John Bruton

Opinions & Ideas

Category: BREXIT Page 2 of 6

The problem is Brexit itself, not the backstop.

Brexit, of its nature, means hard barriers between the UK and the EU.

This is because it means the UK having different standards, and, sooner or later, different trade arrangements and tariffs than the EU.  

Whether these barriers are at the geographic boundary, or a few miles away, makes little difference.

These new barriers will bring delays, extra bureaucracy, and eventually bankruptcies, in their wake.

This is what Brexit means, and was always going to mean. Taking back control, by its nature, means more controls

The UK Government says it wants to impose these controls for two reasons.

The first is to be able to control immigration to the UK from the EU.

The truth is that the bulk of the immigration to the UK is not from the EU, but from outside it. EU immigration to the UK will fall off anyway because the population of the EU countries, from whom immigrants have come to the UK, is set to decline.

The second is to be able to make its own trade deals with non EU countries.

This argument is unconvincing. On leaving the EU the UK will lose the trade agreements it ALREADY HAS with the EU, and through the EU, with other countries.

In fact, leaving the EU will mean the UK losing trade agreements with countries that account for 70% of all UK trade. It will need a lot of new agreement to make up for this sudden and dramatic loss!

The backstop would reduce the effect of this, but not remove it altogether, especially if the UK opts for a different VAT regime to the EU.

No Deal

If there is no deal, and no backstop, the European Commission said in a paper published in November, that ;

“Member States, including national authorities, will play a key role in implementing and enforcing EU law vis-à-vis the United Kingdom as a third country. This includes performing the necessary border checks and controls and processing the necessary authorisations and licences.”

The paper does not exempt any of the EU Member State from this requirement.

Indeed if the EU Customs Union and Single Market were to deliberately fail to control any of its borders, it would soon cease to exist, as a Customs Union and a Single Market.

This would not be in Ireland’s interest, to put it mildly.

WHY IS THERE AN IRISH BACKSTOP?

It puzzles many people in Britain that something known as an “Irish backstop” should be at the heart of an increasingly bitter dispute. The dispute is about the Deal the UK Government has made with the EU on the terms for the UK leaving the EU.

Most people understand that, when the UK leaves the EU, the only land boundary between the UK and the EU will be the 300 mile long border in Ireland.

Some do understand that if the UK leaves the EU there will have to be border controls.

After all, leaving the EU was supposed to be about taking back “control”, and, given that countries can only exercise control in their own territory, there is a logical necessity to have controls at the border of a country’s territory,  at its ports and on its land boundary.

This is not something made up by the EU to annoy Brits, but is a logical consequence of Brexit, which is, as we all know, something Britons have chosen for themselves, and not something imposed on them by the EU.

The proposed backstop in Mrs May’s deal with the EU  involves the whole of the UK staying in a close customs arrangement with the EU.

The original idea was that the backstop would be confined to Northern Ireland, but the UK government itself preferred a backstop arrangement that would cover the whole UK, so as to minimize the controls that would otherwise have to be imposed between Britain and Northern Ireland.

The object of the entire exercise is to avoid having to have controls at the 300 crossing points between Northern Ireland and the Republic of Ireland.

Some in Britain think that the UK should be free to leave the EU, and that the UK and Irish governments should then just decide, between themselves, that they were simply not going to have controls on the Irish border.

That would not work because Ireland would still be in the EU, and would be breaking EU rules if it failed to control its portion of the EU land border.

Apart from being illegal, it would be impractical.

The UK, once outside the EU, would immediately go off and try to make trade deals with non EU countries. These would inevitably involve agreeing to different standards, and different tariffs, on goods coming from these non EU countries to the ones that the EU (including Ireland) would be applying to these countries.

So, if there were no controls on the Irish border, goods from these non EU with which the UK had made its own trade deals could enter the EU via Northern Ireland, without complying with EU standards or paying EU tariffs.

That would destroy the EU Single Market, which is based on common rules and tariffs, made, enforced and interpreted in the same way for all 27 EU countries (including Ireland).

TRADE DISCRIMINATION BREAKS WTO RULES

Outside of the EU, under WTO rules, the UK would also have to impose tariffs on its side of the Irish border, unless it wanted to collect NO TARIFFS AT ALL on goods coming into the UK from any country in the world!

This is because of a WTO rule which, says that, in the absence of a broad trade agreement, a country cannot discriminate between WTO member countries in the rate of tariffs it charges on goods coming from those countries (the most favoured nation rule).

So, in the absence of a trade deal with the EU, the UK must charge the same tariffs on Irish goods as it would  charge on goods coming from any WTO members, with whom it has no trade deal, which, on the day it leaves the EU without a deal, would be every WTO country!

If it attempted to discriminate unilaterally, the UK would be bound to be taken to the WTO court by some or all of the WTO countries who would not be getting the same concessions.

The UK is a trading nation. As such, it benefits from a rules based world trading system. So it would not be in the UK’s interest to start breaking WTO rules on the day it left the EU, just to solve a problem that is of its own making.

SAVING LIVES BY GIVING RESPECT TO THE TWO ALLEGIANCES IN IRELAND

The other big reason for having an “Irish” backstop”, and for avoiding a hard border, is about human beings, rather than just about commerce.

For the past four centuries two communities, with different allegiances have lived together, geographically intermingled, in the Irish province of Ulster.

One community feels a sense of allegiance to Britain, its monarch, its historic narrative and its flag. The other feels an allegiance to Ireland and identifies itself with different historic narrative and different symbols. The two communities have different religious allegiances too but the disagreements between them are not primarily about religious matters, they are all about national identity.

For centuries, the contest between these two identities was a zero sum game.  Either the British identity had to win, or the Irish identity had to win. That zero sum approach led to wars, threats of wars, or uprisings in 1641-51, 1689-1691, 1798, 1867, 1911, 1916, 1919-23, 1939, 1956-7, and 1969-1998. These conflicts caused many casualties in Ireland, and in Britain too.

British and Irish political leaders have for the last 40 years been trying to find a different way forward. Rather than a zero sum game, where if one identity won, the other had to lose, these leaders sought to create conditions in which both identities could coexist comfortably together within Northern Ireland, without either of them winning or losing.

The aim was to ensure that neither would feel cut off from their focus of their emotional allegiance. The nationalists would not feel cut off from Dublin, and Unionists would not feel cut off from London or the “mainland” as they would call it.

The Belfast Agreement of 1998 achieved this. Crafted between Ireland and the UK, when both were members of the barrier free EU, it created structures to create a comfort zone for both communities.  This was done through establishing three interlocking structures of cooperation, incorporated in an over arching international Treaty, namely

  1. power sharing within Northern Ireland,  
  2. cooperation between North and South and
  3. cooperation between Dublin and London.

On the strength of this Agreement, Ireland changed its constitution to remove a  territorial claim it had on Northern Ireland.

Now, 20 years later, the UK’s decision to leave the EU puts these structures at risk, because, for the reasons I explained earlier, Brexit requires barriers to go up between the UK and Ireland, where previously there was free exchange.

This is why, at a meeting in London, long before the Referendum, I described Brexit as an” unfriendly act”  by the UK vis a vis my country.

The backstop is simply an effort to mitigate the damage. It is a second best option…… and a bad second best at that.

The only option that will not damage the structure of peace, we have so painstakingly built between Ireland and Britain, and within the island of Ireland, would be for the UK to decide to stay in the EU after all.

WHAT HAPPENS IF THERE IS NO BREXIT  DEAL?

The European Commission has produced a paper setting out the preparations that will have to make for a “No Deal “ Brexit, and what would have to done to deal with it.

I have extracted some of the interesting quotations from it.

It is quite explicit in some respects, but those who say there will be no hard border in Ireland in any circumstances will need to seek further clarification from the Commission.

BORDER CHECKS

The Commission paper says

“Member States, including national authorities, will play a key role in implementing and enforcing EU law vis-à-vis the United Kingdom as a third country. This includes performing the necessary border checks and controls and processing the necessary authorisations and licences.”

It adds

“The Commission is working with Member States to coordinate the measures they adopt to ensure that contingency preparations are consistent within the European Union”

and says that

“Member States should refrain from bilateral discussions and agreements with the United Kingdom, which would undermine EU unity”.

THE IRISH CASE

The Commission paper recognises that Ireland has a particular problem with Brexit.

It says its stands ready to  explore pragmatic and efficient support solutions, in line with EU State aid law and that it

“ will support Ireland in finding solutions addressing the specific challenges of Irish businesses.”

But it does not say that Ireland would be exempt from applying the EU Customs controls on the border between Ireland and Northern Ireland.

This omission does not seem to tally with statements being made by some in Ireland.

It is unclear what sort of help the Commission will be able to give Irish businesses.

78 DETAILED PAPERS AVAILABLE

In order to assist stakeholders in their preparation for the withdrawal of the United Kingdom, the Commission has published 78 detailed sectoral information notices guiding individual industries on the steps to be taken.

It would be useful to scrutinize these papers as to their application to business between Ireland and Northern Ireland.

Contingency measures in the immediate aftermath of a No Deal Brexit will in general have to  be

“temporary in nature, and should in principle not go beyond the end of 2019”

AIR TRANSPORT DISRUPTIONS

In the area of air transport, the withdrawal of the United Kingdom, without any arrangement in place at the withdrawal date, and without operators concluding the necessary and possible alternative arrangements, will lead to abrupt interruptions of air traffic between the United Kingdom and the European Union, due to the absence of traffic rights and/or the invalidity of the operating licence or of aviation safety certificates.

Regarding traffic rights, the Commission says it will propose measures to ensure that air carriers from the United Kingdom are allowed to fly over the territory of the European Union, make technical stops (e.g. refuelling without embarkation/disembarkation of passengers), as well as land in the European Union and fly back to the United Kingdom. This will create a really difficult situation for UK airlines

ROAD TRANSPORT DIFFICULTIES

Regarding road transport, in case of no deal scenario, as of the withdrawal date, UK hauliers will have market access rights limited to the permits offered under the European Conference of Ministers of Transport (ECMT) which would allow for considerably less traffic than what currently takes place between the Union and the United Kingdom.  This will have serious implications for Irish businesses using UK hauliers to get goods to the continent.

In the case of a no deal scenario, as of the withdrawal date, goods entering the European Union from the United Kingdom will be treated as imports and goods leaving the European Union to the United Kingdom will be treated as exports.

COLLECTION OF DUTIES AND TAXES

The Commission says that all relevant EU legislation on imported goods and exported goods will apply, including the levy of certain duties and taxes (such as customs duties, value added tax and excise on importation), in accordance with the commitments of the European Union under the rules of the World Trade Organisation.

The need for customs declarations to be presented to customs authorities, and the possibility to control shipments will also apply.

The Commission paper does not say that the border in Ireland would be exempt from this. This will need to be clarified.

The Commission calls on Member States to take all necessary steps to be in a position to apply the Union Customs Code and the relevant rules regarding indirect taxation on 30 March 2019, in case of a no deal scenario, to all imports from and exports to the United Kingdom. Again there is no explicit, or implicit, exemption for the EU border in Ireland.

Customs authorities may issue authorisations for the use of facilitation measures provided for in the Union Customs Code, when economic operators request them, and subject to relevant requirements being met.

Ensuring a level-playing field and smooth trade flows will be particularly challenging in the areas with the densest goods traffic with the United Kingdom. The Commission is working with Member States to help find solutions in full respect of the current legal framework.

The paper also deals with financial services and with residency rights for UK citizens living in EU countries.

ANIMAL AND PLANT HEALTH CHECKS WILL BE NECESSARY

The Commission says that, in the event of a “No Deal” goods will have to undergo sanitary and phytosanitary controls by Member States authorities

“at Border Inspection Posts, which is a matter of Member State responsibility”.

Ambiguity about how all this might apply on the Irish border does not help businesses with their contingency planning.

 

UK LABOUR STANCE ON BREXIT WILL BE CRUCIAL

The worst possible outcome of Brexit for Ireland would be the UK crashing out of the EU, without a deal, next March because the UK Parliament cannot make a decision. The key to avoiding this disaster is in the position of the British Labour Party.

So far, the focus of discussion in regard to Brexit has been on whether the minority Conservative Government can reach sufficient consensus internally, to make a deal to withdraw the UK from the EU.

But such a deal can only come into effect if it is approved by the House of Commons.

Here the stance of the British Labour Party is crucial.

If Labour were open to supporting the deal, or even to abstain in the vote, the DUP and the hardline Conservative Brexiteers would not be able to stop it.

On the other hand, if Labour, the DUP, and the hardline Brexiteers all oppose it, the deal will not come into effect.

There would then be massive political uncertainty, the likelihood of the UK crashing out of the EU on 29 March, and a huge blow to the global economy.  One could then blame on the DUP and the hardline Brexiteers, but Labour, as the bigger party, would bear more responsibility than the others for this debacle.

LABOUR’S  “SIX TESTS” ARE BESIDE THE POINT

The Labour Party has set six tests that it says the Withdrawal Agreement must pass, if Labour is not to vote against it in the House of Commons. On close examination, the tests seem to be designed to allow Labour to vote against any conceivable deal that Mrs. May could negotiate on a Withdrawal Treaty.

These tests that Labour says the Withdrawal Agreement must pass  are;

“Does it ensure a strong and collaborative future relationship with the EU?”

Comment. This is impossible because the future relationship will not be negotiated now, but later during the transition period.

“Does it deliver the “exact same benefits” as we currently have as members of the Single Market and Customs Union?”

Comment. This is also impossible because there would be no point having an EU Single Market or Customs Union, if, as a  non member, the UK could get all the benefits that members get. In any event, these issues will not be settled in the Withdrawal Treaty.

“Does it ensure the fair management of migration in the interests of the economy and communities?”

Comment.  The UK has not yet finalized its OWN future migration policy so it is unreasonable to expect the Withdrawal Agreement to do what the UK government itself has been unable to do. In any event, what would Labour’s migration policy be?

“Does it defend rights and protections and prevent a race to the bottom?”

Comment. This is not going to be settled now. It will be the subject of the future trade negotiations and the EU will be doing its best to ensure that the UK, outside the EU, does not reduce quality, environmental and labour standards to win market share.

“Does it protect national security and our capacity to tackle cross-border crime?”

Comment.  Again this is for the future negotiation, not for the Withdrawal Agreement. The only way the UK can take part in the European Arrest Warrant is by staying in the EU and accepting the jurisdiction of the European Court of Justice. National Security policy is the responsibility of member states, not the EU, and cannot be bound by an agreement made by the EU.

Does it deliver for all regions and nations of the UK?

Comment. This is a matter for the UK government, not for the Withdrawal deal from the EU.

So the Agreement cannot pass these tests, for the simple reason that none of these six matters can be finalised until later.

They are not valid tests for a Withdrawal Agreement, and the Labour Party should know that.

It is true that the Withdrawal Agreement will be accompanied by a political declaration about the framework for future relations between the UK and the EU. But, legally speaking, this declaration cannot give binding commitments on the six points raised by Labour.

In fact, on some of these matters, like security policy, are ones where the EU could not give commitments, even in a future Trade agreement, without the consent of the legislatures of each of the 27 member states of the EU.

The Labour Party knows this perfectly well.  Choosing six tests designed to give a basis for rejecting any Agreement Mrs. May could negotiate would be a legitimate and normal opposition tactic, if the government had an overall majority. But it does not. It depends on an agreement with the DUP, which the DUP has said it is prepared to break.

AND WHAT HAPPENS IF LABOUR DEFEATS  THE DEAL IN PARLIAMENT?

Let us assume Labour wins a vote to reject the Withdrawal Agreement Mrs. May makes, what does Labour do then?

Obviously, Labour would like either a General Election or a change of Government in this Parliament.

But , even if that happens, a Labour led Government could not have time to negotiate a new Withdrawal deal,  that would pass its own six tests, between now and the 29 March next year, the date on which the UK will be out of the EU, deal or no deal.

The only way Labour could pass its own six tests would be by withdrawing the Article 50 letter written by Theresa May, and seeking to keep the UK in the EU after all.

There is legal doubt as to whether the UK has the power to withdraw its Article 50 letter. The European Court of Justice would have to adjudicate on that.

Secondly, staying in the EU after all, would require a second Referendum.

A second Referendum would have a lead time of 22 weeks, from the decision to hold one to Polling Day. This is because of the requirements of the law in Britain. 

A special Bill for a Referendum would have to pass in both the Houses . This twenty-two week delay would bring us beyond the UK ‘s automatic exit date of 29 March, unless the UK had first got permission to withdraw the Article 50 letter.

All this has huge implications for the whole of Ireland, not just the border.

So, to avoid a crash out Brexit, Irish diplomacy now needs to focus on the Labour Party as well as on the Conservative Government.

TWO OPTIONS…BOTH DIFFICULT

The Labour Party needs to be persuaded to come off the fence and either

  •    back a realistically negotiable withdrawal deal or
  •    say clearly that it would prefer the UK to say in the EU.

Labour could then base their parliamentary tactics on whichever of those two options they prefer. Either would be less disastrous than the present fudge.

WHAT IS AT STAKE IN THE EU’S DISPUTE WITH POLAND?

Brexit is not the only problem challenging the integrity of the EU’s single market.

Last week the European Court of Justice(ECJ) ordered the Polish government to stop appointing new Judges.

In December the Venice Commission, a body set up by the Council of Europe (which is independent of the EU), said that elements of the reform of the judiciary being undertaken by the present Polish government  

“ bear a striking resemblance with the institutions that existed in the Soviet Union”

One of the authors of that report was the distinguished Irish barrister, Richard Barrett, who worked at one time in the Irish Attorney General’s office.

The EU is a system of rules and the EU can only survive if its rules are fairly and uniformly enforced by the courts of the 28 member states.

The European Union is a common market precisely because it has a common system for

  • making,
  • interpreting, and
  • enforcing

common rules that apply directly to the citizens of its member states. These common rules are interpreted, in the first place, by the national courts in each of the member states. So the integrity of national courts is vital for the EU.

This issue lies at the heart of the difficulties the UK is experiencing, as it tries to leave the EU, still enjoy the benefits of the EU’s common market for goods, but without taking part in the common system for making, interpreting, and enforcing the rules of the common market.

In a very different way, this same issue is at the heart of the disputes, between the European Commission and the governments of Poland and Hungary, about the independence of their judicial systems.

If one is living or doing business in Poland, the only way one can get one’s Common Market rights is by going, in the first place to the Polish courts. This course should be open to you, whether you are a Polish citizen or not, and whatever political opinions, or status vis a vis the government of Poland.

The EU insists that courts be independent so that everyone can enforce their EU rights, as equal EU citizens, anywhere in the EU, at all times.

This rigorous insistence on the rule of law is one of the reasons many European countries want to join the EU, so that they can get the EU seal of approval for the rule of law in their county, and thus be attractive to overseas investors and other visitors.

I visited Serbia recently , and heard that country’s Prime Minister, Ana Brnabic, stress that accession to the EU was the number one priority for countries in her region. She said that the rule of law and transparent administration, demanded as preconditions for Serbian membership of the EU, are crucial to winning foreign investment and access to cheaper finance for Serbia.

So, if the Polish courts were to be allowed become politicized, and were perceived to no longer be objective in all circumstances in interpreting EU law, and Poland still tried to continue to enjoy all the privileges of EU membership, that would damage the EU as a whole, as well as Polish citizens. It would discourage investment in Poland. Worse still, it would remove part of the reason for the existence of the EU…the rule of law.

The European Commission started proceedings against Poland under article 7(1) of the EU Treaties over aspects of the restructuring of the Polish judiciary. It was on an application to it by the European Commission, that the ECJ ordered the Polish government to stop appointing a large number of new judges to its Supreme Court in recent weeks.  The ECJ feared the new appointments might politicize the Polish courts.

The Polish government is able to propose this large number of new appointments because it is compulsorily retiring up to 40% of existing judges, on the basis of newly introduced upper age limits.

The well founded fear is that it will replace these compulsorily retired judges, with judges sympathetic to the views of the present government. The age limit will not, indeed, be applied uniformly. The government will be able to grant discretionary extensions to some judges, presumably those whose judgments it likes.

This comes on top of a merger of the offices of the Minister for Justice and the Public Prosecutor. This merger creates a fear that prosecutorial decisions will also be politicized. The independence of the DPP’s office in Ireland was one of the important reforms made in Ireland in the 1970’s, and it has been carefully protected by successive Taoisigh since then.  

The Polish “reforms” also provide that the President of the Republic, not the court itself, would establish the rules of procedure for the Polish Supreme Court, determining which categories of judge would hear what sort of case. Again this is unacceptable political interference.

In the Venice Commission’s report, co-authored by Richard Barrett from Ireland, the Commission concluded that the Polish government’s proposed mechanism for an extraordinary review(and possible reversal) of past judgments was

“dangerous to the stability of the Polish legal order”

and said it was “problematic”  that the mechanism is retroactive,  and allows the reopening of cases decided  before the proposed law was to be enacted. This is an understatement.

The Venice Commission concluded that the proposed legislative and executive power to interfere in a severe and extensive way in the administration of justice

“pose a grave threat to judicial independence as a key element of the rule of law”.

It is very important for the EU that the Polish government realizes that it is not enough just to have free elections. A country cannot enjoy the benefits of EU membership, or of democracy, unless it respects the rule of law which is enshrined in Article 2 and Article 7 of the EU Treaties.

The credibility of the EU, and the integrity of the EU Single Market, is at stake in Commission ’s dispute with Poland, to an even greater extent than it is with the UK’s attempt to “have its cake and eat it” on trade!.

THE IRISH BACKSTOP….HOW DIFFICULT?

The harder the Brexit, the harder will be the resolution of the Irish border problem.

In a Joint Report of 8 December 2017, the UK agreed to respect Ireland’s place in the EU and that there would be no hard border in Ireland. This was to apply

“in all circumstances, irrespective of any future agreement between the EU and the UK”.

The further the UK negotiating demand goes from continued membership of the EU, the harder it will be for it to fulfill the commitments it has given on the Irish border in the Joint Report.

If the UK government had decided to leave the EU, but to stay in the Customs Union, the Irish border questions would have been minimized.  But the government decided to reject that, because it hoped to be able to make better trade deals with non EU countries, than the ones it has as an EU member.

If the UK government had decided to leave the EU, but  to join the European Economic Area (the Norway option),this would also have minimized the Irishborder problems. The government rejected that because it would have meant continued free movement of people from the EU into the UK .

In each decision, maintaining its relations with Ireland was given a lower priority than the supposed benefits of trade agreements with faraway places, and being able to curb EU immigration.

The government got its priorities wrong.

Future trade agreements that may be made with countries outside the EU will be neither as immediate, nor as beneficial to the UK, as maintaining peace and good relations in the island of Ireland. The most they will do is replace the 70 or more trade agreements  with non EU countries that the UK already has as an EU member and will lose when it leaves.

EU immigration to the UK, if it ever was a problem, is a purely temporary and finite one.

Already the economies of central European EU countries are picking up, and, as time goes by, there will be fewer and fewer people from those countries wanting to emigrate to the UK(or anywhere else) to find work.  These countries have low birth rates and ageing populations, and thus a diminishing pool of potential emigrants.

Solving the supposed EU immigration “problem” is less important to the UK, in the long run, than peace and good relations in, and with, Ireland .

If, as is now suggested, the UK looks for a Canada or Ukraine style deal, the Irish border problem will be even worse. Mrs May has recognized this and this is why she rejects a Canada style deal..

A Canada style deal would mean the collection of heavy tariffs on food products, either on the Irish Sea, or on the Irish border. Collecting them on the long land border would be physically impracticable, so the only option would be to do it on the Irish Sea.

The all Ireland economy, to which the UK committed itself in the Joint Report, would be irrevocably damaged. The economic foundation of the Belfast Agreement would be destroyed.

It is time for the Conservative Party to return to being conservative, and conserve the peace it helped build in Ireland on the twin foundations of the Belfast Agreement and the EU Treaties.  Conservative Party members might remember that, without John Major’s negotiation of the Downing Street Declaration in 1993, there would have been no Belfast Agreement in 1998.

The proposals the UK government is making for its future relationship with the EU will run into a number of obstacles in coming days.

The first will be that of persuading the EU that the UK will stick to any deal it makes.

Two collectively responsible members of the UK Cabinet, Michael Gove and Liam Fox, have both suggested that the UK might agree to a Withdrawal Treaty on the basis of the Chequers formula, but later, once out to the EU, abandon it, and do whatever it liked. This would be negotiating with the EU in bad faith. Why should the EU make a permanent concession to the UK, if UK Cabinet members intend to treat the deal as temporary?

The second problem relates to the substance of the UK proposals.

They would require the EU to give control of its trade borders, and subcontract control to a non member, the UK. While the UK proposals envisage a common EU/UK rule book for the quality of goods circulating, via the UK, into the EU Single Market, the UK Parliament would still retain the option of not passing some of the relevant legislation to give effect to it. The UK would not be bound to accept the ECJ’s interpretation of what the common rules meant. Common interpretation of a common set of rules is what makes a common market, common.

Mrs May is not the only Prime Minister with domestic constraints.  Creating a precedent of allowing the UK to opt into some bits of the EU Single Market, but not all, would create immediate demands for exceptions from other EU members, and from Switzerland and Norway (who pay large annual fees for entry to the EU Single market). It would play straight into the hands of populists in the European Parliament elections, which take place just two months after the date the UK itself chose as the end of its Article 50 negotiation period.

It does not require much political imagination to see that aspects of the UK proposal, if incorporated in a final UK/EU trade deal in a few years time, would be a hard sell in the parliaments of some of the 27 countries.  We must remember that all that would be needed for the deal to fail, would be for just one of them to say NO.

Remember how difficult it was to get the Canada and Ukraine deals through.

WHY THE EU HAS DIFFICULTIES WITH THE CHEQUERS PROPOSALS

The Chequers proposals of the UK Government were a genuine, if belated, attempt to reconcile the expectations of the British people with EU realities.

But they ran into difficulty for the following reasons. If Chequers remained an opening negotiating position, it might have started a useful conversation.

  1. But , under the pressure of domestic UK politics,  Prime Minister May soon made it a “red line” position, and thus no longer negotiable.
  2. From an EU perspective, Chequers was problematic because it would have meant the EU giving up control of its trade borders, and subcontracting that to a non member, the UK. It would have provided for a common rule book for the quality of goods circulating, via the UK, into the EU Single Market, but the UK Parliament would still have retained the option of not passing some of the relevant legislation to give effect to this rulebook. Furthermore, it would not have been bound to accept the ECJ’s interpretation of what the common rules meant.
  3. It would have meant the UK opting into some bits of the EU Single Market, but not all, and that precedent would have created immediate demands for exceptions from other EU members and also from Switzerland and Norway.

It does not require much political imagination to see that these aspects of the UK proposal were going to be a hard sell in the parliaments of some of the 27 countries. And if just one of them said NO to an eventual EU/UK trade deal, there would be no deal. Each has a veto.

GOVE THEN UNDERMINED THE CHEQUERS LINE

To make matters worse, a collectively responsible member of the UK Cabinet, Michael Gove  suggested that the UK might agree a Withdrawal Treaty on the basis of the Chequers approach, but later, once out to the EU, abandon it, and do whatever it liked. This would put Mrs May in a position of negotiating with the EU in bad faith. It also raised doubts that, even if the EU side accepted Chequers, the UK government could not carry it through.

DOUBTS  RAISED ABOUT THE IRISH BORDER COMITTMENTS

Gove’s intervention also cast doubt the genuineness of commitments the UK had given on the Irish border.

In a Joint Report of 8 December 2017, the UK agreed to respect Ireland’s place in the EU and all that entailed, and that there would be no hard border in Ireland. This was to apply

“in all circumstances, irrespective of any future agreement between the EU and the UK”.

When the UK declined to translate this commitment into legal language for the Withdrawal Treaty, the EU side began to wonder if the UK wanted to delay dealing with Irish border problem until the last minute, hoping to table a proposal on a “take it or leave it” basis, and that the EU would not then jeopardize the whole deal over a place as small as Ireland!

Unsurprisingly, this shifting UK approach was not accepted by the UK’s EU partners, when they met in Salzburg.

The UK should not have felt “humiliated” by this. The EU is a complex institution, with 27 different countries.

ANY DEAL WILL HAVE TO APPROVED BY 27 PARLIAMENTS

As I said the parliaments of all 27 of them will have to ratify any eventual trade deal the UK. Let us not forget that EU found it hard to ratify its trade deals with Canada and Ukraine, because of objections in Wallonia and Netherlands respectively.

But before starting to negotiate a trade deal, the UK must first agree the terms of its withdrawal from the EU.

The Irish border question is central to this.

THE HARDER THE BREXIT, THE HARDER THE BORDER

The harder the UK Brexit, the harder will be the resolution of Irish border problem.

The further the UK negotiating demand goes from continued membership of the EU, the harder it will be for it to fulfill the commitments it has given on the Irish border.

If the UK decided to leave the EU, but to stay in the Customs Union, the Irish border questions would have been minimized.  But the UK has decided to reject that, because it hopes to be able to make better trade deals with non EU countries than the one it already enjoys as an EU member.

The UK has also rejected joining the European Economic Area (the Norway option), which would also have minimized the Irish border problems, because it would mean continued free movement of people from the EU into the UK .

In each decision, Ireland was given a lower priority than the supposed benefits of hoped for trade agreement with faraway places, and of curbing EU immigration.  This was short sighted.

Future trade agreements that might be made with countries outside the EU are neither as immediate, nor as beneficial to the UK, as maintaining peace and good relations in the island of Ireland, or as  the 70 or more trade agreement the UK already enjoys as an EU member, which it will lose when it leaves.

EU immigration to the UK, if it ever was a problem, is a purely temporary and finite one.

Already the economies of central European EU countries are picking up, and, as time goes by, there will be fewer and fewer people from those countries wanting to emigrate to the UK to find work.  These countries have low birth rates and ageing populations, so there is a diminishing pool of potential emigrants.

Again, I believe that solving this, largely imaginary, EU immigration “problem” is less important to the UK, in the long run, than peace and good relations in and with Ireland .

If, as is now suggested, the UK moves away from Chequers, and looks instead for a Canada style deal with the EU, the Irish border problem will become even worse. Mrs May has recognized this and this is why she rejects a Canada style deal..

A Canada style deal would mean the collection of heavy tariffs on food products, either on the Irish Sea, or on the Irish border. Collecting them on the 200 mile long land border would be physically impracticable, so the only option would be to do it on the Irish Sea.

Either way, the all Ireland economy, to which the UK committed itself in the Joint Report, would be irrevocably damaged. The economic foundation of the Belfast Agreement would be destroyed.

CONSERVING WHAT WE HAVE SHOULD BE THE GOAL OF A CONSERVATIVE PARTY

It is time for the Conservative Party to live up to its name, to be truly conservative, and conserve the peace we have so successfully built on the twin foundations of the Belfast Agreement and the EU Treaties, to which the UK committed itself in 1998 in the case of the Belfast Agreement,  and in 1973 in the case of the EU Treaties.

A “GROSS BETRAYAL OF DEMOCRACY” ?

The UK Prime Minister, Mrs May, writes today that to have a second Referendum in the UK on Brexit would be “a gross betrayal of democracy”.

If she believes that, she does not understand democracy very well.

She seems to suggest that democrats, having made a decision, should not ever change their minds. In fact, democracy is all about creating mechanisms whereby voters CAN change their minds.

Democracy allows voters to change their minds, usually through parliamentary elections.

Totalitarian or dictatorial regimes, who do not hold regular elections, do not a have an inbuilt mechanism for changing their minds. This makes them brittle. Democracy, in contrast, is flexible.

There may be practical arguments against holding a second Referendum on Brexit, at this stage.

One could ask questions like

“What alternative to Brexit would be offered to voters, and by whom would it be offered….by the UK alone or by the UK and the EU?”

“ Might it be wiser to allow UK voters to actually experience Brexit in practice before asking them if they like it or not and want to change their minds?”

But for Theresa May to argue that reconsidering a referendum decision, by means of a second referendum,  is “ a betrayal of democracy” is just nonsensical.

CAN BREXIT TAKE PLACE WITHOUT EITHER MAJOR TRADE DISRUPTION, OR SERIOUS DILUTION OF THE EU LEGAL ORDER?

Brexit is a British decision.

It means that Britain is seeking to withdraw from a contract it made with the other EU members, on the basis of which those countries opened their markets to British business, in a way it was not opened to other countries. That was the deal.

In business, if one unilaterally withdraws from a contract, one does not normally expect to continue to enjoy all the benefits of the contract, afterwards.  One expects to have to make good some of the losses incurred by the other party.

But that is not how British public opinion sees Brexit. It IS how it is seen by the 27 partners of the UK in the EU.

This difference in perspective is at the root of the difficulties in the present negotiation.

The EU has developed, and maintained, an integrated Single Market for business because it has a single unified system for making, interpreting and enforcing a single set of rules.

The Single Market is deepening all the time and new fields of business are being made the subject of common rules, thereby opening new markets. This will not stop when the UK leaves.

Common rules are what keeps the EU together.

They derive from the EU Treaties, which is like a written constitution. It is difficult to amend. The UK, in contrast, has no written constitution, and there is no similar constraint on the UK Parliament.

So UK often looks at problems purely politically, while the EU has first to look at them legally. This causes misunderstandings. UK Ministers sometimes think that a political understanding with France and Germany will be enough to overcome its problems with the Commission, but that is not the way the EU works. France and Germany, and the Commission, are all subject to a common set of rules. This rule based system protects smaller countries and has been the secret of the EU’s success.

The recent Chequers decision by the UK Cabinet says the UK will keep to the  common EU rules for goods, but goes on to say that the

“UK Parliament would still have a lock on incorporating these rules in the UK legal order by not passing the relevant legislation”.

This is giving with one hand, and taking away with the other.

So, even if the UK and EU standards were the same at the outset, they could diverge substantially, depending on the vagaries of British politics. Ultimately the UK Parliament can do what it likes.

The UK will not be part of the EU legal order. This builds uncertainty into the proposed arrangement, and is bad for business.

This let out clause means that border controls might not be there at the outset, but might have to be reintroduced.

This is a critical issue for Ireland, where the reintroduction of border controls on the 300 mile boundary would be both provocative and impractical.

That is why the EU wants the Northern Ireland issue agreed before the UK leaves the EU.

The UK wants to take back control, but EU needs to have control too.  This point is not always understood in London.

The EU is 27 countries, and all their Parliaments will have accepted any eventual trade deal with the UK. This makes the sort of” flexibility”, the UK says it would like, difficult to obtain. Getting unanimous agreement of all EU Parliaments to a future EU trade deal with the UK will not be easy.

That was illustrated by the difficulties in ratifying recent Agreements with Ukraine and Canada, when extraneous domestic issues were used in Belgium and the Netherlands to delay ratification.

If the Commission wants a deal with the UK that will pass in all 27 Parliaments, it will have to exercise great care.

Patience will be required. Sound bites will not always be a help.

But before we even get down to detail on trade, there will have to be a Withdrawal Agreement.

80% of the text of the Withdrawal Agreement is already agreed, but 20% remains to be settled. Among the issues that are not settled is the

“backstop” to prevent a hard border in Ireland.

Here the EU has put forward the proposal that

“Northern Ireland remains in a common regulatory area for goods and customs with the rest of the EU”.

It has said it is ready to improve the text of this proposal, if the UK has suggestions to make. But such suggestions need to be within the parameters of what the EU has proposed.

This is difficult for the UK for various technical and political reasons, not least because England and Wales, but not Northern Ireland, voted in the Referendum to leave the EU’s common regulatory area.

Opinion on this in the UK is changing, but only very slowly.

The implications of a hard Brexit are only now being contemplated by most of the people who voted Leave in 2016.

In 2016, these people saw Brexit as an emotional assertion of national identity, rather than as a concrete proposal that would change their lives and livelihoods irrevocably.

I believe UK public opinion needs more time to consider if Brexit is really the best way to express their national identity, and more time to fix some of the inequities in British society that prompted people to vote Leave in 2016.

That why I have argued, in an earlier column in this paper, that the period of negotiation under Article 50 should be extended.

This could happen if the UK asked for it, but asking for it would require both immense courage on the part of the UK government, and a constructive response from the UK opposition.

It is hard to see evidence of either yet, but they could emerge if there is a crisis.

 

 

 

Brexit and the island of Ireland: the all-Ireland economy and the border question

Page 2 of 6

Powered by WordPress & Theme by Anders Norén