ANDREW FARRAN. Brexit: All in the National Interest

Jul 9, 2018

British PM Theresa May is presently holding the strategic high ground on Brexit after the day-long meeting with her whole Cabinet at Chequers last Friday. To her formerly disputing colleagues she could announce that evening:  “Collective responsibility is now fully restored”.

The outcome to be elaborated on in a 120 page White Paper this week will face detailed scrutiny at all levels of the British political establishment in the coming days. The key scrutineers will be the EU negotiating team and the hard line Brexiters both in the Cabinet and the wider ranks of the Conservative Party – in particular Jacob Rees-Moggs’ European Research Group which could upend the government party. So far they have said that on the face of it the proposed deal could be acceptable but if the details to be revealed show that Mrs May has in fact crossed her own red lines, now decidedly pink, that could be that.

Business can be seen to have influenced Mrs May’s position in recent days, thereby securing their continued support for and of the Conservative Party in government.

The EU chief negotiator, Michel Barnier, has not dismissed the UK plan  though his team had previously expressed scepticism about the earlier customs partnership idea, now reworked into the new proposals. M. Barnier is reported as saying that the EU remains ready to change its Brexit offer if Mrs May’s government shifts sufficiently on its ‘red lines’, as it appears to have done. He added: “All the models are available. Customs union, customs union plus, Norway, Norway plus. We can work on all these”.

Without getting too far ahead of the action it can be said that the hard line Brexiters, having been intimidated by Mrs May last week, are now biding their time, looking for wider cracks in the proposals and for any significant backlash among rank and file Tory voters. For any to resign now would be premature and foolish.

Meanwhile the task of selling the new proposals will soon reach a high intensity.

Essentially they are:

  1. A so-called Facilitated Customs Arrangement whereby the UK and the EU would avoid hard borders by being treated as a “Combined Customs Territory” for goods, reflecting Mrs May’s concept of a customs partnership – with the UK applying domestic tariffs and trade polices for goods intended for the UK, and their EU equivalent tariffs, etc.  for goods intended for the EU (avoiding at the same time the Irish border issue). The UK would then be free to set its own tariff and non-tariff rates with third countries, including the US and Australia, regardless of the EU.
  2. Services would not be included notwithstanding that they represent 80% of the UK economy, but they will benefit from the harmonised standards in the Rule Book (see 3. below). In this regard the position, as stated, is that “it is in our interests to have regulatory flexibility, recognising the UK and the EU will not have current levels of access to each other’s markets”.
  3. Rules on the movement of all goods including agriculture would be harmonised with those of the EU in accordance with the existing “Rule Book”,  adjusted as necessary from time to time by treaty – again avoiding the Irish border issue but possibly creating difficulties in negotiating new agreements with third countries, including the US, where respective trading standards and rules may vary widely.
  4. To facilitate the above there is to be a ‘joint institutional framework’ for interpreting the rules, operating separately in each jurisdiction. Decisions by UK tribunals in this regard would pay “due regard to EU case law in areas where the UK continued to apply the common rulebook” – acknowledging the European Court of Justice “as the interpreter of EU rules”.
  5.    Regarding migration, the deal will remove the automatic movement of people into the UK from the EU but will include a “mobility framework allowing easy access for work and study”. Reciprocal access will presumably be sought. It should be noted that the Home Secretary recently gave assurances to EU personnel living in the UK.

Initial reactions to the proposals have been cautious. Some/many have questioned whether they are workable and realistic. Some see them as intended more to bring the Cabinet together so that at the least UK negotiators can now present a unified front to the EU and do their best to achieve a win-win deal for both sides. As there is much to lose for both the incentive to be realistic and not cloud proceedings with ideological baggage is very strong.

But in case the national interest or ideological purity points in the other direction the bureaucracy has been tasked with preparing contingency plans for a hard Brexit.

We will wait and see.

 Andrew Farran is a former diplomat, law academic and trade policy adviser. Currently reporting from the UK.


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