UK businesses and exporters have urged Lord David Frost to scrap No 10’s abrasive approach to dealing with Brussels and seek to build a more mutually beneficial trade relationship.
Trade groups warned a breakdown in trade would inflict long-lasting damage on the UK economy.
James Withers, chief executive of the industry group Scotland Food and Drink, which represents exporters like Scottish salmon farmers, said “the ball had been dropped diplomatically” by both sides.
“If the first few weeks of any relationship set the tone, there is a lot of worry about. It feels like we are already at a major crossroads. We have a relationship choice, either collaboration or disintegration. We need the diplomatic temperature to be dialled down,” he said.
Tensions between the trade partners rose last week when the UK government unilaterally extended the grace period for implementing new arrangements on trade. The EU has threatened legal actions in retaliation.
Under the terms of the Northern Ireland protocol, the region is required to follow EU customs rules while remaining a member of the UK. In a bid to avoid a land border on the island of Ireland, a trade barrier was erected in the Irish Sea to ensure all goods flowing from Great Britain into Northern Ireland complied with the bloc’s rules.
Having already irritated the EU with his move on Northern Ireland, Frost – the cabinet minister for EU relations – followed up with an article in the Sunday Telegraph in which he urged the bloc to “stop sulking” and to “shake off any remaining ill will towards us for leaving, and instead build a friendly relationship between sovereign equals”.
One senior Tory told the FT that Johnson replaced Michael Gove with Frost to take charge of EU relations “because the prime minister wants a row with the EU”.
Frost’s allies say the minister did not intend to create an “aggressive” atmosphere in his first week in office and had only been following through with plans drawn up by Gove last month. They also say the EU’s decision to impose then quickly remove controls on vaccines going into Britain and a ban on live shellfish exports were bound to provoke a reaction from the UK government.
They also conceded that Frost implemented the new grace period without warning Brussels.
“We can’t accept that we are being taken for granted or being taken for idiots,” an EU diplomat said. “The opportunity here is that we can start a new cycle in our relationship and move on. The risk is we add insult to injury.”
The tough-talking on both sides has alarmed business.
Shane Brennan, the chief executive of the Cold Chain Federation that represents the perishable products industry, said Frost must work to ensure that trading businesses did not become “pawns” in a bigger political game stoking longstanding animosities with the EU.
“Adopting a ‘madman’ negotiating strategy might be great politics, but it’s terrible for food supply chains. The next few months are make or break for the food industry. A strong recovery from lockdown is vital and supply chain instability would shatter fragile confidence,” he said.