ANDREW FARRAN. Brexit: The bus can be avoided after all!

Oct 25, 2018

It had been expected that Prime Minister Theresa May would be thrown under a bus, figuratively speaking, this week, next week, or sometime soon. If this has not happened it would be that no potential usurper has a plan that could secure passage through Parliament. Meanwhile, it is said, she is staring down her political opponents as might Boudicca in similar circumstances!

If Parliament cannot decide to the country’s satisfaction there were 700,000 people demonstrating on the streets of London last weekend who believe it is now for the people to decide, by way of a second referendum.

Indecision or crashing out would be bad and exceedingly disruptive, not just for the UK but for the EU itself, and for its longer-term prospects of internal cohesion. Already Poland and Hungary are disgruntled over their handling by Brussels, and Italy will be next to express its dissatisfaction over the rejection of its national Budget by the bureaucrats in the EU Commission.

While the EU negotiators are reluctant to make Britain’s withdrawal any easier out of concern that others may be encouraged to do the same on similar terms, there is now a fine line between that and avoiding a process that could destabilise its institutions across the board.

Prime Minister May has told Parliament that 95% of the deal has been negotiated and there is little more to attend to apart from the Irish border question – a bit like saying that all’s well with the patient except that it has stopped breathing. The iron lung that will enable the patient to breathe is a free-ranging trade agreement in goods (if not services) – with functional add-ons. That would obviate the need for harsh border controls: a type of agreement that is no more than what most trading countries seek these days in their trading relations. It would also allow the UK and the EU to adjust their trade and tariff schedules within the WTO and thereby avoid doing unnecessary violence to that global arrangement.

While this would be less than the hard Brexiters are seeking – which is the return to a British Empire – it would enable business and trade to continue throughout the Continent without interruption of the kind feared if Britain were to crash out. It is believed the Government could get Parliamentary approval on these lines if mindful of doing so.

If the Government will not modify its so-called Chequers plan to some degree it will suffer further resignations and a public backlash. The other certainty is that if all parties, within both the Government and the Opposition, do not adjust their positions Parliament will be in a stalemate situation with the only options being a second referendum or a General Election. It is believed that a General Election would change the government, so the Tories would risk losing power now instead of holding on to power until 2022 – unless of course the Brexiters were to upend their own party on the chance that a referendum would confirm a Brexit vote. The benefit of the latter would at the least ensure that a majority of the British people would have known what they were voting for and where that might lead, which cannot be said was the case in 2016.

Where would failure now leave the EU over the interim, assuming that it would not hold the UK to its Article 50 treaty activation and declare Brexit a fait accompli? In the midst of President Trump’s trade wars that would be a consequence of the worst kind for all parties. Britain would be left to negotiate its admission to the WTO – it is not an original party as it came to the WTO by virtue of the EU’s membership. And that would take several years to achieve while all parties (including Australia) were satisfied with the concessions granted inter se. In other respects, laws and rules that govern relations between the UK and the EU would be held in abeyance until renegotiated, resulting in the anticipated disruption all round.

In the face of this will common sense prevail? The EU has offered Britain an extension of time for the transition period after March next year, and if there has been agreement that their future trade relationship should be based on free trade principles within a common area, this would overcome the Irish border issue (no more talk of backstops) and allow the Brexiters to claim their Brexit – that is, no longer being a vassal state governed from Brussels!

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

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