Thread by @pmdfoster

🚨🚨🇬🇧🇪🇺🇬🇧🇪🇺🇬🇧 🚨🚨EXC Johnson’s post-Brexit trade policy faces first High Court test via @FT - one for #brexit and trade wonks, but fascinating and a case that will be widely watched per ⁦@AlexanderPHRose⁩ —
Stay with me/1 on.ft.com/2UkXnhZ

@FT @AlexanderPHRose So first the case. It stems from a decision last December by @trussliz to unilaterally allow 260,000 tonnes of "raw cane sugar" to enter the UK tariff-free, for one year. So far, so simple /2

gov.uk/government/con…

@FT @AlexanderPHRose @trussliz But British Sugar Plc @BritishSugar has gone to court to argue that this 'autonomous' quota is a de facto subsidy to their US-owned rival Tate & Lyle Sugars @TateLyleSugars because T&L is the ONLY company in UK that refines *cane* sugar -- BS uses homegrown sugar beet/3

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars So British Sugar has gone to court and been granted permission to get a judicial review of @trussliz decision -- arguing that it is an effective state aid, potentially distortionary to EU-UK trade and contrary to the 'state aid' clauses of the NI- protocol /4

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars Quick recap at this point that Art 10 of the NI Protocol said that an *UK* subsidy decision that impacted on goods traded to NI should be notified to European Commission for approval (hence Brexiters saying was gross infringement on UK sovereignty) /5

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars Why does this matter? Well, it's the first legal test a) of the 'reach' of Article 10 and b) of just how 'independent' the UK's independent trade policy is, and the extent to which the TCA and NIP must be referenced in that policy/6

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars In its submission British Sugar argues that the sugar ATQ is effective subsidy since Tate & Lyle has the only refinery for cane sugar, and since the ATQ only lasted a year, it is disingenuous to suggest (as Govt did) that it was open for everyone to invest in/7

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars BS then argues that the effect of his 'subsidy' is to undercut EU producers who export 500k tonnes to UK each year which also impacts products that go into NI -- hence their attempt to drag Article 10 NIP into this/8

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars For it's part Tate & Lyle say this is rubbish -- the ATQ is not a subsidy, there is no trade in raw cane sugar between NI-EU or EU-GB, so the TCA and the Protocol are just not in scope here /9

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars The Government is scathing about the BS case, saying
a) the ATQ isn't a subsidy

b) and if it were, then the UK Gov would find itself having to notify the EU Commission of every tweak to UK global tariff schedule

c) clearly was not intention of A10 NIP to capture this /10

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars The legal experts like @AlexanderPHRose @jamesrwebber (and copying @GeorgePeretzQC here) seem pretty sceptical that British Sugar can with his argument -- and indeed the judge, in granting leave for judicial review, seems to agree, noting "formidable obstacles" facing BS /11

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars @jamesrwebber @GeorgePeretzQC BUT the judge also notes that UK gov failed to land "knock out blow" in citing NIP text AND points out that UK govt argument on notifying all tariff changes is a bit of a straw man, because BS argument is on this very "selective" ATQ it says amounts to a subsidy /12

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars @jamesrwebber @GeorgePeretzQC The other dimension to this is the no-love-lost rivalry between British Sugar and Tate & Lyle Sugars --

Gerald Mason, senior VP says BS case is "pure opportunism" while Paul Kenward @kenward_paul says govt has handed T&L a £12m "windfall" /13

@FT @AlexanderPHRose @trussliz @BritishSugar @TateLyleSugars @jamesrwebber @GeorgePeretzQC @kenward_paul On the face of it, this looks like an uphill battle for British Sugar....but if nothing else the case, when it is heard, will start to clarify whether a narrow tariff change can amount to a subsidy and the reach of Article 10, which will probably be to everyone's benefit. ENDS