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Brussels hits back at UK over move on US tariffs

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Brussels has challenged the UK’s claim that it still has the right to hit US goods with tariffs should a dispute over aircraft subsidies persist, saying Britain will lose the power when the UK leaves the EU on January 1.

Britain will have no right to share in the EU retaliatory action authorised this year by the World Trade Organization against the US because of illegal subsidies for Chicago-based aerospace company Boeing, said the European Commission.

“The sole claimant in the Boeing case is the EU and it is the EU that is authorised to impose the counter measures as approved by the dispute settlement body,” added a commission spokesperson.

Brussels was reacting to an announcement on Tuesday by UK trade secretary Liz Truss that Britain was setting “an independent approach” to the long-running EU-US trade dispute over illegal subsidies to Boeing and Toulouse-based aerospace company Airbus.

Ms Truss said the UK would no longer be imposing any tariffs in the US case relating to Boeing from January 1 — but would reserve the right to do so in the future.

The EU last month slapped duties on $4bn worth of US imports including aircraft, in retaliation for injury caused by illegal subsidies to Boeing. The move came after the US imposed duties on $7.5bn of imports from the EU, including Airbus aircraft and Scotch whisky. 

The UK’s move to break ranks with the EU angered the aerospace industry, which provides more than 100,000 jobs in the UK.

Airbus, one of the biggest UK employers in the civil aerospace sector, would no longer be able to trust the British government, said one industry executive.

“There was no consultation with industry on this,” added the executive. “This will not benefit Airbus. There will be only one beneficiary — Boeing, who will be delivering aircraft to IAG [owner of British Airways].”

Emily Thornberry, trade spokesperson for the opposition Labour party, said Ms Truss was “unilaterally withdrawing” from a dispute caused in part by unlawful US subsidies that were continuing to harm Airbus.

“It is not remotely clear what we as a country are getting in return,” she added. 

One British government official admitted there had been no promise of reciprocity on tariffs from Robert Lighthizer, US trade representative, in response to the UK move.

But the official said the UK could have proceeded with tariffs on the US without any authorisation from the EU.

“There is no precedent for this,” he added. “It’s a complex issue but we are really clear that the UK is able to impose a share of the Boeing retaliatory rights that are allowed under the WTO.”

A spokesperson for the UK department for international trade said: “We are clear that the UK is entitled to impose a share of Boeing retaliatory rights in a way that is compliant with our rights and obligations under the WTO.

“UK industry has been harmed by the US subsidies . . . and we will not hesitate to reimpose tariffs if necessary to protect UK businesses and jobs.”

One trade expert said Brexit was unprecedented and the legal rules surrounding Britain’s WTO rights in this situation were unclear, given that the EU case against Boeing was brought by the bloc and not by member states. 

The EU’s position was backed by a leading trade lawyer based in Geneva, location of the WTO headquarters. “The complainant [in the Boeing case] was unquestionably the EU so in principle the EU retains the right to retaliation, not the UK,” said the lawyer, who declined to be identified.

Meanwhile, signs exist that the EU and US are keen to reach a settlement in the Airbus-Boeing dispute. EU officials said the two sides were engaged in intensive negotiations to bring it to an end as quickly as possible.

The European Commission spokesperson said the EU was “ready to withdraw” all of its punitive tariffs related to the case “provided the same steps are taken by the US”. 



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UK ends damaging post-Brexit clash over status of EU envoy

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UK foreign secretary Dominic Raab has finally ended a corrosive diplomatic dispute over the status of the EU’s ambassador in London, a stand-off that had added to post-Brexit tensions.

Raab had previously refused to grant João Vale de Almeida full diplomatic status after Brexit took effect on January 1, arguing the EU was an “international organisation” not a state.

Brussels retaliated by shutting Britain’s head of mission to the EU, Lindsay Croisdale-Appleby, out of key meetings with EU officials, adding to Brexit tensions on trade and Northern Ireland.

But on Wednesday the issue was settled after a meeting between Raab and Josep Borrell, the bloc’s foreign policy chief.

Officials briefed on the deal said Vale de Almeida would now receive the same diplomatic recognition as his counterparts in EU missions in all other world capitals, including Washington and Beijing.

In a joint statement, issued at a G7 meeting in London, Raab and Borrell said they had reached an agreement based on “goodwill and pragmatism” on an establishment agreement for the EU delegation to the UK.

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While Vale de Almeida will enjoy full ambassadorial status, British officials said Raab had secured a deal “which gives us some of what we want” regarding the legal situation of EU staff in London.

EU officials will enjoy a largely similar status to other diplomats but with some downgrades: notably, under the agreement, they will not have immunity from prosecution for road traffic accidents.

Raab insisted on this carve-out following the death of Harry Dunn, a British motorcyclist killed in 2019 in a collision with a vehicle driven by Anne Sacoolas, the wife of a US diplomat. She returned to the US claiming diplomatic immunity. 

But many British diplomats were dismayed at how long it had taken to resolve the dispute. “It was a stupid thing to do in the first place and we’ve had to back down,” said one former ambassador.

The diplomatic rapprochement was hailed in Brussels as a sign of a “new cycle” in UK-EU relations following the European parliament’s formal ratification last month of the trade deal between the two sides, which took effect on January 1.

There has also been a thawing in relations over the management of tensions in Northern Ireland, as London and Brussels look for ways to soften border checks on goods coming from the British mainland to the region.

Vale de Almeida will now get to present his diplomatic credentials to the Queen — an honour not available to the heads of international missions.

Boris Johnson has never recognised the EU as equivalent in status to a national government but Number 10 insiders insisted that the Foreign Office — not the prime minister — was responsible for the diplomatic dispute.

Meanwhile, Ireland and the UK announced plans for the first meeting in two years of the British-Irish Intergovernmental Conference, a structure created under the 1998 Good Friday Agreement for the two countries to liaise on issues around Northern Ireland. 

“We are aware that there are sincerely held concerns in different communities in Northern Ireland in relation to a number of issues and firmly agree that the best way forward is through dialogue and engagement,” said Northern Ireland secretary Brandon Lewis and Ireland’s foreign affairs minister Simon Coveney in a joint statement after they met in Dublin on Wednesday afternoon.

The meeting will take place in June, ahead of the July marching season in Northern Ireland, which could inflame tensions between unionists — who feel that their region’s status in the UK is under threat from post-Brexit trading arrangements — and nationalists, who are pushing for a vote on a united Ireland. 

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France threatens to cut power to Jersey as fishing tensions rise

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France has threatened to cut off its power supply to Jersey in the Channel Islands, as tensions rise with the UK over the post-Brexit fishing regime.

Following the UK’s full departure from the bloc in January, French fishermen have expressed concerns at difficulties in receiving the necessary licences to fish in British waters.

The dispute also comes at a time when UK and EU negotiators are in discussions over the 2021 catch quota for shared fishing stocks.

Jersey, the largest channel island and a British crown dependency, receives 95 per cent of its electricity from France through underwater cables. Its foreign policy is governed by the UK, which means it is treated as a third country by the EU.

Annick Girardin, the French maritime minister, told France’s National Assembly she was “revolted” that Jersey had granted 41 fishing licences that included conditions and specific criteria that were “decided unilaterally and without explanation”.

“It’s unacceptable,” she told lawmakers. “We’re ready to resort to retaliatory measures . . . concerning Jersey, I’ll remind you of the transport of electricity via submarine cables.” Girardin added she would “regret” any action but “we’ll do it if we have to”.

French fishermen and ministers have been complaining for two weeks about the difficulty of gaining access to British waters despite the agreement on fisheries reached at the end of last year.

The anger among French fishermen at the delays in receiving licences for fishing in UK has prompted barricades for lorries arriving in Europe with UK-landed fish.

Clement Beaune, France’s junior minister for European Affairs, last week threatened to block regulations that would allow UK financial firms to do business in the EU if Britain does not respect its Brexit commitments on fishing.

Bertrand Sorre, an MP for President Emmanuel Macron’s governing La République en Marche party, gave the example of a fisherman from Granville in Normandy who had previously fished for scallops and whelks for an average of 40 days a year off Jersey; he had been told he could fish for only 11 days this year, and only for scallops.

Ian Gorst, Jersey’s external relations minister, said it had issued the licences in accordance with the UK’s trade and co-operation agreement with the EU and the new regime would “take time for all to adjust”.

“If French fishermen or the authorities have further evidence they would like to submit, we will update the licences to reflect that evidence,” he said in a statement.

The UK’s Department for Environment, Food and Rural Affairs said: “We are clear that Jersey is responsible for its own territorial waters.”

UK business minister Nadhim Zahawi urged both sides to “iron out” issues with fishing. “We’ve got to look at this urgently and the best way to fix this is to work together,” he told Sky News.

A senior UK official said the government had been taken aback by the strength of the French reaction, which was seen as an “aggressive escalation” given that the UK had been working together on the question of licensing. “It’s a strange way to behave, from what is meant to be a friendly country,” they added.



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Hello, Berlin? Germany’s future raises foreign policy concerns for allies

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The writer is Fritz Stern chair at the Brookings Institution

President Joe Biden has made it clear that he really, really wants to work with Europe. After the four traumatic years of the Trump presidency, that seems an opportunity not to be missed. Also, Moscow and Beijing are undeterred by US and EU sanctions over the jailing of Russian dissident Alexei Navalny and the mistreatment of Uyghurs in China.

They are dialling up the pressure on Europe with countersanctions, expulsions of diplomats and thuggish-sounding threats. But in Brussels, EU Commission president Ursula von der Leyen is fighting with European Council president Charles Michel over charges of sexism and a Turkish sofa, instead of getting a grip on a double-dip recession and the pandemic.

British premier Boris Johnson is in trouble over costly wallpaper. French president Emmanuel Macron, up for re-election in 2022, is neck-and-neck in the polls with his far-right rival Marine Le Pen, while retired and current military officers are warning of civil war.

This would seem to be the moment for Germany, as a responsible neighbour, to step up and help out. But Europe’s most powerful economy is going to the polls even sooner than France: on September 26. As the 16-year tenure of Chancellor Angela Merkel comes to a close, the six parties scrambling to rule in the post-Merkel era are somewhat less than focused on goings-on beyond Germany’s borders.

The reason is the fragmentation of Germany’s colour-coded party landscape. In current polling, the Greens are fighting for first place with the CDU (black) at about 25 per cent, with the Social Democrats (red) far behind at 15 per cent, followed by the liberal Free Democrats (yellow) and the Left party (dark red) at around 11 per cent each.

The far-right Alternative for Germany is so radical that Germany’s domestic intelligence service wants to place it under observation. No other party will work with it, but it still captures about a tenth of the vote. This increases the likelihood that Germany’s next government will be a three-way coalition, with a kaleidoscope of possible combinations: black-green (or the reverse, with the CDU as junior partner); “Jamaica” (CDU-Greens-liberals); “traffic light” (Greens-SPD-liberals); and finally, “R2G” (SPD-Left-Greens).

This is why the small parties’ ideas suddenly matter. But in terms of foreign and security policy, none of the five presents a fully reassuring image to a neighbour or ally of Germany.

The Left party’s only path to government is R2G, a goal the powerful leftwings in the Greens and the SPD have been actively pursuing. But the Left too has radicalised, shedding its once influential east German pragmatists. Its new top duo opposes military engagement abroad of any kind. But it is also apparently clueless about pensions, and that may alienate its base.

The FDP has cabinet-ready experts on finance, digital issues and foreign and security policy — and a liability in Christian Lindner, their leader. The CDU and Greens are still smarting because of his petulant walkout from coalition negotiations in 2017. Last year, he faced a revolt in his own party after supporting the decision of a regional liberal politician to let himself be elected state governor with the AfD’s help.

The SPD’s Olaf Scholz is caught in a double bind. As Merkel’s finance minister, the opposition accuses him of oversight failures in a spate of financial scandals. As candidate for chancellor, he has seen the SPD leadership wrench the party to the left with anti-nuclear slogans reminiscent of the 1980s. Fritz Felgentreu, one of several seasoned legislators to resign in protest, calls his party’s security policy a “smouldering fire”.

Armin Laschet, the CDU candidate, has come under fire for sounding soft on Syria, Russia and China. Yet his real problems are corruption scandals and circling party frenemies. His party may be dealt another blow in next month’s state elections in Saxony-Anhalt, where some polls have the AfD in close pursuit.

All this does much to explain the rise of the Greens and Annalena Baerbock, their laser-focused candidate. Her criticism of China, the Kremlin and the Nord Stream 2 pipeline project is music to Washington’s ears. Yet the party’s feisty base has had ferocious fights over defence spending and nuclear deterrence. Its reliability as a partner is by no means guaranteed.

Of course, elections are generally not fought, or won, on foreign policy. But German voters would do well to remember that their country’s wealth and power depends on the stability and security of its neighbourhood. Maybe it is time to pay attention, and get a little worried. Its neighbours and allies already are.



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