U.K. Backs Down on Threat to Break Brexit Divorce Agreement

(Bloomberg) -- Boris Johnson is prepared to back down on his threat to break international law by unilaterally ripping up parts of the Brexit divorce deal he signed with the European Union, the government announced Monday.

The plan to retreat on the U.K. Internal Market Bill, first reported by Bloomberg in October, is another sign that the prime minister’s government is trying everything it can to smooth the path to a new post-Brexit trade agreement with the EU.

Talks in Brussels are at a critical stage with British officials warning there may only be hours left to save a deal. Both sides have said they are far apart on key issues, including fisheries and fair competition rules, and the negotiations could fail.

One of the issues that soured talks earlier in the year was the government’s decision to draft new legislation that would override parts of the Withdrawal Agreement Johnson struck with the EU.

Ministers said the clauses -- in the Internal Market Bill -- were intended as a safety net to prevent a customs border going up between Northern Ireland and mainland Britain if no agreement could be reached on the issue.

The EU threatened legal action against the U.K., saying the legislation would breach the Brexit agreement. But officials have been negotiating in the months since, and on Monday the government confirmed it would be willing to drop the contentious clauses from the legislation if they were no longer needed.

Cabinet Office Minister Michael Gove is holding talks with the EU in Brussels to review the implementation of the Withdrawal Agreement. “Discussions continue to progress and final decisions are expected in the coming days,” the government said in a statement. Ministers would be willing to scrap the contentious clauses “if the solutions being considered in those discussions are agreed,” according to the statement.

The Internal Market Bill would give U.K. ministers powers to determine what goods entering Northern Ireland are at risk of being moved in to the EU and therefore could be subject to tariffs.

The U.K. insists the law will protect its own internal market but has accepted that the clauses do break international law.

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