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THE UK’s ATTEMPT TO BACK OUT OF THE PROTOCOL IT AGREED

uk flag on creased paper

The UK government is unilaterally signalling its intent to ditch  the provisions of the Northern Ireland Protocol that are designed to protect the integrity of the EU Single Market. The integrity of the Single Market rests on their being a single set of rules, uniformly enforced and consistently applied, across the 27 EU States.  

Under the Protocol, goods produced in NI would enjoy full access to the Single Market without any checks at the EU border in Ireland or anywhere else. The Protocol also affirms that NI retains full access to the UK market. This is a win/win situation for .NI business.

The new UK legislation announced this week would instead create a control free zone in Ireland, which would radically weaken Irelands   position as a member of the EU. By doing away with the controls at the ports in NI , envisaged in in the Protocol , it would create a situation whereby good and foods, not meeting EU standards , could be brought into the EU market via Ireland.

We should not forget that the Withdrawal Agreement, of which the Protocol was a central part, was a key element in the winning Conservative Party General Election Manifesto of 2019.

Now the joint author of the Protocol, Boris Johnson , wants eviscerate it by means of unilateral UK legislation.

A unilateral breach of a Treaty by domestic legislation  on an internationally sensitive matter Is clearly a breach of international law.  

International commerce, in which the UK was once a major champion, rests on scrupulous respect for treaties and contracts.

“My word  is my bond” was once a watchword in British international dealings. No more, it seems.

The UK are now  claiming that an international Treaty can be breached on the basis of


“ necessity”.

This is a hard claim to justify in this case . 52 of the 90 members of Northern Ireland Assembly have indicated support for the Protocol, so there is no democratic “necessity“ to scrap the Protocol.

It is true that the DUP has said it will not sit in the NI Executive unless it’s seven demands for changes are met. These demands are vaguely phrased and symbolic  and do not provide a solid basis for legal resolution. It is not clear when or if the DUP would take up their seats in the NI Executive. So one  minority political party , in  small part of the UK , cannot be allowed to determine what is a “necessity” for a large and diverse state like the UK .

The fact that the UK government, Parliament, and electorate , all endorsed the Protocol as recently as 2019, with their eyes wide open, makes it very hard to plead “necessity” as a ground for undoing their own work.

An objective court would decide that they could and should have anticipated what would happen in their own jurisdiction.

The situation we are in today is a sign that debate within the ruling Tory party is taking place within a bubble , within which the needs of others outside the bubble are not heard.

Following the debate on the Protocol in Tory supporting press in Britain is like watching the reaction of the Republican base to the hearings about the invasion of the Capitol.  They hear what they want to hear , and nothing else.

One Brexiteer recently described the NI Protocol as “ a punishment the EU inflicted on the UK for Brexit”. This is despite the fact that in 2019, Boris Johnson, who negotiated the Protocol himself, claimed that ,in the Protocol , he had swiftly negotiated  what he called a “great new deal”!

He, unlike his predecessor, had got Brexit done, he boasted.

The  same Brexiteer writer said the Protocol was “an attempted power grab “ by the EU over the NI economy “on behalf of its allies in Dublin”.  The writer ignores the fact , under rules written while the UK was still an EU member, the Single Market of the EU has to have border controls, and these controls have to be more or less the same at all EU Borders.

Any precedent the EU might cede to the UK will be demanded by other non EU states with land borders with the EU.

The UK demands to be trusted when they say that nothing that fails to meet EU standards will cross the border into the EU .

They seem to have forgotten the long tradition of smuggling on and around the NI border , some of which which helped finance paramilitary activity in the past,  activity which costs thousand of IRish (and British) lives , and  could do so again.

Trust has to be earned, it cannot be commanded. If the EU cannot trust the UK government to keep its word, it will be even harder for it trust the private sector    “trusted traders” , the same government appoints to protect the EU from the smuggling of sub standard goods and foods across the border into the Republic.

What will happen now?

The EU has made clear the terms of the Agreed Protocol will not be changed. It has also made clear that without the Protocol there could have been no Withdrawal Agreement, and without that ,  there could have been no Trade and Cooperation Agreement(TCA)

Without the TCA, the Common External Tariff of the EU would have to be applied to British goods coming into Ireland and every other EU state. This would be deeply destructive , but it is the logical outcome , when one tries to unravel complex inter related  international agreements unilaterally. The whole thing comes apart.

As an EU member, Ireland would then have to apply the Common External Tariff on its own land and sea borders, a task of daunting proportions politically and practically. The effect on stability in NI  , and the sense of isolation of Northern nationalists , would be intense. The disruption of the food industry in The whole of Ireland would be disastrous.

One hopes that it will not come to that. But pretending that this could never happen is not wise.

The best approach for the EU will be to gradually turn up the heat on the UK so as to give them time to learn that actions have consequences , and the price could be very high. The European Commission has much experience in trade disputes and know how and where to target it’s actions. Meanwhile the political climate in the UK could change. The UK opposition parties need to assert themselves for the sake of the reputation of their country.

IS THE CAMERON/JOHNSON ERA COMING TO AN END?

Photographer: Arron Hoare

I hesitate to write about the internal politics of another country. But the inner struggles of the UK Conservative Party have had such a profoundly damaging impact on both parts of Ireland, that it is impossible to avoid the topic.

On the day that Boris Johnson faces a vote of confidence, I would like to reflect on a recently published book on the common background of David Cameron and Boris Johnson, and how it has shaped their approach to political leadership.

 Both of them attended Eton and Oxford, and were friends while there.

 Both were members of the aristocratically oriented Bullingdon club, a self styled elite within the university, who dined together in white tie and tail coats.

Cameron studied economics and politics and concentrated on getting his exams.

Johnson studied Classics and concentrated  on becoming President of the Oxford Union, a debating chamber which mimicked the superficial smart ass style of Prime Ministers questions (PMQs).

Clever one liners rather that searching questions are the order of the day at PMQs and in the Oxford Union. Entertainment rather than enlightened analysis is what works there.

Simon Kuper, a Financial Times journalist, has written

 “Chums,  How a tiny caste of Oxford Tories took over the UK”,

 which describes the group of 1980s Oxford undergraduates who have came to  dominate the top layer of UK politics in the 2014 to 2022 era.

Among this Oxford elite were David Cameron, Boris Johnson, George Osborne, Jeremy Hunt, Liz Truss, Teresa May,  William Hague, Rory Stewart, Dan  Hannan and Jacob Rees Mogg. As the author put it, the pre admission Oxford interview process

“tested your ability to speak while uninformed”.

Roy Jenkins, Chancellor of Oxford, said tht , as a result , Oxfors was often

“glib and flippant”

Keir Starmer also attended Oxford but as a post graduate student, which is not quite as formative (or deformative) an experience as that of an undergraduate. 

Allowing people, drawn from such a narrow elite, to dominate politics of any country is unhealthy in itself. Diversity at the top allows more options to be considered.

Oxford in the 1980’s also allowed a form of nostalgia for pre Industrial England to develop among the medieval spires of the university town, a nostalgia that underlay Brexit.

Living in the past enabled some of the Oxford undergraduates, who went on the become advocates of Brexit, to persuade themselves that it was still possible for Britain to make the global rules of trade policy , as it had been able to do from 1820 to 1880.

Boris Johnson successful career in the Eton debating society and the Oxford Union,  presaged his successful political career.  As Kuper puts it, he learned to

“defeat opponents whose arguments were better simply by ignoring their arguments “ .

Thus he could ignore the content of the Northern Ireland Protocol, which he probably never read, by confidently asserting that he was getting Brexit done. Treaties were just pieces of paper, details could be sorted out later.

 It also enabled him to  

“ to win debate not by boring the audience with detail, but with well times jokes, calculated lowerings of the voice and ad hominem jibes”.

This quality enabled him to get away with absurd claims during the 2016 Brexit Referendum.

Johnsons high verbal intelligence absolved him from ever developing his analytical intelligence.

Irish politics is far from perfect. But it does allow serious people to aspire to leadership. The UK might learn something useful from studying Dail Eireann!

REES MOGG APPOINTMENT COULD  MAKE PROTOCOL DIFFICULTIES MORE ACUTE

 Jacob Rees Mogg has been appointed as UK  Minister for Brexit Opportunities, with a mandate from Boris Johnson  to  change 1000 regulations, now in force , which the UK adopted as an EU member.  

This mandate, if acted upon, makes a settlement of the EU/UK dispute over the Protocol  next to impossible.

The more  EU inherited  UK regulations in respect of goods, which Minister Rees Mogg changes, the more will be the frequency and intrusiveness of checks on goods entering Northern Ireland from Britain.

 This because, under the Protocol Minister Rees Mogg and his colleagues signed , Northern Ireland will continue to apply  EU regulations for goods, including food products.  

 Any new and different UK rules , sponsored by Minister Rees Mogg, will not apply in Northern Ireland .  This will mean even more checks on British goods entering Northern Ireland to ensure that the goods comply with the EU rules. 

 New and different UK rules for goods, will also mean more things to check at British ports facing continental Europe, and more traffic jams on the roads approaching these ports.

Of course, this applies only to goods. In the case of services, the UK can make whatever rules it likes without any impact on customs checks at ports.

But as far as goods are concerned, it is almost as if the Rees Mogg appointment is designed to sabotage any possibility of his colleague Liz Truss finding an agreement with Vice President Sefcovic on a lightening the Protocol. 

 If he does the job he has been given , Mr Rees Mogg’s real title should  perhaps be “Minister for Extra Trade Barriers”.  Of course this applies only to goods. 

A recent UK paper  on the “Benefits of Brexit” suggested that scrapping EU rules could bring £1 billion worth of benefits to the UK economy. This seems like a figure plucked out of the sky.  There is no detail of what rules might be changed, even though the UK has been preparing for the suppose benefits of Brexit for the past six years.

 Indeed separate and different  UK rules might actually increase costs, because of the duplication involved.

But there are strong suspicions that the “benefits of Brexit”  paper is  just for show, and that Rees Mogg will not actually be able to diverge much from EU standards at all, because UK businesses will not want  to lose markets in the EU.. 

In a way, his appointment is an expression of the confused expectations about Brexit within the Conservative Party……members want a bonfire of EU rules.   But they also want to be able to have their exports accepted in the countries of the EU as being compliant with the very  EU rules they have just scrapped!

 Businesses which trade internationally know the importance of regulations for both goods and services, and may not be so keen on unilateral UK regulatory changes that put the UK out of line with its neighbours to whom they want to export.

Whether it is product safety, or the transfer of cross-border data, domestic regulations and international agreements are a crucial element in making access to markets easier, or  making  them more difficult. Having different rules is a way of keeping imports out and making consumers pay more. 

Under Prime Minister Theresa May there was some openness in the UK government to aligning with EU rules, particularly in the area of goods, in order to facilitate trade and resolve issues around  Northern Ireland .

The arrival of Boris Johnson as Prime Minister in July 2019 ended this openness.   His view was  that UK regulatory sovereignty is crucial, or at least must be made to appear to be so. 

Boris Johnson’s present political difficulties weaken his ability to reach compromises with the EU on the Protocol.

 His party is, in fact, a coalition between those who want more spending and those who want less spending, between those who want more protectionism and those who want less, and between those who want more regulation and those who want less. 

 Some problems have already arisen. The new UKCA conformity assessment mark to replace the EU’s CE mark, means greater internal regulatory inconsistency between Northern Ireland and the rest of the UK, and hence more bureaucracy at Northern Ireland ports.

 The more Rees Mogg does  his job, the more will be the differences between Northern Ireland standards and those in the rest of the UK.

Trade Agreements may be an added complication.

 For example there are suggestions that Canada will challenge the UK’s ban on hormone treated beef, as part of the accession process for the UK to the  new Pacific Trade Agreement. 

If this were to happen, it would mean extra controls on beef products from Britain coming into either part of Ireland. It would also place beef exports from either part of Ireland to Britain  at a competitive disadvantage vis a vis hormone treated beef imported from Canada. 

 But would British consumers want to eat hormone treated beef?

Whether the UK actually diverges all that much from its existing EU standards or not, the fact that the UK is SAYING now  it  intends to diverge a lot , means that the EU has to maintain tight customs controls of British goods .

  That means insisting that the Protocol is respected to the full in Northern Ireland ports,  and continuing delays on British good going to continental Europe

 So the Protocol row may go on and on, until the UK finally settles on what EU rules it wants to change, and what EU  rules it intends to keep. 

Given how slow progress on making these decisions has been in the six years since Brexit , the Protocol  dispute could drag on for years.

 This does not  augur well for stability in Northern Ireland,  or for Anglo Irish relations.

A NO DEAL BREXIT ON 1 MAY?

©AP Images/European Union-EP 

The risk that we will wake up on 1 May, to find we have a “No Deal “Brexit after all, has not disappeared.

The deadline for ratification by the European Parliament of the Trade and Cooperation Agreement (TCA) with the UK was to be 28 February 2021.But the European Parliament postponed the deadline to 30 April. It did this because it felt it could not trust the UK to implement the TCA properly and as agreed and ratified. 

This distrust arose because the implementation of the Ireland Protocol of the Withdrawal Agreement had been unilaterally changed by the UK.

If any party to an international agreement takes it upon itself unilaterally to alter the agreement, the whole basis of international agreements with that party disappears.

The matters in dispute between the UK and the EU( the Protocol and vaccines) remain unresolved.

The EU is taking the UK to court about the Protocol , but the court is not likely to decide anything before the new deadline of 30 April.

In the normal course of events, the Trade and Cooperation Agreement between the UK and the EU would be discussed in the relevant Committee of the European Parliament, before coming to the Plenary session of the Parliament for ratification.

The next meeting of the Parliament’s Committee on International Trade is due to take place on 14th and 15th April, and the agenda for the meeting has been published.

It includes a discussion on the enforcement of trade agreements, the General System of Preferences, and (significantly) trade related aspects of Covid 19.

It makes no mention at all  of the TCA with the UK!  

Trade related aspects of Covid 19 will inevitably include a discussion on vaccine protectionism, a highly contentious issue between the EU and the UK that has poisoned relations and led to bitter commentary in the media.

The fact that the Committee has not even included a discussion of  the TCA with the UK, on its agenda for what may well be the only meeting it will have before the 30  April deadline is potentially very significant.

The TCA runs to 2000 pages , and its contents, if ratified,  will take precedence over EU law.

To ratify such an agreement, without proper scrutiny in the relevant committees of Parliament, could be seen as a dereliction of Parliament’s responsibility of scrutiny. We should not forget the scrutiny that was applied to the much more modest EU Trade and Cooperation Agreement with Canada. The same goes for the deal with Mecosur.

Furthermore, the TCA would, if ratified, set up a network of committees to oversee its implementation. These will meet in private and their work will diminish the ongoing oversight by the European Parliament  of a host of issues affecting all 27 EU member states.

The TCA also contains a system of disputes resolution mechanisms that will quickly be overwhelmed by work.  The TCA has  many items of unfinished business, on which the European Parliament will want to express a view. It is hard to see how any of this can be done before 30 April!

The UK government of Boris Johnson has adopted a deliberately confrontational style in its negotiations with the EU.  The more rows there are, the happier is the support base which Boris Johnson is seeking to rally to his Conservative Party. Johnson’s European strategy has always been about electoral politics, not economic performance. This has led to almost complete mutual incomprehension between the UK government and EU.

If the European Parliament ratifies the TCA, without their  first having been seen to be a satisfactory outcome to the  EU/UK negotiations about the Ireland Protocol and about the exportation of vaccines, it will be a political setback for the Parliament and a source of  immense satisfaction for Boris Johnson.

One should never underestimate the role emotion can play in politics. The entire Brexit saga is a story of repeated triumphs of emotion over reason. And the European Parliament is not immune to this ailment.

Boris Johnson could be pushing his luck a bit far this time.

A NO DEAL OUTCOME IS STILL POSSIBLE

So the EU/UK talks are back on again, after all.

There seems to have been a change in the negotiating method, but the underlying reasons for the UK initiated suspension still remain. A No Deal outcome is still possible.

The UK Prime Minister said last Friday that the talks on a possible trade deal between the UK and the EU were over because the EU was not willing to offer the UK acceptable terms.

 He said that, since the outset of the negotiations, all the UK had ever wanted was the same terms the EU had agreed with Canada.

This was misleading.

The UK asked the EU for a full no tariff deal on all goods and services, whereas, under its deal, Canada still has to pay some tariffs , and has little access for services. 

Canada is an ocean away, whereas the UK has a land border with the EU. The EU and UK economies are so entangled that the UK, unencumbered by EU rules, would be much more of a threat to the integrity of the EU’s single market, than Canada, on the far side of the Atlantic, could ever be.

 That has been explained to the UK over and over again. 

Boris Johnson based his dramatic announcement on Friday on the fact that the European Summit had, on Thursday, dropped the adjective “intensified” in its reference to resumed  trade talks with the UK.  He followed this up by rudely telling Michel Barnier, the EU negotiator , not to come to London for planned talks on Monday.  The UK Minister, Michael Gove then   demanded what he called a “fundamental “  change in the EU’s stance.  

 This all seemed to come out of nowhere. 

There was nothing new in the conclusions of last week’s EU Summit as far as Brexit was concerned. The talks were progressing normally, and had narrowed the issues down substantially.  The European Summit had given the Commission its negotiating mandate on 25th February 2020, and there had been no suggestion of any fundamental change in it since .

 In fact, real progress has been made under that mandate. 

Even Boris Johnson himself admitted on Friday that 

“a lot of progress has already been made , by the way, on such issues as social, security, aviation and nuclear cooperation”.

He could have added that here has also been substantial progress on trade in goods, and some on services. An agreed approach to police cooperation, and to road haulage had  also been reached. The UK and EU positions had also come much closer on the overall governance of a future agreement, including on dispute settlement.

The stand off  about the Ireland Protocol has arisen because  the Joint Committee, set up to work out the implementation of the Protocol, had  not had enough meetings, and started far too late, mainly  because the UK side was not ready.  

So how do we explain Boris Johnson’s dramatic gesture?

 It is about negotiating tactics……and domestic politics.

The UK wants to settle everything else first and leave the most politically visible issue of all, fisheries, to the very end. 

Given that EU trawlers catch more fish in UK waters than vice versa, that sequence would put the EU side on the back foot. The EU prefers to deal with fisheries in conjunction with other open issues, and refuses to be rushed.

Fish is a politically sensitive national identity issue, and there is nothing Boris Johnson would like more than to be able to say that he has settled everything else, and is left defending Britain’s sovereign fishing grounds from rapacious foreigners.

 Standing up to Brussels unifies the Tory Party and distracts from the domestic difficulties about Covid 19.

But  It can also raise unrealistic expectations and lead to accidents.  

The actual cost of bringing about a No Deal Brexit, because of a disagreement over fisheries would be a hundred times greater than the value of the entire fishing industry. This is true for both sides. 

Tough talk now may also make it harder to sell any eventual deal in Westminster, unless it can be radically repackaged.

The UK never really worked out what it wanted to do with its new found freedom after Brexit. Different factions in the pro Leave coalition had different ambitions.

 Some wanted a less regulated economy, some a more regulated one.

Some wanted to government to leave business to do its own thing, others wanted the state to take the lead.

The argument about the EU’s demand for strict level playing field rules goes to the heart of these unresolved dilemmas.

If Boris Johnson gives specific commitments to the EU on the level playing field, he will have to disappoint one section or another of his pro Leave coalition. He will not want to do that.

So he may find it politically easier, in the short term, not to make a deal with the EU, and contrive a situation in which he can blame the EU for that disaster, and thereby avoid dividing his own party.  

Boris Johnson’s focus on a deadline around last week’s EU Summit was a mistake in terms of negotiating strategy. But it might make sense as part of a narrative the end point of which is blaming the EU for a No Deal outcome.

The EU Heads of Government continue to leave the negotiations of trade agreements to the European Commission.  This is to prevent attempts at divide and rule, and is one of the reasons the EU, notwithstanding its tiny budget and lack of military clout, has become a trade super power. Even though the UK was an EU member for 45 years it seems never to have learned that this was one of the reasons for the EU’s success as a trade negotiator.

 So,If the UK continues to insist on  a fundamental change in the EU approach to the negotiation, we are  heading for a No Deal Brexit on 1 January 2021.

This would have dire consequences for the Irish and British economies.  Irish farmers would be shut out of their traditional markets for beef and dairy products .  In this it would be like the Economic War of the 1930’s all over again. British consumers would face higher prices for almost everything, but especially for food. Protecting the EU Single Market in Ireland could become politically fraught.

Professor Tom Sampson of the LSE estimated that the economic cost to the UK of a No Deal would be three times as great as the costs to it of Covid 19. That is a lot.

The Covid effect will be short and sharp, with a quick recovery, whereas the cost of a No Deal Brexit would be slower to emerge, and be much larger, and much more long lasting. Some of this will happen even if there is a deal. But a No Deal will be worse because it will involve tariffs and bad blood..

It is not too difficult now to sketch out how one might  avoid a No Deal Brexit, if that is what the UK really wants.

The Level Playing Field issues on subsidies to industry, and  on differing environmental and food standards, can be settled by agreeing a fast track arbitration system between the EU and the UK. 

Relying on the WTO disputes mechanism is too cumbersome, as we have seen with the long running Boeing/Airbus saga. 

There will have to be an independent and robust system to prevent subsidized or sub standard goods entering the EU market across the Irish border. Trust will have to be built between EU and UK Customs officials. That may take several years.

Obviously there will have to be big changes in EU fishing rights in UK waters, now that the UK has left the EU. But these could be phased in over 15 or 20 years. In any event, the UK would not be able to consume all the fish it could catch in its own waters, and will need to export them to the EU. Free access to the EU market for British fish could be linked to fishing quotas for EU boats in British waters.

Of course, agreeing a Trade deal would not end all controversy.  And a No Deal would not end all negotiation.  Talk would restart after much damage had been done.

In any event, there will be lots of small disputes, not least over Customs checks in Belfast port. With goodwill and patience, these disputes can be settled .  

But , Deal or No Deal,  the EU and the UK will gradually draw further apart, as will Ireland and Britain.

 Irish people will need to pay much more attention to politics in Paris, Berlin and Warsaw, and a little less to the English speaking world. 

This will involve a major psychological reorientation, with profound implications for our educational system.

ALL TRADE RESTS ON RESPECT FOR TREATIES

The fact that the UK government is now saying it will pass legislation that will break an international Treaty it signed and ratified little over a year ago, is very serious. It undermines Britain’s aspiration to be a globally trading nation.

All trade between nations rests, ultimately, on respect for Treaties and contracts.

Deliberately breaching commitments, freely given in a Treaty, undermines the whole structure of global relations between states.

 If one cannot rely on a commitment in a Treaty, nothing is reliable.

The EU only continues to exist because its member states respect the Treaties that set it up ( as some seem to have forgotten in another context recently).

If the UK, by its breach of the Withdrawal Treaty commitments it gave  on checks on goods going from Britain to Northern Ireland, forces Ireland to introduce checks on the Irish land border,  in order to protect Ireland’s status as a fully complaint EU member, it will undermine the structure that has brought peace to these islands. 

We could be living with the consequences of this long after Boris Johnson has passed from the political scene.

BREXIT….HEADING FOR THE CLIFF EDGE

Last Friday Michel Barnier gave a stark warning about the lack of progress in the Brexit negotiation. 

But this week Boris Johnson has come back to work. 

Perhaps it was unrealistic for Michel Barnier to have expected the UK to  have engaged seriously with the trade offs and concessions, essential to a long term Agreement  , while the UK Prime Minister was ill.

Brexit is Boris’ big thing. He made it. Other Tory Ministers have no leeway to make Brexit decisions without his personal imprimatur. He has purged from his party of all significant figures who might advocate a different vision of  Brexit. 

The point of Michel Barnier’s intervention is that, now that Boris is back at work, he will need to  give a clear strategic lead to the UK negotiating team.  If he fails to do that, we will end up, on 1 January 2021, with No Deal and an incipient trade war between the UK and the EU.  Ireland  will be in the front line.

 The scars left by Covid 19 will eventually heal, but those left by a wilfully bad Brexit,  whether brought  about deliberately or by inattention, may never heal. 

This is because a bad Brexit will be a deliberate political act, whereas Covid 19 is just a reminder of our shared human vulnerability.  

Boris Johnson signed up to a Withdrawal Treaty with the EU, which  legally committed the UK to customs, sanitary, and phytosanitary controls between Britain and Northern Ireland, so as to avoid controls between North and South in Ireland.

 So far, Michel Barnier says he has detected no evidence that the UK is making serious preparations do this.  An attempt by the UK to back out of these ratified legal commitments would be seen as a sign of profound bad faith. 

Michel Barnier said that negotiating by video link was “surreal”, but that the deadlines to be met are very real.

 The first deadline is the end of June.  This is the last date at which an extension of the negotiating period beyond the end of December might be agreed by both sides. While the EU side would almost certainly agree to an extension, there is no sign that the UK will agree. Tory politicians repeatedly say they will not extend. 

This tight deadline would be fine, if the UK was engaging seriously, and purposefully, in the negotiation.

 But, according to Michel Barnier, the UK has not yet even produced a full version of a draft Agreement,that would reflect their expectations. The EU side produced its full draft weeks ago.  Without full texts it is hard to begin real negotiation. So far the UK has only produced texts of selected  bits of  the proposed Treaty.

 But the UK  insist that Barnier keep these bits of  draft UK text secret, and not share them with the 27 Member States. Giving Barnier texts that he cannot share with those on whose behalf he is negotiating, is just wasting his time. It seems to me the UK negotiators are adopting this strange tactic because they have no clear political direction from their own side.  They do not know whether these bits of text are even acceptable in the UK!

In the political declaration, that accompanied the Withdrawal Agreement, Boris Johnson agreed his government would use its best endeavours to reach agreement on fisheries by the end of July. Such an agreement would be vital if the UK fishing industry were to be able to continue to export its surplus fish to the EU. Apparently there has not been serious engagement from the British side on this matter. 

The other issue on which Barnier detected a lack of engagement by the UK was the so called “level playing field” question.

 The EU wants binding guarantees that the UK will not, through state subsidies, or through lax environmental or labour rules, give its exporters an artificial advantage over EU (and Irish) competitors.

 The “level playing field” is becoming a difficult issue within the EU itself.

 In the response to the Covid 19 economic downturn, some of the wealthier EU states (like Germany) are giving generous cash/liquidity supports to the industries in their own countries. 

 On the other hand, EU states with weaker budgetary positions (Italy, Spain and perhaps even Ireland) cannot compete with this.

 It is understandable that temporary help may be given to prevent firms going bust in the wake of the Covid 19 disruption.  But what is temporary at the beginning, can easily become indefinite. And what is indefinite can become permanent. Subsidies are addictive.

 The reason we have a COMMON Agricultural policy in the EU is that, when the Common Market was created 60 years ago, nobody wanted rich countries to be able to give their farmers an advantage over farmers in countries whose governments could not afford the same level of help. The same consideration applies to industry. Subsidies should be equal, or should not be given at all.

 State aid must be regulated, inside the EU, if a level playing field is to be preserved. To make a convincing case for a level playing field between the EU and the UK, the EU side will need to show it is doing so internally. This will be a test for President Von der Leyen, as a German Commissioner.

Which way will Boris Johnson turn on the terms of a deal with the EU?

I think it is unlikely he will look for an extension of the Transition period beyond the end of this year. 

He wants a hard Brexit, a clean break as he would misleadingly call it,  but he knows it will be very painful.

 He will probably reckon that the pain of a hard Brexit ,or no Deal, Brexit at the end of December, will be concealed by the even greater and more immediate pain of the Covid 19 Slump. Brexit will not be blamed for the pain. But if Brexit is postponed until January 2022, the Brexit pain will be much more visible to voters.

The Conservative Party has become the Brexit Party. It is driven by a narrative around re establishing British identity, and is quite insensitive to economic or trade arguments. It wants Brexit done quickly because it fears the British people might change their minds. That is why there is such a mad rush. It is not rational. It is imperative!

CAN A CHAOTIC “CRASH OUT” BREXIT, IN DECEMBER 2020, BE AVOIDED?

“Let’s get Brexit done” is Boris Johnson’s election slogan. His implication is that, once he gets a working parliamentary majority to ratify his revised Withdrawal Treaty, Brexit will be quickly done and dusted. 

This is over optimistic, to put it mildly.

There are three realistic outcomes to the Election, 

  • a Tory majority ( the most likely scenario at this stage),  
  • a Labour led government with the support of other parties, or   
  • a  hung Parliament in which no one can command a majority and form a government.

Even if Boris Johnson wins a majority, to get Brexit done he will still have to conclude a very complex trade negotiation with the EU, within an almost impossibly tight self imposed time line, by December 2020 (the end of the post Withdrawal Transition period).

He has tied himself be a commitment to Nigel Farage that there will be no extension of the December 2020 deadline. This is how he got the Brexit Party withdrew its candidates in all Tory held constituencies.

Reneging on that promise, because the negotiation need more time, would be costly for Boris Johnson, especially as it would  also extend the period in which the UK would have to continue contributing to EU funds.

If he were to change his mind and look for an extension of the post Withdrawal transition period beyond 2020, he will have to give notice of this by July of next year. The Withdrawal Treaty (Article 132) only allows for one extension of either one or two years. This is different from Article 50 extensions on which there is no legal limit.

If the deal is not done before the end of the (very short) transition period, then the UK crashes out of the EU with no deal at all. Remember this Trade deal will have to be ratified in the parliaments of all the EU member states, unlike the Withdrawal deal which only needed ratification by the European Parliament. So a crash out/no deal scenario is a major risk.

The implications of this for Ireland, and for the UK itself would be grave. 

This is only one scenario, the Tory majority scenario

The other  scenario concerns  what happens if Boris Johnson fails to get a majority.

Obviously if he fails , the next steps will  have to be decided by a replacement government. 

But who will head such a government, and what will be their Brexit policy? Neither question can be answered at this stage.

It is unlikely that Jeremy Corbyn’s Labour Party can have a majority on its own.  But Labour might be able to form a majority with support from the Scottish National Party, in return for a pledge to hold a referendum on Scottish independence.

Another possibility is that Labour could make an arrangement with the Liberal Democrats, but they would want a Prime Minister other than Jeremy Corbyn.

That could happen. If a majority of MPs said, in writing, that they wanted as Prime Minister, an alternative named Labour Party MP, not the leader , the Queen would call on that MP to form a government.

Either of these Labour led alternative governments would hold another referendum on Brexit . It might also seek amendments to the existing Withdrawal Treaty before holding that referendum.

This process would take a year or more to complete, so a lengthy extension of Article 50 would have to be sought. Meanwhile to UK would continue to contribute to EU funds.

All this would be quite messy, but it would be  preferable to a crash out, no deal, Brexit a year from now, which might occur if a majority Tory government were to make unrealistic trade demands of the EU.

A third possibility is that no potential Prime Minister could be assured of a majority in Parliament. Given that the UK now has a 5 party system, rather than the 2 party one it had for the past century, this is a real possibility. The Fixed Term Parliament Act requires the calling of another Election, 14 days after a no confidence vote, if no  government can secure the confidence of Parliament within those 14 days.

But let’s acknowledge that, at the moment, the most likely outcome is a Tory majority government. What happens when it proceeds to implement the revised Withdrawal Agreement and negotiate a Free Trade Agreement(FTA) with the EU? 

Given that the new Tory Parliamentary Party will be more radically pro Brexit than the old one, the UK negotiating position on the FTA   could be very demanding and very difficult for the EU to accept. Some of the new Tory MPs might even prefer a “no deal” on ideological grounds.

 Before negotiations with the UK begin, the EU side will have to secure a negotiating mandate from the 27 member states. 

 This will not be easy. Many states will have sensitive issues vis a vis the UK, for example

  • fisheries for Spain, 
  • agriculture for France, 
  • rules of origin for all members, and crucially,  
  • the maintenance of a level playing field for competition between firms inside the EU and those in the UK. 

Boris Johnson has said that, for him, the UK being able to have different environmental, social and product standards is the “whole point “of Brexit.  

There are real fears that UK would try to undercut the EU in these fields. 

So the EU will demand firm justiciable guarantees in the FTA that this will not happen. They will not take anything on trust. They will want a court to decide.

 Likewise, the EU will want justiciable guarantees that the UK will not give subsidies to its industries, of a kind that would not be permitted in the EU. 

The EU demand of binding arbitration will raise an allergic issue for Brexiteers.  The idea, that a “foreign court” might tell them what to do, is anathema to them.

If that is not agreed, it is hard to see how the EU could give up the possibility of introducing tariffs on UK exports to the EU, to level up the playing field.

Similar problems arise for agriculture and fisheries. The UK needs to decide what sort of farm policies it will have and if these will depart radically from EU norms.

If the UK tries to stop access for EU trawlers to its fishing grounds, it cannot expect tariff free access to EU markets for UK fish exports. Physical confrontations at sea are a real possibility.

There will also have to be a negotiation about cooperation between UK and Europol, and about money laundering. 

The position of Norway, will have to be considered. It contributes to EU funds in return for access to the Single Market. The UK cannot expect more, for a lesser contribution, than Norway makes. 

The position of countries like Japan and Canada, who have trade agreements with the EU , will have to be considered. They will look for any concessions the UK is given, other things being equal.

The earliest that the two sides would even be ready to start negotiating these difficult questions would be March 2020. On that basis, it is hard to see how it could all be wrapped up by December of next year. 

Remember the Canada Agreement with the EU took eight YEARS to negotiate, and the political atmosphere between Canada was much better, and the stakes much less, than is now the case between the UK and the EU.

Brexit is far from done. It is entering its dramatic second Act.

650 DIFFERENT ELECTIONS WILL DECIDE BREXIT

The UK General Election on 12 December will decide whether Brexit

  • goes ahead on the basis of Boris Johnson’s deal, 
  • is subject to a referendum or
  • is simply revoked.

But the result of the election will be affected by things that have little to do with Brexit.     The implications for taxpayers of Labour’s policies will be scrutinised. So will the personalities of the party leaders. The Conservative record will be a factor, as will their recent conversion to high spending.

In effect, the issue will be decided in 650 separate elections. Each constituency is different.

 A strong showing by a party, that has no chance of winning the seat itself, may siphon more votes away from one of the leading parties than it does from another, and this differential could tip the balance in favour of a party that would otherwise have lost the seat.

The UK electoral system forces voters to make tactical choices.

 If a voter wants to influence things, he/she may have to vote for a candidate, who has a good chance of winning and with whom they agree on some important issue, rather than for a candidate who may be closer to their views, but has no chance. 

Tactical voting is a very difficult exercise. Getting reliable information will be hard for voters to do. Disinformation and fake news will be factors.

The Conservatives are targeting Labour seats in constituencies that voted Leave in 2016, many in the Midlands and the North of England. But the Brexit Party will also target these same seats and the Brexit party does not have to defend a record in government, and is less associated with “austerity”.

The latest polls are very inconsistent.

 In the last ten days, 

A You Gov poll gave the Conservatives 37%, Labour 22%, Liberal Democrats 19% and the Brexit Party 12%

But an Opinium Poll gave the Conservatives 40%, Labour 24%, Lib Dems 15% and the Brexit Party 10 %.

These polls, taken before the election was called, suggest a Conservative majority government.

 But as the campaign goes on the Brexit issue will fade, and other issues may come to the fore, not least the slow performance of the UK economy in recent years.

My own experience is that polls, taken before an election is actually called, are not good predictors of the final result.

But a poll taken a week after the campaign has started is a much better indicator.

Other opinion polls suggest a deeply divided electorate. A poll done by Edinburgh and Cardiff Universities suggests a deeply polarised electorate.

Brexit appears to be a Conservative Party obsession, that is not shared by the supporters of other parties.

For Example, 82% of those who intend to vote Conservative say the unravelling of the peace process in Ireland would be a price worth paying to get Brexit done, whereas only 12% of Labour and 4% of Liberal Democrats are of that opinion. 

There is a similar difference between the parties on the risk that Brexit could lead to a referendum on Scottish independence. 

The gap between younger and older voters is also stark. 21% of those under 24 felt Brexit was worth risking the Irish peace process for, whereas 68% of those over 65 were prepared to take that risk. 

Older voters are more reckless, which goes against the conventional stereotype.

There is also a difference between the parties on how they perceive the likelihood of certain things actually happening.

Only 28% of Conservative voters believe Brexit is likely to lead to an unravelling of the Irish peace process, whereas 77% of Labour voters believe it is likely to do so. This suggests that people believe what they want to believe.

On the possibility of Brexit leading to a referendum on Scottish independence, 66% of English voters believe it will happen. There is only a modest difference between the parties in this. Very few actually want Scotland to leave the UK, but many are prepared to take that risk.

The great tragedy is that the British people, in a referendum during the Conservative/ Liberal Democrat coalition, rejected the Alternative vote electoral system. This would have given it a more evenly representative parliament. It would have made coalition the norm. If so, there would have been no Brexit referendum.

A Fixed Term Parliament combined with a winner take all electoral system was bound to lead to a crisis.  A fixed term Parliament would have been workable if there was a more proportional system of election, but it is not workable in a political culture, like that of the UK, which rejects coalitions.

Irish people will have to sit and watch an important aspect of our future being decided under a flawed electoral system which favours polarisation and over simplification. 

THE BORIS VERSION OF BREXIT

http://www.chathamhouse.org/

Make no mistake about it, the latest version of Brexit is a very hard Brexit.

The UK Government has abandoned the legally binding commitment in the previous deal to align with EU regulatory standards to the greatest extent possible. That is now dropped in favour of a political aspiration.

The more the UK diverges from EU standards the greater is the likelihood that the EU will have to place tariff and other barriers in the way of UK imports to the EU, and now also to Northern Ireland. The problem will be particularly acute for agricultural goods.

The EU/UK trade negotiation has yet to begin, but I believe it will be both lengthy and difficult. This is a direct result of the “red lines” for Brexit chosen by the UK (no custom union membership, no single market membership and no ECJ jurisdiction). This was a legitimate choice for the UK to make, but the costs of the choice are yet to be revealed and understood. When they are, it will be too late to change course. 

Many in the UK say they just want to “get Brexit over with”. The impatience is understandable, but the truth is that agreeing the Withdrawal Treaty will not actually get Brexit “over with”. The additional bureaucracy will be permanent. If there is not to be a no deal crash out, the transition period will have to be much long than the end of 2020, because the trade negotiation will only be in its early stages by then.

The only way to get  the agony of Brexit over with, would be to revoke Brexit. There is little popular support for that, so Brexit will drag on and preoccupy British politics for years.

By choosing a harder Brexit than Mrs May, and agreeing that the controls will be in the Irish sea, Boris Johnson has chosen to prioritize the interests of  hardline Brexiteers in England over the interests of the DUP in Northern Ireland. Such a choice was inherent in Brexit, which is why it will remain a puzzle for historians to discern why the DUP chose to support Brexit with such enthusiasm in the first place.

 THE WORLD AFTER BREXIT

I would like to turn now to the world after Brexit, and about the European Union, of which we will continue to be a member and in whose success we will now have a disproportionate interest.

The world has become a much more unpredictable place than it was 10 years ago. 

The era of easy decisions may be over.

A European country, Ukraine, has been successfully invaded by it neighbour, Russia, breaking solemn undertakings that had been given. We have been reminded of the importance of defence.

There is widespread evidence of interference in elections and democratic processes by authoritarian regimes in other parts of the world. Voting software is being infected. Campaigns are being hacked. National rules on election spending can be circumvented via the social media.

The United States has created doubt around its defence commitments to Europe. It has walked away from its Kurdish allies in Syria, and Europe was not able to fill the gap, although the refugees from that conflict are more likely to end up in Europe than in America. In fact Europe is dependent on Turkey and North Africa to curb mass migration to the southern shores of the EU.

The EU has not developed a migration policy, which, if properly organised , could bring dynamism to our continent to compensate for the loss of dynamism that will inevitably flow from the ageing of the native European population.

The US is undermining the rules based international order in the field of trade. It is refusing to allow the appointment of replacement judges to the WTO’s appellate court, which will soon lead to that court ceasing to function. This is happening just at the time that our nearest neighbour may find itself relying on the WTO once its post Brexit transition period expires. 

THE RISE OF CHINA

China is returning to the dominant position it held in the world economy in the two millennia up to 1800.

 It is doing this on the strength of its human capital, not its physical capital. It is educating more engineers that the US and the EU combined.

 It is doing it through its competitive and  innovative firms, not through its monopolistic state enterprises. Chinese R and D spending will exceed US Rand D this year and far exceeds EU R and D.

 It is ahead of everyone in 5G communications, at the time the world economy is becoming ever more digital.

Chinese firms own Volvo, Pirelli and recently bought the firms supplying robots to the German car industry. EU could not buy the equivalent Chinese firms.

Chinese military spending exceeds that of all EU states combined and is already half that of the US.

 If the US thinks it can use trade policy to arrest Chinese development, it is probably making a mistake. 

But the US is right to insist on fair competition. China must be treated in the WTO as a developed country, and not get concessions intended for much poorer countries.

In its response to the Chinese challenge, the EU should maintain its robust competition policy and should not try to pick industrial winners from Brussels.

THE RESPONSE OF EUROPE

Europe would be much better placed to defend its own interests, and to act as a balancing power in the world, if the euro functioned as a global reserve currency.

 To achieve that, we need to create a Capital Markets Union and complete the Banking Union. This requires a harmonisation of company insolvency rules throughout the EU or the eurozone.

The Eurozone must have a capacity to cope with localized shocks and to prevent contagion.  We need viable proposals for a eurozone wide reinsurance of bank deposits, and eurozone wide reinsurance of the unemployment  benefit systems of member states..

BREXIT IS A SETBACK FOR EUROPE……..STAGNATION MUST BE AVOIDED

There is no doubt but Brexit has been a setback for Europe.

True, the EU had maintained its unity and stability, in stark contrast to the way in which the UK system has been convulsed by the divorce. But that does not take away from the fact that we are losing a relatively young, diverse and creative member state. 

The EU’s strategic weight in the world will be reduced by the absence of the UK.

The population of the remaining members of the  EU are, in global terms, relatively elderly, pessimistic and risk averse. This could lead the EU to make big mistakes.

I give some examples of this.

Many member states refuse even to contemplate the amendment of the EU Treaties because of the risk of defeats in referenda. If that remains the attitude, the EU will simply stagnate. Every successful human organisation must have the capacity to change its rules if this is demonstrably necessary. The US is unable to amend its constitution and we can see the problems that has led to.

Unlike the US, the EU has been able to attract and accommodate new member states over the last 50 years. At last week’s Summit, France the Netherlands and Denmark blocked the opening of accession talks with North Macedonia even though that country has done everything the EU asked to qualify, even changing its name, which was a highly sensitive matter. 

The fact that this rejectionism was led by President Macron, who makes great speeches about European integration, is particularly disquieting. I hope he changes his mind. Yes, we need tougher means of ensuring that the rule of law in respected in the most rigorous way but that could have been dealt with in the negotiations with North Macedonia, which would have gone on for years any way.

 THE SINGLE MARKET

We must defend the integrity of the EU Single Market, at the borders of the European Union and throughout its territory. 

Ireland must be seen to be, fully compliant with EU Single Market rules. Otherwise Ireland’s geographic position will be used against it by competitors for the investment.

The EU Single Market is not complete. There is much more to do.

An April 2019 Study “Mapping the Cost of non Europe” estimated that 

    + completing the  classic single market would add  713 billion euros to the EU economy. 

    + completing Economic and Monetary Union would add a further 322 billion, and    

    + completing a digital single market a further  178 billion euros. 

 A more integrated energy market would save a further 231 billion and a more integrated EU approach to fighting organised crime would be worth 82 billion.

 Cross border VAT fraud is costing 40 billion. This will be an area of special concern in regard to traffic between Britain and Northern Ireland.

These are some of the reasons why we must complete the Single Market.

Services account for three quarters of EU GDP. 

 But  we have been very slow in creating a single EU market for services. 

 In the field of Services, only one legislative proposal had been adopted during the term of the outgoing Commission, a proportionality test for new regulations on professions.

 All other proposals are blocked.

 I think that a major obstacle is vested interests in national or regional governments, who do not want to give up power.

By completing the Single Market, the EU can show that it has much more to offer to the world than a post Brexit Britain.

To help complete the Single Market, Ireland should be open to qualified majority voting on energy and climate matters. 

We should also be open to carefully defined individual amendments to the EU Treaties if they can be shown to the public to deliver real benefits.

A LEVEL PLAYING FIELD

The existing Withdrawal Agreement protects UK environmental, product and labour standards, in a way that a mere Trade Agreement will never do.

 In any trade negotiation with a post Brexit Britain, maintaining a level competitive playing field will be vital.

 No subsidies, no cartels, and no undercutting of EU standards must be insisted upon.

Likewise the UK must not be allowed to undercut the EU on worker protection, environmental and product quality standards. The UK will have to set up bureaucracies to devise and enforce UK standards. 200 EU environmental laws will have to be replaced by the UK. Westminster will be busy.

EU WIDE DEMOCRACY

 It is over 40 years since the first European Parliament election.

 While the  EP elections are hotly contested, the contests are often really about national issues.

 A genuine EU wide debate does not take place, because the elections are confined within in national constituencies. An EU “polis” or public opinion has not yet been created.

My own view is that the President of the Commission should be elected separately from the Parliament, using a system of proportional representation (PR). 

We must have strong national democracy if we are to have a strong EU, and we must have strong national democracy if we are to have strong states.

 There are remarkable differences in the level of confidence people in Europe feel in their own national democracy. According to a recent Pew Poll, 72% of Swedes have confidence in how their national democracy works. Within the Netherlands confidence in their system was  68%, in Poland it was 61% and in Germany 65%. 

But , at the other end of the spectrum, only  31% of British, and 32% of Spaniards and Italians had confidence in their own democratic systems.

To build confidence in the EU, we also need to rebuild confidence in democracy itself, at every level of governance

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