BRIEXIT, Article 16 Warn GBP Traders

The start of the current week came with renewed fears of a Brexit showdown as the United Kingdom has threatened to trigger emergency unilateral provisions in the Brexit divorce deal widely known as Article 16.

Article 16 is a clause in the Protocol on Ireland/Northern Ireland, a key part of the Withdrawal Agreement. The Article was sought to avoid a hard border between British-ruled Northern Ireland and E. U. member Ireland by introducing some checks on the movement of goods to Northern Ireland from mainland Britain.

The Financial Times recently reported that ”UK ministers also argue that the unionist community has lost confidence in the protocol and its continued application could destabilize the already fragile politics of the region.

Brussels argues that without full legal controls on animal and plant products, Ireland’s place in the EU single market is undermined because its goods can no longer be trusted, so may require checks as they enter the EU. The UK would therefore be threatening Ireland’s economic rights as an EU member. This may be seen as intolerable by the 26 other bloc’s member states. For its part, the UK says this concern is overstated.