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Risk of EU-UK trade disruption remains strong

Thursday, July 1, 2021

Significance

The agreement will temporarily cool tensions between the United Kingdom and the EU over the implementation of the Northern Ireland Protocol (NIP). However, underlying problems remain unaddressed and the possibility of targeted retaliatory action by the EU remains significant.

Impacts

  • The unionist marching season in July and August threatens to inflame social and political tensions over the NIP in Northern Ireland.
  • Early elections in Northern Ireland would essentially be a referendum on the NIP, and would threaten to damage EU-UK relations further.
  • London may consider an EU-UK veterinary deal if it is temporary and the United Kingdom can withdraw if its ability to sign FTAs is harmed.

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