In Brexit poker, UK says it could break law in ‘limited way’

Britain headed into a fresh round of Brexit trade talks on Tuesday acknowledging it could break international law but only in “a limited way” after reports it may undercut its divorce treaty with the European Union.

As the pound fell on fears of a no-deal exit, the government's legal department head quit because he felt a plan to overwrite parts of the Withdrawal Agreement treaty signed in January was wrong.

Britain left the EU on Jan. 31 but talks on new trade terms have made little headway as the clock ticks down to an October deadline and then the end of the statusquo transition arrangement in late December.

As diplomats gauged whether Johnson was blustering or serious about allowing a tumultuous finale to the four-year saga, Britain insisted it would abide by the treaty.

Asked if anything in the proposed legislation potentially breached international legal obligations or arrangements, Northern Ireland minister Brandon Lewis said: "Yes, this does break international law in a very specific and limited way." "We are taking the powers to disapply the EU law concept of direct effect required by article 4 in a certain, very tightly defined circumstance," he told parliament. He added that the government supported the Northern Ireland protocol of the Withdrawal Agreement.

Meanwhile, a spokesman for Prime Minister Boris Johnson said on Tuesday that Britain will not become a “high-subsidy regime” after a status quo transition concludes with the European Union at the end of this year.

"We are very clear ... that we are not going to become a high-subsidy regime at the end of the transition period and we'll be setting out more details ... in due course," the spokesman told reporters, adding the outstanding issue on state aid was to find agreement on dispute resolution.

He also reiterated the government's position that it would implement the divorce agreement with the EU, despite wanting to make clarifications to the text to make sure Northern Ireland was treated as being in the UK'S customs territory.