The last thing Liz Truss needs is a trade war with the EU

The favourite to be the next prime minister is said to be considering triggering Article 16 of the Northern Ireland protocol, which would be a tactically smart move, argues Sean O’Grady

Liz Truss is the frontrunner in the Tory leadership contest (PA)

Having suggested that French president Emmanuel Macron may be a “foe” of Britain, the foreign secretary and likely next prime minister, Liz Truss, has decided to add injury to insult with a threat to invoke the notorious Article 16 of the Northern Ireland protocol. The protocol, it’s worth repeating, forms part of a legally binding treaty between the UK and the European Union, and Britain’s refusal to honour its provisions on trade checks has already promoted legal action by the EU.

The UK has further destabilised the situation by unilaterally drafting legislation that will negate almost the entire protocol, with a Westminster-approved system of border controls to be imposed (or not) on an unwilling EU.

Just for a change, the possibility that Truss may formally trigger Article 16, which allows for a unilateral suspension of controls in severe circumstances, is one of her better ideas. Or at least, it is not as bad as the UK purposefully ignoring the arbitration mechanism contained in the NI protocol. Boris Johnson, as ever, seemed to be gambling that a show of force strong enough, and a change in the “facts on the ground”, would short-circuit the tiresome joint committees and ponderous deliberations of European judges. Such political action as the new Northern Ireland Protocol Bill and a restoration of the Northern Ireland executive, with participation of the Democratic Unionist Party (DUP), would, it was hoped, force the EU to accept the status quo.

There were at least two major problems with Johnson’s last big gamble. First, even though the DUP’s leader Jeffrey Donaldson and his party would walk through one door to rejoin the power-sharing arrangements, there was every chance that Michelle O’Neill and her party, Sinn Fein, would walk out of the other door and launch their own boycott. So the principal benefit of abolishing the protocol would not be achieved.

Second, the actions of the Johnson government have been so blatant in its choices that the UK would almost certainly be in breach of its obligations. In such circumstances (and possibly before that) the EU would be justified in imposing proportionate trade sanctions. In other words, the UK would be involved in a trade war with its largest export market, just as it drifts into recession.

Even for the bellicose Ms Truss, this would be too much. She has until 15 September to respond to the EU’s legal claim, and the EU wants a proper legal response, not a speech about standing up for Britain. Launching Article 16 would be a tactically smart move, and one that would forestall any trade retaliation from Brussels. She could legally try to make a case that the protocol is indeed causing “serious economic, societal or environmental difficulties that are liable to persist”, or a “diversion of trade”. Recent imposition of tariffs on UK steel entering Northern Ireland presents an interesting case study. Eurosceptic MPs in the European Research Group and the DUP have long called for the British government to trigger Article 16, so they can hardly complain when the new premier does precisely that.

Hence her decision, no doubt under strong legal advice, to exhaust the existing treaty procedures before contemplating anything more drastic. This will buy Truss some valuable time while she tries to deal with the energy price rise, the cost of living crisis and the war in Ukraine. A trade war with the EU and a return to violence in Northern Ireland would be too much for even a competent government at the peak of its powers and popularity to deal with on top of everything else. Truss may just be showing some signs of pragmatic caution, notwithstanding her senseless goading of President Macron. But it would still be merely kicking the can down the road. Again.