol is that it has become much more difficult to ship food from Britain to Northern Ireland, especially for small businesses.
If the government claims this amounts to trade diversion which is likely to persist, then could it unilaterally suspend most food checks and controls?
The government has not explicitly said what it will do, but it is worth looking at what it proposed in its July order document.
He said he wanted an arrangement where there is “no need for certificates and checks for individual items that are never intended for consumption in Northern Ireland.”
Raoul Ruparel, who was Theresa May’s senior Brexit adviser, says he thinks this type of approach is likely.
Writing on Twitter, he said: “It is pretty clear what the UK wants to do. It will likely suspend parts of the protocol around the (Irish Sea) border – customs and agribusiness in particular.
“He will travel to implement his approach as set out in the order document.”
What could the EU do in return?
If it concludes that the UK’s actions create an “imbalance” between its rights and obligations under the protocol, then the EU can take “proportionate rebalancing measures”.
These are not defined and would be largely determined by what the UK does.
The EU is supposed to prepare legal measures which, for example, could call into question the scope of the UK’s actions under Article 16.
Ultimately, the EU could impose tariffs on British products, but that would only be possible after a lengthy arbitration process.
Arbitrators should first find that the UK is in breach of protocol.
Then the UK would have to refuse to remedy that breach, in which case the EU could retaliate under the terms of the broader Brexit deal, the ATT.
This may require another arbitration process to decide whether the use of tariffs is a proportionate retaliatory measure.
There is a potentially faster legal route known as an infringement procedure which could result in a fine in the UK.
The EU could also take more informal political action.
Can a confrontation on article 16 be avoided?
The EU agrees that in some ways the functioning of the Protocol is causing difficulties for Northern Ireland.
It is preparing to present a set of measures to improve its implementation.
Lord Frost is skeptical as to whether they will go far enough, but it is possible that they could serve as the basis for a negotiated settlement.