By John Chalmers
BRUSSELS (Reuters) - An intractable dispute over the rules governing post-Brexit trading arrangements for Northern Ireland will be the biggest irritant in relations with the European Union that Britain's new prime minister will face on taking office next week.
Liz Truss, favourite to succeed Boris Johnson, has already said she will press ahead with legislation that would effectively tear up parts of the divorce deal struck at the end of 2020 between the EU and Britain, a step that could lead to a trade war.
The stand-off over the Northern Ireland Protocol is by far the biggest of several issues straining relations between the 27-member EU and Britain, which became the first country to leave the bloc on January 31, 2020. The following explains the background to the issue and where it might be headed.
NORTHERN IRELAND PROTOCOL
As part of Britain's departure from the EU, Johnson's government agreed to effectively leave Northern Ireland within the EU's single market for goods and customs union, preserving its open border with EU member Ireland.
That created a customs border in the sea between the rest of the United Kingdom and the province, something that pro-British communities in Northern Ireland say erodes their place within the UK.
London says the bureaucracy created by the so-called Northern Ireland Protocol has brought trade disruption and diversion, extra costs for traders and businesses, and reduced the availability of goods for consumers in the province. It says the protocol is also a threat to the 1998 peace accord that mostly ended three decades of sectarian violence there.
BILL TO SCRAP THE PROTOCOL
A bill to unilaterally scrap some customs checks to ease the movement of goods is working its way through the British parliament, and Truss said last month that if picked as prime minister she would seek to deliver that legislation in full.
Her rival in the leadership contest, Rishi Sunak, has said he would "push on" with the legislation while still trying to negotiate with the EU.
The EU maintains that the protocol is a legally binding treaty freely entered into by London. Its executive, the European Commission, has launched a series of legal proceedings against Britain for breaches of the agreement.
A regular poll of voters in Northern Ireland conducted by Queen's University Belfast found in June that 74% of respondents would prefer the two sides reach an agreement on simplifying the protocol than the UK take unilateral action.
London has until Sept. 15 to respond to the EU action, just 10 days after Truss - assuming she wins the ruling Conservative Party's leadership contest - becomes prime minister.
MORE TENSION LOOMING
The Financial Times reported on Aug. 25 that Truss is considering plans to trigger "Article 16" emergency measures within days of taking office to buy time while the bill goes through parliament. Article 16 allows either side to take unilateral action if it deems the post-Brexit agreement is having a strongly negative impact on their interests.
Such a move would ramp up tensions with Brussels, and could ultimately lead to a trade war, with the EU possibly suspending parts of the trade deal that removed tariffs and quotas for goods.
This would require a 12-month notice period, though non-tariff measures such as more stringent checks of goods arriving from Britain into the EU could be applied immediately.
RESEARCH PROGRAMMES ROW
In what was widely seen as a tit-for-tat move, Britain last month launched dispute resolution proceedings against Brussels to gain access to the EU scientific programmes.
Under the divorce deal, Britain was granted future access to Horizon, which offers grants and project to researchers, the Copernicus earth observation programme on climate change, and the Euratom nuclear research programme. Britain says the EU has still not finalised access.
(Additional reporting by Padraic Halpin in Dublin; Editing by Frances Kerry)