ANDREW FARRAN. Brexit: Facing the Brexit cliff even when a viable path beckons

Nov 26, 2018

The UK is facing its Brexit cliff and will only have itself to blame if it stumbles over. The EU has done its best to accommodate UK requirements but has now lost patience. No renegotiation is in prospect. However a path to a mutually beneficial modus vivendi is now clear if the UK will take it.

The hard won Withdrawal Agreement along with the Political Declaration setting out the framework for the future relationship has been accepted by the EU and offers a practical, balanced and orderly transition for the break and a pathway to a mutually positive future.

To leave without an agreement would be so disruptive of trade and commerce, to existing citizens’ rights, and to the established 45-year core of the UK/EU connection, that the consequences would be akin to a wrecking ball. Brexiteers still lightly dismiss this prospect as an exaggeration, an attitude on their part  of gross irresponsibility which would within a year see any government party responsible for those consequences destroyed for a generation. That is the situation facing Prime Minister May as she awaits Parliament’s decision on the withdrawal. Indeed she has gone over their heads this weekend by writing a personal letter to the British people pleading for their support of the Withdrawal Agreement and the Political Declaration in the national interest. She sees the Brexit withdrawal as now offered as a “moment of renewal and reconciliation for the whole country”.

While there are still unresolved issues such as the Irish border and shared fisheries in coastal waters, the only option now precluded is for the UK to reverse course and remain in the EU – having triggered withdrawal under Article 50, which is irrevocable. A second Referendum would therefore be pointless. Any argument about the legality of that would have to be determined by the European Court of Justice, the very body that the UK has emphatically rejected.

If despite reason, patronage and strategic use of the carrot – peerages, knighthoods, preference for favoured pieces of legislation, for example – and the bluff of the hard Brexiteers being called, Parliament were to reject the Withdrawal Agreement in the first instance, it could come back again, or with an alternative government proposal (without amendment) for moving forward, within 21 days of the first rejection. Either way, where might  that leave the government and the country if the EU refused to reopen negotiations, as would be expected? As noted above, in chaos and with massive disruptions.

The government would have to scramble after  ad hoc, indeed emergency measures to keep the economy going and the people assured of their jobs and living conditions.

However assuming Parliamentary acceptance of the Withdrawal Agreement the choice to be made and negotiated before 2020, or at the latest by 2020 (if extended time were allowed), is whether the UK should settle for “a comprehensive free trade area encompassing  wider sectoral cooperation with the EU . . . where it is in the mutual interest of both parties  . . . underpinned by provisions ensuring a level playing field for open and fair competition” – to quote from the Political Declaration.

Meanwhile, until then, the rules of the Customs Union will prevail – in a single customs area – in order to avoid the need of a hard Irish border. That situation (the Back Stop) will continue until 2020 in line with Union rules in relevant areas. Thereafter its continuance will depend on a subsequent agreement that establishes alternative arrangements for ensuring the absence of a hard border – a distance of some 500 kilometers – on a permanent footing. In that regard the parties envisage ambitious customs  measures “making use of all facilitative arrangements and technologies” for its achievement. The 1998 Good Friday Irish Agreement will maintain a constant presence. Only time will tell whether there is ‘a cart before the horse’ factor in the Irish issue, that could lead the UK back into a common market relationship with the EU, or otherwise to a possible political break up in Ireland itself. That is where politics leads process in such cases.

Nonetheless, getting to March 2019 offers the UK new opportunities to negotiate for the future and after 2020 to enter into independent trade and economic relations with third countries – one of the principal objectives of the Brexiteers. A situation too that Australia might look forward to.

Mention has been made in this regard of the UK falling back onto WTO trading terms. Not so easy at first as the UK is not a member of the WTO in its own right (until now under the umbrella of the EU) and would have to apply and settle its schedule of trade and tariff concessions with the wider membership – some 160 nations. This would include trade in services, agriculture, trade related investment and trade related intellectual property, in addition to regularising its forthcoming unique free trade arrangements with the EU (pursuant to Article 24 of the GATT).

All this could take most of the two year transition period provided for in the Withdrawal Agreement but it would at least provide an operational basis once separation from the EU was underway.

These requirements would not mean that everything comes to a standstill while they were being settled as notification of intention and interim provisional arrangements would themselves allow trade to proceed ad hoc pending finalisation.

The larger question over the next two years is whether the UK will eventually settle into a closer customs arrangement with the EU without the additional obligations now rejected. This is unlikely on two grounds: that the British people would regard any such arrangement as a faux Brexit; and the EU would certainly reject it because it would give the UK obligation-free benefits not shared with the other EU members.

The saga goes on but there is now a clear pathway around disaster. That in itself would be a huge achievement in the circumstances.

Andrew Farran is a former diplomat, law academic and trade policy adviser.


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