John Bruton

Opinions & Ideas

Category: Theresa May

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.

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.

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.

MRS MAY’S SPEECH

My first reaction, watching Theresa May’s speech, was that The UK is going to put itself, and all the other EU countries, to a lot of trouble, so that it can leave EU, and then simultaneously rejoin it in selected areas.

It wants a partnership with the EU on Customs, on state aid and competition, on transport, on energy, broadcasting, financial services, atomic power, aviation,  on the enforcement of court judgements and a long list of other fields.

As an EU member today, it already has a partnership with the 27 countries of the EU on all these things. This was worked out painstakingly over 45 years of UK membership of the EU. It now wants to tear that up and negotiate a new partnership on all these different questions. And it wants to get the job done within two years.

All this is being done in the name of “taking back control”, but it looks to me that, in many areas, control is being taken back, only to be given away again immediately. A lot of work, for very little product!

Just as Gordon Brown had five “tests” for joining the Euro, which were so loose that he could interpret them any way he liked, Theresa May has five tests for an acceptable Brexit outcome, which will mean different things to different people. In fact, they sounded more like the introduction to an election manifesto, than a prism through which to measure the success of a negotiation on some of the most technical and specialist of legal topics.

Originally the UK was promising a frictionless border in Ireland. Yesterday, Mrs May seemed to retreat from that, speaking of a border that would be

“as frictionless, as possible”.

Her idea of a Customs Partnership, to avoid a hard border in Ireland, seemed like a smuggler’s charter.

She envisages the UK having different rates of tariffs on goods entering the UK, to the tariffs charged on goods entering the EU.  That is the whole point of leaving the Customs Union. She then suggests that the UK would charge the UK tariff on goods “intended” for the UK, and the EU tariff on goods passing through the UK but “intended” for an EU country (most likely Ireland).

In this way, she hopes no customs checks would be needed at the Irish border, or in Irish ports. The scope for abuse, and exchanging of goods, seems to be unlimited here.  Consignments could be substituted for one another, and there would be no check on them when they crossed the Irish border. Such an arrangement would very difficult to police, and is unlikely to satisfy the EU Customs Code.

If the EU and the UK are to have different rates of tariff,  her idea of exempting what small businesses along the Irish border from any control at all seems like an invitation to smuggle.

Presumably, Mrs May will want the EU Customs Code amended to take on her ideas. But if that is done, similar concessions will be demanded along all the other borders to which the Customs code applies, such as the EU borders in Eastern Europe. Mrs May should not forget that whatever she negotiates will have to be approved by all 27 EU countries

The most valuable test that Mrs May wishes to apply to a Brexit agreement is that it should be one that would endure, and not require constant renegotiation.

But she said things elsewhere in her speech that will make it very difficult to pass that test.

She stressed that any Trade Agreement with the EU could be changed afterwards by the UK Parliament. That is a recipe for instability. At the moment the UK Parliament cannot over rule an EU rule to which the UK had previously agreed. After Brexit, that would longer be so, and, as result, business would know that everything about any future UK/EU trade agreement would be subject to the vagaries of British politics. British politics has already forced the UK to renege on 45 years of Treaty based agreements with the EU. So a mere Trade Agreement in future will not be a solid base for investment.

Every time the UK Parliament tries to go back on something in the Agreement, there will have to be a new negotiation.

Furthermore, Mrs May ruled out the UK Courts accepting the decisions of the European Court of Justice (ECJ) on many disputed matters. The best she could say is that the UK Courts would “look at” ECJ rulings, before making their own British decisions.  That means that UK interpretations will gradually diverge from standard EU/ECJ interpretations. When that happens, renegotiation will be inevitable.  

She advocated, instead of accepting ECJ jurisdiction, the idea of an “arbitration mechanism” that would be independent of the EU and the UK. That might work for a country which trades a limited number of products with the EU.  But Mrs May herself said that she wants an agreement with the EU that would cover more subjects that any trade agreement anywhere else in the world.

An arbitration mechanism, covering the vast range of EU’s dealings with the UK, if it is to be truly independent, would soon become a rival to the ECJ. It could develop a different interpretative philosophy to the ECJ.  That would undermine the common legal order of the EU, and is unlikely to be accepted.

One of the tests that Mrs May set for an acceptable Brexit, was that it would be one that would strengthen the Union between the four “nations” that make up the UK.

But the process of Brexit itself is having the opposite effect.  In the way the referendum was set up, a majority of English and Welsh “leave” voters were allowed to overrule “remain” majorities in the two other “nations”, Scotland and Northern Ireland.

The Brexit Referendum was a crude exercise for English power, to satisfy a purely English political agenda.

There is growing dissatisfaction in the devolved Assemblies, including even in Wales, about the way Westminster is making decisions on EU related matters, that are the prerogative of the Assemblies in Edinburgh, Cardiff and Belfast.

It is good that Mrs May’s speech, at last, got into some detail in her speech. This will have had some educational value for her Party. But the text of the Withdrawal Treaty is not yet agreed, and that must be done before the substantive negotiation can begin.

But the fact that the UK has not come up with a legal text of its own, to reflect the agreement Mrs May made in December  on the Withdrawal Treaty with Michel Barnier, but is still criticising the EU version virulently,  shows that we have long way to go on this unproductive and time wasting road to Brexit

 

THREE QUESTIONS…………….

MRS MAY;    TELL US EXACTLY WHAT SORT OF DEAL YOU WANT WITH THE EU CUSTOMS UNION

 

DUP;    TELL US WHAT SORT OF AGRICULTURAL POLICY YOU WANT IN NORTHERN IRELAND AFTER BREXIT

SINN FEIN ;    TELL US WHY YOU WILL NOT  GO INTO THE HOUSE OF COMMONS NEXT MONTH TO FIGHT FOR IRISH INTERESTS ON THE NEW BREXIT LAWS

 

It is unfortunate that the United Kingdom government decided to trigger article 50 , without first working out, around the Cabinet table, what sort of relationship the UK could reasonably expect to have with its neighbours after it had left  the EU.

It is true that Mrs May presented a wish list in her Lancaster House speech. But this list was, and is, impossible to achieve because it took no account of WTO rules, and of the fact that commerce can only be free ,if the rules governing it remain reasonably uniform.

She said that, on  the day it leaves the EU, the UK will retain all the  then existing EU rules for goods and services, but would be free change them,  by Act of Parliament or by  legal reinterpretation from then on. This implies a gradual, surreptitious, hardening of the border in Ireland, as UK standards begin to diverge from EU standards.

To the extent that the UK diverges from EU standards, the UK businesses will have to apply two sets of standards, one for the UK market, and another for the 45% of UK exports that go to the EU.

Once the UK has left the EU, goods, coming  into the EU (including into Ireland), from the UK will also be subject to checking under “Rules of Origin” requirements, to see that they do not contain impermissible non UK content. For example, there might have to be checks that UK beef burgers do not contain Brazilian beef.  These “Rules of Origin” checks will involve bureaucracy, which will be especially onerous for small firms.

One study estimated that the need to apply “Rules of Origin” checks could reduce trade volumes by 9%.  The EU/ Canada trade Agreement has 100 pages on “Rules of origin” alone.

As far as imports into the EU at Dundalk or Lifford are concerned, it will be Irish, not UK, officials who will have the distasteful job of enforcing the border. Irish officials will have to check whether EU safety, sanitary, origin and other rules have been met. This is something being imposed on us, as an EU member, by a UK decision.

It will not be done cheaply. A House of Lords Committee said that “electronic systems are not available to accurately record cross border movements of goods”. If the UK government knows otherwise, it should produce the evidence…without delay.

Even if a light or random system of checking at the border or in ports is imposed, the biggest costs will have to be met by businesses, before they get anywhere near the port or the border.

The preparation of all the extra compliance documentation will deter many smaller firms from exporting at all. For example it has been estimated that the number of customs declarations that UK firms will have to prepare and present will jump from 90 million a year to 390 million once the UK leaves the EU. Irish firms will have a similar extra burden in their dealings with the UK.

The focus on the Irish border should not deflect attention from the impact of Brexit on East/ West trade. Indigenously owned Irish exporters rely disproportionately on the UK market, and their customers are predominantly on the island of Britain, rather than in Northern Ireland. The bulk of Irish exports to continental Europe transit through Britain

MRS MAY AND THE CUSTOMS UNION

Theresa May was remarkably unclear, in her Lancaster House speech, about the sort of relationship she wanted with the EU Customs Union. She wanted bits of it, but not all of it.

This would run into immediate difficulties with the World Trade Organisation (WTO). The WTO works on the basis of non discrimination, or the so called “Most Favoured Nation” principle.

This means that any concessions the EU Customs Union might grant to the UK, as a non EU member, would have to be extended by the EU to ALL the EU Customs Union’s trading partners. That is unless the special UK concessions cover “substantially all” trade between the UK and the Customs Union.  The UK will have to be either ”substantially in”, or “substantially out”, of the Customs Union.  Which does Mrs May want? She should be able to answer that question by now.

Many suspect the UK wants to leave the Customs Union so it can revert to the cheap food policy, that it had before it joined the common Market.  To prevent the  undermining of the EU Common Agricultural Policy that would flow from that, Ireland would then be obliged to collect the EU Common External Tariff on products like  beef,  milk, lamb, confectionary  and other food products crossing our  border, or arriving at our ports, from the UK.

THE DUP AND AGRICULTURE

Farmers, and investors in the food industry, need to know what sort of agricultural policy the UK will choose after it leaves the EU. Only then can Ireland know whether it will have to collect these very high EU tariffs at the border, and whether the entire Irish food industry (on both sides of the border) will have to be diverted to other markets.

The Democratic Unionist Party, which supported Brexit, and which now dispensing gratuitous advice to the Irish Government on EU matters, should tell us exactly what sort of UK agriculture and food policy it expects post Brexit.  It is now in a good position to get an answer to that question from the UK government. Its own farming supporters would like to know.

SINN FEIN VACATES THE FIELD

The DUP is not the only party that needs to examine its position.

In September the UK Parliament will begin debate on the European Union Withdrawal Bill, which will allow for UK standards of goods and services to diverge from existing EU standards, thereby deepening the Irish border.

Thanks to the abstentionist policy of Sinn Fein, there will be no Irish Nationalist MPs in  that debate able to put forward amendments  to mitigate the hardening of the border that this legislation will allow. Until this year, 3 SDLP MPs would have been there , but now, when their presence was never more necessary, the voters have replaced them by Sinn Fein MP’s, who will draw their salaries, but will stay away when decisions have to be made, leaving the field to the DUP.

Sinn Fein should remember that the Irish people, on both sides of the border, accepted the Good Friday Agreement in a Referendum  in 1998, and that removes any  “nationalist” argument  Sinn Fein might have had for not taking their seats. If Sinn Fein can shake hands with the Queen, if they can take their seats in Stormont, they can take their seats in Westminster!

There is work for them to do there now.

 

THERESA MAY’S ELECTION

Theresa May has decided to call an early election, before the practical outworking of her Brexit strategy becomes obvious to voters. She wants to be free to modify her strategy, and ,for that, she needs a bigger parliamentary majority.

She claims otherwise. Instead she says she is calling the election because Opposition parties oppose her Brexit strategy. They don’t oppose it, actually. They have cooperated with it, to a point that makes little of parliamentary sovereignty.

The only opposition party that opposes her strategy outright are the Scottish Nationalists, who take that position because that is the way Scotland voted in the Referendum. In any event, the Scottish Nationalist Party could not bring Mrs May’s government down on Brexit, unless Labour, the Liberal Democrats and, most importantly, a significant number of Mrs May’s own Conservative MPs, voted with them, which is not at all likely to happen.

Rather more bizarrely, Mrs May justifies her call for an immediate General Election on the ground that the Labour Party has threatened to vote against the final agreement she may come back with, in two years time. What does she expect? That the main opposition party would give her a blank cheque on the terms of Brexit?!

Usually negotiators actually find it useful to be able to say, when looking for a concession, that if they do not get it, the overall deal might be opposed in Parliament .  If she is to be believed, Mrs May apparently wants to give up that negotiating chip.

Mrs May ostensibly defend the sovereignty of the UK Parliament. But now she is calling an election because the opposition will not promise not to exercise their sovereign parliamentary rights.

My own sense is that none of the reasons she has advanced are the real ones for which she has sought an early election.

She is seeking an election to increase her overall majority, so she will no longer be dependent on a hard core group of around 60 Euro hostile Conservative MPs, who hold disproportionate power at the moment because the Conservative overall majority is so small.

For these MPs hostility to the European Union has become a religion, a religion which brooks no argument, and a religion for which any economic sacrifice can be justified, even the sacrifice of the livelihoods of their own constituents. Mrs May does not want to find her day to day negotiations with the rest of the EU subject to the whim of these people, by whom the slightest compromise  with the EU 27will be portrayed as a betrayal.

It is important to remember that Mrs May, like the rest of her Party, have never taken much interest in how the EU works, in its procedures and rules, and in the compromises that underlie its very existence. She has this in common with many politicians in bigger European countries, who treat the EU as a sideshow to national politics.

So, even though her Party sponsored the idea of holding a Referendum on leaving the EU, she did not give much thought to what leaving the EU might actually mean, until the last few months, when it suddenly became something real, something that was going to happen. In a sense, she and her party, are now finding out a lot about the EU for the first time, just as they are leaving it!

Her first reaction to the Referendum was to get her Party behind her as their new Leader. So she told the Conservative Party Conference last year that she would go beyond the mere terms of the Referendum.

She would not just leave the EU.  She would refuse to join the European Economic Area (unlike non EU member Norway), and also refuse to join the EU Customs Union ( unlike non EU member Turkey).  This hard line bought the temporary quiescence of the Euro hostile MPs, up to and including on the  terms for triggering of Article 50.

But now come the actual negotiations.

This is where Mrs May’s rhetoric at the Conservative Party Conference, meets the reality of a rules based international trading system. In a rules based international trading system, unpleasant compromises are essential if  you are to persuade others are to open up their markets to your exporters,  to your bankers,  to your planes,  and to your people.

In a rules based international  trading system, you cannot, unilaterally, make, interpret and enforce the agreed rules, in a way that suits only you. There has to be a common system, which involves some concession of sovereignty.

You often have to accept an external enforcer, like the European Commission or an International Court.

And you often have to accept an external body interpreting the meaning of the rules, someone like the European Court of Justice, or a Disputes Panel of the WTO.

But this is unacceptable to those who have made national sovereignty into a religion. It is unacceptable to some of Mrs May’s Euro hostile MPs, and also, incidentally, unacceptable to some of the supporters of Donald Trump.

I have been reading publications of Conservative supporting think tanks, like the Bruges Group and “Leave means Leave”, and they are discovering now, how costly it will be for the UK to leave the EU Customs Union.

The UK will have to introduce Customs controls on the goods bought and sold between the UK and the EU. This will involve checking where the goods came from, if they are properly labelled, if they are safe, and if the tariffs due have been paid. The delays will be horrendous.

Customs clearance alone will add 8% to the cost of goods arriving by sea from Ireland or the rest of the EU.

At the moment  90million customs declarations have to be checked in the UK for goods arriving from outside the EU. Once the UK itself leaves the EU Customs Union, UK customs officials will have to check 390 million documents!

By leaving the EU Customs Union,  the UK will not only exclude itself from duty free access to the EU market, which represent over 50% of UK trade, but it will also lose the benefit of Trade agreement the EU has negotiated with 60 other countries, which account for a further  17% of UK exports.

For example, since the EU negotiated a trade deal with Korea ten years ago, UK exports to that country increased by 110%. Leaving the EU means giving that up, temporarily, and, perhaps, permanently.

Mrs May is also beginning to discover that her hard line on immigration will have costs. 20% of employees on UK farms, and 29% of employees in UK food processing plants are EU nationals, who will lose their right to live and work in the UK.   When the UK tries to negotiate trade deals with countries outside the EU, like India, it will find that it will face demands for more Indian migration to the UK.

UK Airports will find themselves losing business when the UK has to leave the EU Open Skies Agreement with the United States. More US transit traffic will be routed through Dublin. The UK will also have to try to join the European Common Aviation Agreement as a separate member, if UK owned airlines are to have the right to fly passengers between EU airports. Rivals will not make it easy for them.

UK farmers and food producers will find themselves facing tariffs of 35% on dairy exports, 25% on confectionary, and 15% on cereals. UK lamb production will be hard hit.

If Mrs May wants to be able to make deals to avoid some of these bad outcomes, she will need the sort of flexibility, that her Euro hostile backbenchers would not allow her.

That is why I think she is calling a General Election now.

The strategy may backfire.

If during the election, she is forced into explicitly ruling out various possible compromises with the EU, she will end up with LESS flexibility that she has now. .

A lot will depend now on what the Conservative Party manifesto says about how the practical problems of Brexit will be tackled. Will it deal with these issues specifically at all?  Will Theresa May be able to get through to 8 June relying on reassuring generalities about problems like customs delays, bureaucracy, higher air fares, the end of farmer income supports, migration policy after Brexit, and the loss of access to markets for British exporters?

Given that Mrs May is avoiding taking part in debates she may be able to avoid these questions, but six weeks is a long time in politics!

WHAT IS THE ALTERNATIVE TO A HARD BREXIT?

I believe  conditions can be created in which the UK voters could decide not to leave the EU at all.  Ireland should work to create those conditions. The terms for Brexit set out by Mrs May will  do incalculable damage to this island, politically, emotionally and economically.  We cannot simply wait for this to happen. While seeking to mitigate the effects of Mrs May chosen hard Brexit, we must  also do everything we can to ensure that there is no Brexit.

Apart from a few open questions, Theresa May has said what she wants. She wants out of the single market, out of the customs union, and “control” over immigration

The open questions she has avoided so far are about the financial terms of the divorce, the status of EU citizens living in the UK and vice versa, and two aspects of a future trade agreement (if there ever is one), namely arbitrating disputes, and  third country imports getting into the EU via the UK.

It is unlikely that the Article 50 letter, she will send to Donald Tusk next month,will us  tell much more about the UK negotiating position than the Lancaster House speech did. So it is time now to start thinking about how the EU will respond to Mrs May’s letter.

On the present schedule, the European Council would meet in April to agree the orientation it would give to the EU negotiators for the discussions with the UK that would start in June. These orientations would be agreed by consensus, so every EU head of government would have to be satisfied.  For Ireland, this April European Council meeting is potentially the most important European meeting a Taoiseach will ever attend.

In working out the orientation to be given to the negotiators, the crucial thing is for the European Council  to work out what would be it’s ” best alternative to a negotiated agreement” (BATNA). It is important to have an alternative ready because there is every possibility that no agreement will be reached within the two year time frame for negotiation, and ratification, of a withdrawal agreement.

Mrs May has  said that , for her , no deal at all  preferable  to a bad deal . Her BATNA, so to speak, is no deal at all.

“No deal” would mean the UK simply crashing out of the EU overnight, sometime before the end of March 2019.  This “no deal” scenario would be an overnight halt to flights, to trade and to commerce. There would be immediate, massive currency instability.

From the point of view of pure negotiating tactics, maybe it not surprising that Mrs May would threaten “no deal”.   But to do so, in the absence of a well crafted fall back position, is something  the UK cannot really afford.  It vindicates Tony Blair’s description of the UK government as “not driving the (Brexit) bus”, but rather “being driven” by partisan and ideological forces it has not tried to control .   In the absence of a real alternative to a hard Brexit, it  is on auto pilot heading towards a cliff.

The EU country that would be worst affected by the UK crashing out of the EU, with no deal  is, of course, be Ireland . So Ireland must use all its imagination and ingenuity to see if a creative way out for the UK and the EU can be found.

SHOULD THE EU OFFER UK VOTERS ANOTHER OPTION?

If the UK government is unable or unwilling, because of domestic politics, to work out a responsible “best available alternative to a negotiated agreement”(BATNA), then the EU side should do so for it.  It should adopt it alongside its line by line response the UK’s negotiating demands

Having a BATNA, would also strengthen the EU’s negotiating position. It would provide something with which an emerging deal could be compared. It would also provide a basis on which the UK could reconsider its decision of 23 June 2016, if it wants to do that.

As Tony Blair said, UK voters have a” right to change their minds”. After all politicians are allowed to change their minds, so why not voters?   If  UK voters, in a referendum,  sent their government on a mission towards Brexit, it would be reasonable that the same voters, rather than Parliament, tshould adjudicate on what will have been achieved (or not) by their delegates.

If UK voters ever do change their minds about Brexit, it will happen slowly and incrementally. Parts of the Brexit scenario, obscured during the Referendum, will become clearer during the negotiation. The unavoidable interconnections between EU freedoms, and EU rules, will emerge.   For this to happen, it will be in the EU side’s interest to ensure that there is maximum public understanding of the unfolding negotiation. Transparency will work in the EU’s interest.  A running commentary is exactly what is needed in the interest of public education!  

If the alternative to EU rules, is no rules at all, citizens, in both the EU countries and the UK, may come see EU membership in a different light. They may, for the first time in many cases, see the EU as something that simplifies their lives, rather than the reverse.

In my view, the “best available alternative to a negotiated agreement”, BATNA, that the EU side should adopt is an offer of continuing UK membership of the EU  broadly on the basis that the UK  was a member in 2015,  before David Cameron’s ill fated “renegotiation”.  

The 2015 terms were generous to the UK. They allowed it to opt out of the euro, of Schengen, of Justice and Policing cooperation, of the Stability and Growth Pact, and of  the justiciability in the UK of the European Convention. Furthermore, the UK itself had also decided, without Brexit, that it would have a referendum of any new EU powers. In that sense the UK was already having its cake, while eating it, before it ever decided on Brexit. These 2015 terms should be left on the table by the EU side, but without the unjustifiable UK budget rebate.

Of course, at this stage, the UK would reject such an offer out of hand.  But, as the inevitable consequences of  Brexit become clearer, UK public opinion might begin to see merit in it, particularly when it is compared with the costs of  simply crashing out of the EU, overnight,  with no deal at all, which is Mrs May’s fall back  negotiating scenario.

The resistance to keeping such an offer on the table is more likely to come from some existing EU member states. Some members will point to the UK’s insatiable demands, when it was a member , for opt outs, rebates, and exceptions.  Arlene Foster’s analogy about feeding crocodiles may come to their minds. They will recall General de Gaulle’s original veto of UK membership, and his foresight that the UK would never settle in as a member. They might also argue that offering the UK a way back, after it has triggered Article 50, might encourage others to try it on too.  

 But if they sit back and think about it, they will, I believe, conclude that a UK that inside the EU, is better for the EU, than a UK that outside. This will be so even if a trade deal is eventually concluded with the UK. Keeping the offer of resumed UK membership on the table would be good politics, and good economics for the EU.

The terms of the Lisbon Treaty do create some difficulty for this approach.

Article 50 (3) says a country that has sought to leave the EU under that article will be automatically excluded from the EU two years after it has triggered Article 50 unless the EU side “unanimously decides to extend the period”.

Article  50 (5) says that, if a state, that has withdrawn for the EU, asks to rejoin, it has to do under article 49, where the application would have to be ratified by all existing members.

Others may argue that the UK cannot withdraw its Article 50 letter once it has sent it.  This is a matter for the European Court of Justice to decide, but article 6.8 of the Vienna Convention on treaties explicitly allows revocation of a notice of intention to withdraw from a treaty.

These problems are real, but not insurmountable. A political declaration by the EU heads of Government in April  in favour of facilitating an eventual  UK resumption of EU membership, on its 2015 terms minus the budget rebate , would create a realistic basis for comparison in the debate  about Brexit that, in a sense  is only  now starting in the UK.  

 

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