E.U. Brings Suit Against U.K. on Eve of Crucial Trade Talks

LONDON — A decision by the European Commission on Thursday to press ahead with legal action against Britain over its plans to override parts of an agreement on withdrawal from the bloc raises the stakes at a critical moment in talks that will determine whether the two sides can avert an economically ruinous rupture.

The commission’s decision was not a surprise. It gave Britain an ultimatum last month, threatening to take it to court unless it dropped its plans to backtrack on a deal Prime Minister Boris Johnson struck last year.

But the decision roiled the waters on the eve of a crucial meeting between the two sides scheduled for Friday at which they were supposed to decide whether to intensify negotiations over a trade deal that needs to be largely in place by a mid-October deadline set by Mr. Johnson.

Little European Union business gets done until the last minute, however, and analysts said that timetable was likely to slip. Nonetheless, negotiators are running up against a harder deadline in early November, the minimum time needed for ratification of any agreement by the European and British Parliaments by the end of the year.

“This cannot be good news,” said David Henig, director of the U.K. Trade Policy Project at the European Center for International Political Economy, a research institute, who added that the decision over legal action illustrated the tensions between the two sides. “There is an awful lot to be done in two to four weeks to get a trade deal done.”

Britain formally quit the European Union on Jan. 31 but is subject to its economic rules until the end of this year. Even with a trade agreement, some disruption is certain after that date as new checks on freight are implemented at busy cross-Channel ports. But without a deal the economic damage would be significantly worse, especially for Britain.

At the heart of the legal case launched on Thursday are parts of the withdrawal agreement designed to prevent the creation of a “hard border” between Northern Ireland, which is part of the United Kingdom, and Ireland, which will remain in the European Union. There are currently no border controls between the two, allowing for the free movement of goods and people.

Sections of a proposed law being considered by the British Parliament, known as the United Kingdom internal market bill, would override that withdrawal agreement by allowing British ministers to take key decisions on Northern Irish trade unilaterally, rather than through a process involving Brussels.

Britain, which has acknowledged that its plans would violate international law, has 30 days to respond, and any legal action could take months to unfold. On Thursday, the British government said it would respond later to the move from Brussels. “We have clearly set out our reasons for introducing the measures,” it said in a statement.

The British internal market legislation at issue has been approved by the House of Commons but still needs the consent of the House of Lords, the unelected second chamber of Britain’s Parliament, and could still be changed.

Critically, the dispute has not so far derailed the talks on a trade agreement between Britain and the European Union. If those are successful, they could resolve many of the points at the center of the legal action and pave the way for a compromise.

Talks between Michel Barnier, the European Union’s main negotiator, and his British counterpart, David Frost, are scheduled to take place on Friday. If the two sides decide that sufficient progress has been made they could enter a new, intensive, phase of negotiations that is conducted confidentially.

Though Britain’s threat to renege on its international commitments has heightened tensions and diminished trust between the two sides, there is still a stated desire in Brussels and London to reach a trade agreement.

The Dutch prime minister, Mark Rutte, played down the significance of the European Commission’s legal action, hinting that everything remained in play.

“Don’t look for too much behind this,” Mr. Rutte told reporters in Brussels, where a summit meeting of European Union leaders was underway. “It is normal procedure, more administrative than political.”

European officials have repeatedly said that they will not break off negotiations, and that their objective is to defend the integrity of the single market, to ensure a level playing field for trade with Britain and prevent having a physical border on the island of Ireland.

On Thursday the British government said it remained committed to working constructively to reach a trade agreement with the European Union. Britain said that it would be possible for informal talks to continue next week, but that next steps would be outlined on Friday.

Though there has been more optimism recently, some analysts believe that Mr. Johnson has yet to focus on the concessions he needs to make to secure a breakthrough.

“We can all see what a deal looks like but we can’t be sure how we get there and whether the U.K. is really on for it,” said Mr. Henig.

Stephen Castle reported from London, and Steven Erlanger from Brussels.

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