Search ForexCrunch

In a statement published on Thursday, the UK government said that it will ask parliament to use powers in the Internal Market Bill if the European Union engages in a material breach of its duties of good faith or other obligations.

“Examples of that would be an insistence that Great Britain (GB)-Northern Ireland tariffs and related provision such as import VAT should be charged in ways that are not related to the real risk of goods entering the EU single market,” the government explained.

Additional takeaways

“Would ask parliament to use powers if the EU insists on paperwork for Northern Ireland goods going to Great Britain.”

“Would also ask to use powers if the EU insists their state aid provisions should apply to GB in cases with no or trivial link to Norther Ireland.”

“Would ask to use powers if the EU refuses to grant 3rd country listing to UK agricultural goods for manifestly unreasonable or poorly justified reasons.”

“Would also in these circumstances activate formal dispute resolution mechanism.”

Market reaction

The GBP/USD pair, which fell sharply on the Bank of England’s Monetary Policy Summary, largely ignored this statement and was last seen losing 0.65% on a daily basis at 1.2880.