ANDREW FARRAN. Brexit: When is a horse not a horse? When it is a camel.

Nov 15, 2018

This note was prepared following a five hour emergency Cabinet meeting last night accepting the deal with the EU and a brief statement without details by the British PM, Theresa May, declaring that the draft Agreement was the best deal possible, was in the best interests of the British people, and better than no deal. Such detail as we have at this stage is based on well informed leaks to the British media.

So it came to pass that a clean Brexit was beyond reach – or so it now appears.

At the Lord Mayoral banquet in London just a few days ago Prime Minister May was still asserting that the British people should know “that I will not compromise on what people voted for in the referendum”. She went on: “Any deal must ensure we take back control of our laws, borders and money. It must secure the ability to strike new trade deals around the world. And it must also be a deal that protects jobs, our security and our precious Union.”

This was being said amidst the concluding stages of the Brexit negotiations which had been at a virtual stalemate since they became serious eighteen or so months ago. But will a 500 page draft ‘Agreement’, together with a 15 page outline of the UK’s future relationship with the EU, contain the vital element that will break that stalemate while remaining true to the Prime Minister’s categorical promises?

Most unlikely. An unsupervised open 300-plus miles land border between two separate trading economies is a practical impossibility. However the border is coloured the two economies must remain in synch. To get near to that it is proposed that the whole of the UK will remain pro tem in a de facto common market with some deeper commitments for Northern Ireland. There is no certainty that this fix will not become indefinite. Which would mean that even after Brexit the UK will be required to observe EU standards and regulations and would not legally be free to negotiate separate trade agreements with third countries as the external borders of a common market must remain common throughout.

This harmonisation requirement will involve regulations and standards on the environment, labour, social policy, and industrial and agricultural products (including fisheries) generally, as determined by the EU. The EU was determined to avoid giving the UK more favourable treatment than that enjoyed by its remaining 27 members,

Even if the de facto common market were to morph in to Free Trade arrangement that would inevitably revive the insoluble Irish border issue all over again. As once the UK had entered into trade agreements with third countries, unless allied with the EU, the border status would, by definition, have altered. Furthermore, because the UK would be functioning as a separate country it would need to clarify its status within the WTO and obtain agreement or acceptance of its adjusted tariff and quota schedules with the EU and those entered into with other WTO partners. These constraints would inhibit the scope of a free trade agreement with Australia.

So how might the Brexiteers be responding to this? Indicative of the expected backlash, as reported in the London Times, is Jacob Rees-Mogg, leader of the European Research Group of Tory MPs.:

White flags have gone up all over Whitehall. It is a betrayal of the Union,” he said. “If what we have heard is true, this fails to meet the Conservative Party manifesto and it fails to meet many of the commitments that the prime minister makes…It would keep us in the customs union and de facto the single market. This is the vassal state. It is a failure of the government’s negotiating position, it is a failure to deliver on Brexit and it is potentially dividing up the United Kingdom.”

Iain Duncan Smith, the former Tory leader, said that if the reports about the backstop were true Mrs May’s days were numbered. “The cabinet can’t function, and if the cabinet can’t function then neither can she,” he said. David Davis, the former Brexit secretary, called on cabinet ministers to resign rather than accept a deal that would leave Britain facing “imprisonment in the customs union”. “Cabinet should stand up, be counted and say no to this capitulation,” he said.

Most ominously for the prime minister, the Northern Ireland DUP came close to urging Tory MPs to oust Mrs May. Nigel Dodds, deputy leader of the DUP, which props up Mrs May’s minority government, said that the deal as reported would leave Northern Ireland “subject to the rules and laws set in Brussels with no democratic input or any say”. Arlene Foster, the DUP leader, said a deal that erected new trade barriers between Northern Ireland and the rest of the UK would weaken the Union. “No unionist prime minister could argue that such a deal is in the national interest,” she said. “Without a clean exit clause, the UK would be handcuffed to the EU with Brussels holding the keys.” – the above from The Times, 14/15 November.

Assuming the government doesn’t collapse (and Mrs May had been going one by one to her Ministers to keep them on board in the ‘national interest’), and assuming the negotiated package will be accepted by each and every other EU member, the immediate next step will be to get Parliament to give ‘meaningful agreement’ to it without amendments. The chances of that would seem remote, though defections either way with Tories and Labour, or rather with Remainers and Leavers, cannot be excluded. Present figuring is that the government may be some 20 votes short. Senior ministers who positions remain in serious doubt are future party leaders Michael Gove and Sajid Javid. The biggest risk for the government from a defeat in Parliament is that this could lead to a General Election and hence a Labour Government. Labour is opposed to the draft Agreement.

There are ongoing time limits for all this if the Brexit date of 29 March next year is to be met. The two-year transition period post-Brexit figures in the calculations, to deal with practical difficulties, particularly the end point of the ‘temporary’ continuation of the de facto common market. There is a proposal that this should be arbitrated by a joint panel or commission consisting of two members from each side with one outsider in the middle. The UK is determined that no purely EU institution should have a role in this.

If none of the above works out or if this becomes very apparent at an early stage the options would include, as noted, a General Election which would kick the whole Brexit can down a very rocky road; or a 2nd Referendum with the EU’s agreement that were the outcome to be to remain the present activation of Article 50 of the Lisbon Treaty would be withdrawn and annulled. Frankly that would be a better outcome in those circumstances. Meanwhile the residential status of respective nationals in the other countries is being guaranteed.

The alternative to the draft Agreement as it stands is a ‘no-deal’ exit for which contingency arrangements are already well advanced given the huge disruptions that outcome would bring on, including severe severance to key industrial supply chains and chaos at British ports and airports and on its highways. Whatever, after all this, it is likely that Britain would never be quite the same again.

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

Click to access 14_November_Joint_Statement.pdf

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