As we rapidly approach the final showdown on the Withdrawal Agreement, it’s worth recalling what the problem with the backstop is.
At a visceral level, it really is about how we see our country. Are we going to keep the United Kingdom together? And what sort of trading country do we want to be once we leave the EU?
The United Kingdom as a whole gave notice under Article 50 that it was leaving the EU. That’s how it has to be under EU law: only states can be members. The EU has no legal basis at all, under the Treaties, for requiring that one part of the departing state be treated differently from the rest.
Yet we have acceded in that requirement without demur and the Withdrawal Agreement provides that Northern Ireland will be treated differently from the rest of the United Kingdom. Some say that this is because the Good Friday Agreement demands a different treatment and that it “trumps” the UK’s legal right to leave the EU under Article 50.
I have given my own views on the core issues in Ireland here. Our Government could have argued that there was hardly a word about borders and trade in the Good Friday Agreement and that it could be made perfectly consistent with our departure from the EU. The Government could have pointed out that, when Ireland ratified the creation of Article 50 in the Lisbon Treaty, it entered no reservation or objection that it might be inconsistent with the Good Friday Agreement – perhaps because it isn’t. As far as I know, these arguments were never made: we accepted that Northern Ireland had to be treated differently.
Now Northern Ireland is indeed different in one important respect and that is that its constitutional status within the UK is subject to the Good Friday Agreement, an international treaty that both recognises that it is fully part of the UK and makes provision for it to leave the UK and become part of the Republic, subject to a separate referendum in the two parts of the island of Ireland. In effect that provides the people of Northern Ireland with a guarantee of no constitutional change without their consent. It also means, as the Irish Taoiseach said at the time, that the decision on Irish re-unification is no longer one for the British government.
I have no doubt that the British government will and must adhere to that binding commitment. But we should bear in mind that it has two elements: the people of Ireland will decide if there is to be constitutional change; and the people of Northern Ireland have a veto on it, solemnly, through a referendum. The Withdrawal Agreement is heavy with declarations that it does not involve constitutional change in Northern Ireland. But this is like a burglar leaving a note in your ransacked sitting-room to say that he hasn’t burgled you. It doesn’t make it any less of a burglary. And the fact is that major constitutional change is being imposed on Northern Ireland with only opinion poll evidence that the change is acceptable. The people of Northern Ireland get no say and all but one (Lady Hermon MP) of their only functioning elected representatives are opposed.
And the constitutional change being imposed on them is significant. They will, under the backstop, be subject to the direct effect of EU law with no representation and a border will be erected in the Irish Sea going way beyond the plant and animal health checks that currently operate, putting Northern Ireland firmly in the EU’s economic sphere and outside that of the UK.
We will not therefore be leaving the EU together, as a single country, as we are entitled to do under international law, but in two broken bits, Northern Ireland and Great Britain.
But this backstop may never come into effect, surely. And the EU assures us it is temporary (but they won’t re-open the text to commit to that) while we sort out our future relationship. In fact no: the backstop as drafted is effectively permanent and it determines everything about the future relationship.
That is because the Withdrawal Agreement is explicit that the Irish Protocol stays fully in place “unless and until” it is replaced. Replacement is contemplated of course, in the form of a new trading relationship between the EU and the UK, but that new relationship will require assent from all EU member states, including Ireland.
So imagine if Ireland said, as is very likely, that they wanted the special economic status that Northern Ireland has in the backstop rolled over into the new trading relationship. Without that they’d veto the future trade deal. The UK could say no, and do without a formal trade deal. But then the backstop would remain in force, because it wouldn’t have been replaced. So if we agree to the demand, Northern Ireland retains its special status. And if we say no, Northern Ireland retains its special status. It’s the perfect EU snooker. Who would sign that?
So much for keeping the United Kingdom entire. But how does the backstop determine our future trading relationship, not merely with the EU, but with the world?
The impulse to maintain the Union is strong in the Conservative Party and not at all absent in other parties represented at Westminster. Mrs May and her team clearly decided at some stage that the economic severance between Northern Ireland and Great Britain would be too stark if the backstop kept the former in the EU economic sphere while the latter became an independent trading entity able to strike its own deals around the world: the full panoply of EU border controls at Larne, on UK sovereign territory, wouldn’t look good. So she persuaded the EU, somewhat against their will, that in the period when the backstop applied, Great Britain too would have a special status: not quite as fully under EU law as Northern Ireland, but in a basic customs union.
Confusingly (and the confusion may have been deliberate) she dubbed this proposal the “backstop to the backstop”, later shortened to “backstop”. So when the Government uses the word, it can mean one of two things or both, as the mood takes them. And it is probably true that many Conservative MPs, when they object to the “backstop”, are more fussed about this separate relationship between the EU and Great Britain than they are about the special status imposed on Northern Ireland.
This basic customs union for Great Britain is, in the eyes of the EU, definitely temporary: it was a concession they never wanted to grant. Both they and the UK expect to see it replaced in the future relationship. But with what?
It could in theory be with a Free Trade Agreement modelled on that signed by Canada. The EU has offered this (though it wouldn’t include Northern Ireland). It could be a much closer and subordinate relationship, similar to that between Norway and the EU. It could be as distant an economic relationship as that enjoyed by Moldova. In fact the EU has a whole suite of off-the-shelf models from which it has been inviting us to select for the last year.
The Government has declined to make that selection, partly because to choose is to divide your own followers, but also because selecting a point on the spectrum between “close and subordinate” and “distant but free” exposes the fundamental sacrifice of UK sovereignty in Northern Ireland.
The Government accepted early, and certainly by December 2017, that the decision as to what constituted a “hard border” in Ireland would be made by the EU and has spent the time since trying to pretend that this doesn’t oblige the UK as a whole to choose between maintaining its economic integrity and having an independent trade policy. That is the nub of the obfuscation and mistrust in which the Government has covered itself.
But behind the smoke, the Government, in agreement with the EU, has set a direction for the future relationship that resolves that choice at some mid-point between the two extremes. The special status of Northern Ireland, in the EU Customs Union and in large parts of the Single Market, will be set forever if we sign the Withdrawal Agreement. And to disguise the severance that creates in the economic integrity and sovereignty of the United Kingdom, Great Britain will enter some form of permanent Customs Union, shorn of any substantive ability to make trade deals and willingly subject to a broad array of EU law and regulation with no say.
This is not Brexit. Disruptive though it may be, we cannot go ahead from this point. We cannot sign the deal as it stands. The Irish backstop must go, or be rendered time-limited or terminable at the sole discretion of the British government. If the Attorney General cannot negotiate text (with the same legal status as the Withdrawal Agreement itself) that achieves one of those outcomes, then we need to take another path. That can only be fulfilling our obligations to British democracy and leaving with No Deal.
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This past week has sadly brought further damaging rhetoric in the Brexit process and some who ought to be statesmanlike have been anything but.
This is surely a moment for statesmanship and for finding a way through the current impasse. We must calm things down and focus on developing a common sense solution to Brexit and the Irish border question in particular. In this context I welcome the visits of both the Prime Minister and the Taoiseach to Belfast and the meeting between both leaders in Dublin: this is the kind of engagement and leadership that is needed to help find a sensible way forward.
I recognise that the UK and the Irish Republic do not agree on Brexit itself and that many in Ireland feel hurt by the decision of the UK to leave the EU. Nevertheless, it is important we all respect democratic decisions of this nature, even when we don’t agree with them. Undoubtedly, the last two years have seen damage done to the three sets of relationships that formed the core of the Good Friday/Belfast Agreement.
The absence of the political institutions, including the Assembly and the North-South Ministerial Council, has been to the detriment of all of us. Just think how differently we might have handled this very difficult situation if such institutions had been in place to provide a forum within which Belfast and Dublin could engage and take a more considered view on all of this. Instead, the politics of cooperation has been replaced by the old ways of megaphone diplomacy.
However, we are where we are and leaders on both sides of the border have hitherto shown a remarkable capacity to overcome enormous challenges in the peace process to find our way to the common ground. In the remaining weeks leading up to 29th March, we must do so again. Whilst it is London and Brussels who take the lead in negotiations, I believe that Dublin and Belfast can play a constructive role in helping to find the solutions.
We can begin by recognising that we already occupy significant common ground.
We all agree that the need to protect the peace process and the political and institutional arrangements of the Good Friday, St Andrews and Stormont House Agreements is vital.
Secondly, none of us want a hard border on the island of Ireland or the creation of a new border in the Irish Sea. Both the Republic of Ireland and Northern Ireland do a substantial amount of trade with Great Britain as well as with each other. The Common Travel Area ensures the free movement of people across the islands and is accepted by the EU. Now we need to find a sensible solution to ensure a similar approach on the smooth movement of goods. We in the DUP are of the view that a pragmatic approach can deliver an outcome on customs and trade that does not fundamentally undermine the EU single market or the UK single market.
Thirdly, both countries want to avoid a ‘no-deal’ outcome if possible as we recognise this could have significant implications for the short- to medium-term economic stability and prosperity of both parts of the island. Building stability and prosperity goes hand in hand with building peace.
For us, the primary problem with the draft Withdrawal Agreement is the backstop. It is not only the DUP that has concerns about the backstop and our opposition to it has been supported by many from all parties across the House of Commons.
On two occasions now, the House of Commons has voted decisively to reject the backstop in its current form and to call for legally-binding changes to these potentially harmful proposals. Our position on the backstop is also supported by other unionists like Nobel Peace laureate Lord Trimble, who has said that the proposals have the potential to “turn the Belfast Agreement on its head and do serious damage to it.”
Lord Trimble is in the process of taking legal action to challenge the legality of the backstop and his case is supported by leading experts on the Good Friday Agreement such as Professor Lord Bew. For such key architects of the Good Friday Agreement to raise serious concerns about the damaging nature of the proposed backstop must surely encourage the Taoiseach and others to pause and consider other options which are capable of commanding a wider cross-border and cross-community consensus.
If the current impasse between the UK and EU over the backstop results in no-deal then it will further damage relationships between Northern Ireland and the Republic and undermine the prospects for restoring the political institutions. The absence of these institutions over the past two years has seen a re-polarisation of attitudes on both sides in Northern Ireland.
In my opinion, securing a deal on Brexit that is broadly acceptable can only improve the prospects for restoring the institutions. It may suit Sinn Fein to have a chaotic situation, but it surely can’t be in the interests of anyone else. Sinn Fein has tried to exploit the uncertainty over Brexit to raise the border poll issue, hoping to force a referendum in the near term. This is, of course, a party that was fiercely opposed to Ireland’s membership of the EU and sought to vote down each successive European Treaty. Clearly, Sinn Fein is self-serving, and its claim to act in the wider interests of the ‘Irish people, north and south’, is bogus.
The consequences of a no-deal outcome will undoubtedly impact on the economies on both sides of the border, with their heavy dependence on the agri-food sector. InterTrade Ireland commissioned the Economic and Social Research Institute (ESRI), an Irish think-tank, to conduct an analysis of the impact of Brexit on the Irish border. ESRI looked at several different scenarios, including one where trade between Ireland and the UK would be based on WTO rules. The resulting imposition of tariffs and non-tariff barriers in this scenario could result in Irish trade to Great Britain falling by 12%, British trade to Ireland falling by 6%, Irish trade to Northern Ireland falling by 14%, and Northern Irish trade to Ireland falling by 19% – resulting in a total reduction in cross-border trade of 16%.
Agri-food in particular is a sector that has expressed concerns about no-deal. A study of the impact of a no-deal Brexit on the EU’s agri-food industry has claimed that beef and cheese exports from Ireland to the UK could collapse by up to 90% with the loss of over 3,500 jobs. No amount of preparation by any government can nullify the significant economic implications outlined.
Additionally, a further fall in the value of sterling in a no-deal scenario would worsen the outcome for Irish exports to Great Britain and Northern Ireland. In this scenario, Irish trade to Great Britain would fall by 20%, British trade to Ireland would remain broadly similar (at +0.3 %), Irish trade to Northern Ireland would fall 21%, and Northern Irish trade to Ireland would fall 11% – so there would be a total fall in cross-border trade of 17%.
Despite these stark statistics, there are some who seem determined to impose the backstop. Yet the Withdrawal Agreement and backstop in their current form have been roundly rejected in the UK Parliament because they could lock us indefinitely into an arrangement that undermines the economic integrity of the UK. The backstop is designed to prevent a hard border but could ultimately result in no-deal and actually compel the EU to impose a hard border in Ireland.
Having been an MP for over 20 years and in frontline politics since the early 1980s, too many times have I seen politicians become wedded to an idea and intent on implementing it, even when they are aware of the dire consequences. Now is not a time for brinkmanship but for leadership.
I am convinced that there are better solutions than this. Whilst I am not going to be prescriptive in this article about what they may be, I am aware of several ideas, including the ‘Malthouse Compromise’, that are surely worthy of serious consideration. If the political will is there on both sides, I firmly believe we can find a solution.
The people of the United Kingdom voted by a majority to Leave the European Union. Despite this, the leadership of the EU and some in the UK have sought to frustrate the will of the people and to make it as difficult as possible for our country to Leave. The indefinite nature of the backstop would harm the constitutional and economic integrity of the UK.
The EU leaders have asked Parliament to state clearly what we want. That answer is now clear and the EU must address British concerns about the backstop if a no-deal outcome is to be avoided.
If the EU truly want to avoid harm to the peace process and to protect the political arrangements established under the Belfast/Good Friday Agreement, then they need to take account of unionist concerns as well as those of nationalists, otherwise, as Lord Trimble has said, they violate the core principles of the Agreement.
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“If things go very wrong it will look like it looked 20 years ago. It would involve customs posts, it would involve people in uniform and it may involve the need, for example, for cameras, physical infrastructure, possibly a police presence, or an army presence to back it up.”
So said Irish Taoiseach Leo Varadkar on Bloomberg during the recent World Economic Forum in Davos.
Over the past few days, the Irish Government has been scrambling to play down those comments. In fact, our Minister for Foreign Affairs and Deputy Prime Minister, Simon Coveney, attempted to frame these ill-thought words as anecdotal in order to remind people what things were like before the peace process was finalised. But these comments unnecessarily antagonise our neighbours and jeopardise co-operation going forward; there is no explaining them away.
In a time of polarised politics and social upheaval, the leader of my country shouldn’t be making comments in jest about The Troubles in the North which resulted in the death of over 3,500 people. It is not appropriate, nor is it wise, to be smiling and joking on camera while thousands of people on the island of Ireland face an uncertain future.
The Taoiseach should recall the help we get from the UK’s armed forces. When Russian aircraft regularly enter controlled Irish airspace without their transponders on. it is the Royal Air Force that scramble jets to monitor the risk. So, as an avid member of the European Union that claims to be “United in Diversity”, why does Varadkar see it as acceptable to make a call to arms? Is it ironic or moronic?
Furthermore, the draft Withdrawal Agreement currently on the table proposes internal borders that directly contradict and undermine the integrity of the Good Friday Agreement. There is work to be done, and we should work together. The assumption of a “stronger together” EU that works for us, not against us, may not be true in this instance. Let us segue to the story of Sir James Dyson to shed light on why we need to co-operate with our neighbours going forward.
Over the last week or so, the media in Ireland and the UK has been awash with criticism of James Dyson for moving his company’s headquarters to Singapore. In fact, it was met with raucous indignation by most media outlets as it was seen to be in direct contradiction with Dyson’s support of Brexit. This is either a simple assumption or a convenient opinion. Dyson has simply identified the shift in global trade and economic power away from the West – something the UK will soon be free to exploit on their own.
The reality is that the 21st century will see Asia increase in its ascendancy. During the first decade of this century, a rapid shift in the world’s economic centre of gravity showed the wilting power of the West and Europe. Airports such as Addis Ababa International in Ethiopia or Dubai International Airport serve as some of the busiest in the world due to growth in the South and East. It is time Europe adapted to this shift in power.
At present it seems highly unlikely that Ireland will be adopting our own portmanteau and rushing to have a referendum on Irexit, but maybe we can actualise some of the possible benefits the UK will see. With the UK soon to be creating their own trade agreements outside of the EU’s purview, Mr. Varadkar should seek to cooperate with our friends across the Irish Sea rather than antagonise them.
Perhaps the UK could become Ireland’s ‘Gate to the South’ rather than a conflict zone? Our Taoiseach’s salivating lips are anticipating a full plate of opportunity when Big Ben knells 11pm on 29th March; however, perhaps he ought to remember Pavlov’s dogs and be wary of an empty bowl. After all, friends make the worst enemies.
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In the aftermath of Parliament’s rejection of the draft Withdrawal Agreement, there is a way forward for the Government which allows a smooth transition into a No Deal scenario after 29th March, if found necessary, and then allows the UK to negotiate its desired comprehensive Free Trade Agreement with the EU without having to impose tariffs or quotas in the interim. There is a mechanism to ‘manage’ a No Deal scenario; one that works within existing WTO rules, and that is not widely known about.
This is essentially an alternate transition or interim period, but within WTO rules without having to levy tariffs or (arguably) pay membership fees to the EU, but requiring some customs forms levied on the 7% of UK businesses (400,000 out of 5.7 million UK private registered businesses) that actually trade with the EU. This is the deal with the EU used by China, the USA, India, Australia and New Zealand for example.
These recommendations are based on my nearly ten years of experience as a member of the European Parliament’s International Trade Committee, working on EU trade deals such as those with Canada, New Zealand, India, South Korea, Japan and Columbia/Peru, and drawing on high level discussions I have had with senior trade representatives for the EU and the World Trade Organisation (WTO).
In the event of No Deal, there is a strong case to maintain preferential tariff and quota rates at zero between the UK and the EU for a limited period – thought to be around two years. There are a number of arguments for exemptions to what are termed ‘Most Favoured Nation’ (MFN) rules, which require the same treatment in terms of tariff rates and treatment between WTO members to avoid discrimination. They are:
1) It is to the advantage of fellow WTO members to minimise disruption between our two large markets, which would reduce knock-on impacts to their imports/exports to the UK or EU markets. WTO members have to show financial harm to justify objections to practices (or tariff schedules). Civitas calculate that £13 billion of tariffs would have to be levied on EU goods entering the UK and £5 billion on UK goods entering the EU Single Market if standard tariffs are levied under No Deal. This is one justification for keeping preferential rates of tariffs for a period whilst a full trade deal is finalised.
2) There are exemptions under National Security grounds such as over the issue of Northern Ireland, which the IEA have argued as a case for an exemption, but this is less appealing given its association with US and Russian cases for exemptions, such as over US tariffs on Chinese steel.
3) Exemptions to ‘Most Favoured Nation’ (MFN) rules under Article 24 of the General Agreement on Tariffs and Trade (GATT) 1947. This appears to be the most substantive argument. WTO rules state that preferential benefits, such as tariffs and quotas for goods which are more favourable than MFN treatment, may only be extended to another country if it is part of a customs union or a free trade area. The ultimate legal authority to grant such preferences is Article 24 of GATT , incorporated into the WTO regime when that body commenced operations in 1995.
Article 24 is helpfully the ultimate basis in international law for the existence of the EU itself as a preferential trading bloc, which grants preferential treatment to its members within the Customs Union.
If the UK accepts Donald Tusk’s offer of a free trade agreement along the lines of CETA+++ or what I propose as ‘SuperCanada’, then the UK and EU will be in the process of moving towards creating a free trade area – Tusk has offered a tariff and quota free deal plus services (whilst leaving the EU Customs Union) – so qualifies under this criterion.
There are two under-appreciated aspects of Article 24 which have direct relevance to our situation, and which provide reassurance.
Firstly, Article 24, para 3 states:
The provisions of this Agreement [i.e. the requirement to extend MFN treatment equally to all] shall not be construed to prevent:
(a) Advantages accorded by any contracting party to adjacent countries in order to facilitate frontier traffic
- This has direct relevance to the position of Northern Ireland, and our adjacent country of Ireland. Some commentators have claimed that a sensitive and appropriate management of trade which respects and upholds both the letter and the spirit of, for example, the Good Friday Agreement would be in some form an unauthorised infringement of MFN treatment. That claim is clearly untrue.
- There is also no obligation under WTO rules to erect a so-called “hard border” on 29th March. Government may continue discussions with our counterparts in Dublin to arrive at adequate and effective technological measures for the management of trade with minimal friction. You will have noticed the encouraging signs that the Irish Government already appreciates this fact. (See, for example, “Ireland has no plans for hard border after Brexit, says Varadkar”, from The Guardian of 21st December 2018)
- We can expect that there will be considerable international sympathy for measures which support the situation in Northern Ireland, and hence a reluctance on the part of third countries to lodge objections. Although given the sensitivities this should not be stressed too heavily, such an exemption falls into ‘National Security’ related actions.
Secondly, Article 24 not only authorises member states to operate lower/zero tariff free trade agreements, it also permits them to offer lower/zero tariffs pre-emptively during the course of negotiations. The relevant provision, Article 24 para 5, is worth quoting at length, with emphasis added to the critical wording:
Accordingly, the provisions of this Agreement shall not prevent, as between the territories of contracting parties, the formation of… a free-trade area or the adoption of an interim agreement necessary for the formation of… a free-trade area; Provided that:…
(b) with respect to a free-trade area, or an interim agreement leading to the formation of a free-trade area, the duties and other regulations of commerce maintained in each of the constituent territories and applicable at the formation of such free–trade area or the adoption of such interim agreement to the trade of contracting parties not included in such area or not parties to such agreement shall not be higher or more restrictive than the corresponding duties and other regulations of commerce existing in the same constituent territories prior to the formation of the free-trade area, or interim agreement as the case may be; and
(c) any interim agreement referred to in subparagraph… (b) shall include a plan and schedule for the formation of such… a free-trade area within a reasonable length of time.
(A WTO declaration, the Understanding on the Interpretation of Article 24, 1994, clarifies that the ‘reasonable period of time’ in para 5(c) will generally taken to be no more than 10 years.) I estimate based on EU trade deals to date, that a UK-EU comprehensive Free Trade Agreement could take around two years, especially given the unique reality that the UK is starting from a convergent position with the EU, with zero tariffs and quotas and with our laws and standards currently harmonised.
- If, before 29 March, the UK has reached an ‘interim agreement’ with the EU to pursue negotiations towards a comprehensive free trade deal, both sides would be permitted under WTO rules to continue with the present zero tariff/zero quota trading arrangements. There would be no disruption to the man or woman on the high street. No Deal would mean No Change, as the cost of goods would not go up.
- In the present situation the ‘interim agreement’ would not have to be an extensive document running to hundreds of pages. The schedule of items covered by the negotiations would be all goods, as already envisaged in our discussions with the EU. The plan which the document sets out would have to amount to little more than a timetable for regular meetings and an ultimate deadline, some years hence, by which point negotiations will have to be concluded.
- An ‘interim agreement’, then, need be little more than an agreement to continue talks – while also continuing zero-tariff and zero-quota trade on both sides – plus a deadline no later than 29th March 2029. I accept that the EU has so far declined to agree any deadlines (other than 29th March) but since the absence of a final cut-off point has been a major contributing reason for Parliament’s rejection of the Draft Withdrawal Agreement, perhaps the EU will now reassess that stance.
- Whilst legal challenges at WTO level might be expected from an unhelpful member, the reality is that any such challenge is unlikely to get to the WTO ‘court’ – its appellate body – for at least two years and possibly longer, and only if that body finds the UK non-compliant would any compensating actions be authorised such as tariffs. This is within WTO rules, and if any challenges arise a fully compliant Free Trade Agreement should already be in place by the time any appellate body were to meet. The EU is now under extreme pressure from EU27 industry and commerce who enjoy a £96 billion surplus with the UK.
- You will recall that the draft Political Declaration indicates the EU want to reach a comprehensive Free Trade Agreement with the UK on the basis of zero tariffs and quotas (see paras 17, page 5, and para 23, page 6) and extending to services (para 29, page 7). Those provisions are fully in line with numerous public statements made since the 2016 referendum by Donald Tusk, President of the European Council, and Michel Barnier, European Chief Negotiator – offering a CETA+++, or what I term a ‘SuperCanada’ trade deal, on 7th March 2018, 30th August and 6th October 2018.
It is significant that Heiko Maas, Foreign Minister of Germany, has already indicated a willingness to continue talks (see “Germany says EU ready to talk if UK rejects Brexit deal” on Reuters, 15th January).
This approach would continue the pre-29th March status quo in trading arrangements and patterns without interruption, justified by an explicit provision of the WTO regime. The possible grounds on which any third country could lodge an objection to this are extremely slight (unlike for schedule changes).
An ‘interim agreement’ would therefore be an important component of a ‘Managed No Deal’ outcome from 29th March. It permits trade between us and the EU to continue without tariffs or quotas under No Deal while creating a space for negotiations to be reset and recommenced on the basis of reaching a SuperCanada or CETA+++ trade treaty.
I urge the Government to now adopt this course of action, as it will mitigate the main impacts of a ‘No Deal’ Brexit and eliminate the task of having to assess and charge tariff rates on 19,753 MFN tariffs under the EU Customs Union, thereby substantially reducing friction at borders.
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In the face of a rigidly ideological, hard-left Labour Party, it is the duty of all Conservatives to embrace pragmatic political thinking in order to maximise real-world policy benefits. When it comes to Brexit, I believe that means backing the Prime Minister’s proposed Withdrawal Agreement in the Commons vote this week. Put simply, there is no viable alternative; voting down May’s deal could throw the entire Brexit project wildly off course.
No Deal is not a plausible option. I do not make that statement as a Remainer who professes through gritted teeth to have accepted the referendum result as ‘the will of the British people’ but will lurch towards any opportunity to keep the UK as closely aligned to the EU as possible. Rather, I have long touted the benefits of an independent trade policy, unilateral immigration controls and true parliamentary sovereignty. Had I been of age in June 2016, I would have voted to leave the EU. I truly believe that the best way to grasp the opportunities presented by Brexit is by implementing the terms of Theresa May’s Agreement.
It seems to me that the key arguments presented by proponents of No Deal tend to wither under scrutiny. Whilst the notion of a ‘clean break’ might sound attractive in theory, when it comes to politics – “the art of the possible” – clean breaks are almost never desirable. If we were to leave the EU without a deal next March, British business would suffer immensely in the short term because of chaos at the ports and the instantaneous evaporation of any and all frictionless trade, thereby infringing on our ability to do trade deals elsewhere. Perhaps most devastatingly, a destructive hard border of one form or another would wreak havoc in Ireland. As much as one might resent the legacy of Tony Blair, tearing up the Good Friday Agreement would be like putting a hard border behind the nose to spite the face, to misquote Saint Ebba.
The most common rebuttal to this argument is that temporary measures could be put in place to ease the transition. Economist Ruth Lea, for instance, insists that deals would be done to avert chaos in the short term. Similarly, Dominic Raab talks enthusiastically of a so-called ‘managed No Deal’. The rhetoric of No Deal is loud and proud until it comes to inconvenient realities, when it seems that its feasibility suddenly comes to rest on the implementation of deals, which rather defeats the point. One is inclined to suggest that these deals could be agreed in advance and combined into some form of Withdrawal Agreement that could be put to a vote in the Commons.
The idea of a managed No Deal is a contradiction in terms. No Deal is, by its very definition, unmanaged, and that is precisely why it cannot work. It goes against every fibre of my political being to side with the Europhiles against the Brexiteers on this, but it seems that Corbyn’s ideological politics has had such a momentous effect on the climate of our discourse that even hardline Conservatives have become so idealistic that, having spent their entire careers campaigning for Brexit, they now find themselves denouncing it as it sits in front of them.
The consequences of No Deal, if it were to happen (which appears increasingly unlikely), will rest on the heads of those who voted down the proposed Agreement. Of course, some preliminary mitigating measures have been taken on both the British and European sides but, as the Government’s incessant PR machine has been saying repeatedly for the past eighteen months, nothing is agreed until everything is agreed.
If it turns out that, in the end, nothing is agreed (i.e. No Deal comes to the fore) the Conservative Party risks consigning itself to electoral oblivion for the foreseeable future. Barely three years ago, the UK’s third biggest party signed its own death warrant via an innocuous policy on tuition fees. If the Tory Party suddenly decides that it disagrees with itself on Brexit and causes us to crash out of Europe as a result, the consequences would be unimaginably grave, in the long term as well as the short.
If No Deal is out of the picture, what are the alternatives? Super Canada? Norway plus? Iceland minus? Lapland squared? The bandying about of totally unattainable hypothetical alternative deals is counter-productive and farcical. The Prime Minister’s Agreement is the only one that achieves all the required outcomes from Britain’s withdrawal from the EU. It is a remarkable exercise in pragmatism.
Renegotiation of the Agreement is clearly a fantasy best left to those on the Opposition benches. Even so, there is no other course of action that solves the Irish border problem. As the Prime Minister has pointed out time and time again, every conceivable withdrawal agreement must have a backstop element. I was fascinated by a remark from a Remain-voting Tory MP recently that Brexiteers’ apparent shock and horror when the draft Agreement was published last month seemed almost entirely artificial. For anyone who had been following Brexit, there were no major unexpected concessions at all.
The backstop solution is ingeniously designed for the mutual benefit of us and the EU (though mainly us) so that we essentially have access to the Customs Union that is free from both cost and Single Market immigration, an arrangement undoubtedly much coveted by many of our neighbours. It is not in Brussels’ interest to ‘trap’ us in the backstop for that reason, as well as the fact that their bad faith would be visible to the whole world and their trading reputation would be irreparably damaged.
The other major achievement of the backstop is that it negates the ludicrous ‘backstop to the backstop’ scenario. If a backstop needs a backstop, it is not a backstop. Calls for the insertion of a unilateral withdrawal clause are fatuous; I struggle to believe that all the Brexiteers who lament the lack of such a clause fail to understand that its presence would defeat the very point of the backstop. A safety net is of no significance if it can be yanked away at any moment. There is no feasible backstop-less withdrawal agreement, real or hypothetical. The inevitable conclusion is that many of the Prime Minister’s critics had already made up their minds to resolutely oppose her deal and latched onto the backstop as a means of doing that, despite it being cataclysmically unwise (assuming one actually wants Brexit to happen).
Somebody commented to me recently that the language surrounding the Withdrawal Agreement is highly misleading; it is just that, an agreement, not a ‘deal’ as it is so often called. Given the uproar it has provoked, one would be forgiven for thinking that it pertained to Britain’s long-term relationship with the EU, rather than merely the terms of our departure. The doomsday predictions of an impending government collapse which seem to re-emerge with a renewed vigour almost hourly make the Agreement seem much more consequential than it truly is. Canada+++ is a very good post-Brexit option. The Political Declaration is evidently mere bluster; the true negotiations for the future relationship have not yet got underway in earnest. They have nothing to do with the Withdrawal Agreement.
History will look back on Theresa May’s Withdrawal Agreement as an impressive political feat: she has emerged against all odds bearing an Agreement that is not only workable but ticks all the necessary boxes. That there has been a stark lack of sincere support for it from outside her government staggers me. The Financial Times clenched its jaw and reluctantly endorsed the Agreement, though at great pains throughout to stress that it still believes Brexit is “an act of national self-harm”. On the other side of the debate, Tim Montgomerie takes the line: “I know it’s rubbish, but it’s the best we’ve got” in his justification for backing the deal. The defence offered by both sides is hardly a ringing endorsement.
Providing a comprehensive analysis of the 585-page Withdrawal Agreement in a space such as this is an impossibility, but I believe I have covered the key points. I hereby wish to buck this depressing trend by humbly offering my whole-hearted, enthusiastic support for the Prime Minister’s Withdrawal Agreement. It is a commendable achievement in every sense.
Photocredit: ©UK Parliament/Jessica Taylor
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It seems fair to say that the draft withdrawal agreement agreed between negotiators and published this week has not been universally welcomed. In particular the Protocol on Ireland/Northern Ireland has been the source of much criticism. In a detailed briefing by the Institute of Economic Affairs, I described how, if it were to come into effect, this Protocol would effectively rule out an independent trade policy for the UK, and would throw up serious trade barriers between Great Britain and Northern Ireland.
It’s worth reminding ourselves of why this Protocol was thought to be necessary. Our government agreed in December last year to guarantee that there would be no physical infrastructure or related checks and controls at the border between Ireland and Northern Ireland. In order to achieve this they conceded that, unless they could put forward alternative solutions, Northern Ireland would stay in alignment with the rules of the customs union and single market in all areas necessary for north south cooperation, the all-island economy and protection of the Belfast (“Good Friday”) Agreement. It was also stated in the Joint Report that the UK would not allow new regulatory barriers between Great Britain and the United Kingdom. The EU’s interpretation of that was a draft agreement under which, “unless and until” other terms were agreed that would meet the objectives for the Irish border, Northern Ireland would remain in a customs union and regulatory area with the EU. This is what the backstop is.
The facilitated customs arrangement and common rulebook of the Chequers plan were an attempt to provide the alternative arrangement that would mean the backstop would never be activated. When Chequers was roundly rejected by the EU, and the Prime Minister declared after the Salzburg summit that no prime minister could accept the EU’s terms, the negotiators went back into their tunnel and reformulated the backstop so that Northern Ireland and the rest of the UK would be in the same customs territory, and Northern Ireland would retain EU regulations on goods “unless and until” a new agreement could be reached. Mrs May is now satisfied that this is something that a British prime minister can sign up to.
Some of us have long been convinced that keeping the Irish border free of infrastructure could be achieved by way of legal, technical and technological solutions. European customs experts Hans Maessen and Lars Karlsson have confirmed to the Northern Ireland Affairs Committee that this can be done. But the EU negotiators and the Irish government have been adamant that the requirements of EU law mean that only a customs union and regulatory harmonisation on goods can achieve this, as even with a free trade agreement with zero tariffs and quotas, the risk of goods that have not been duly declared for customs purposes or that do not meet EU regulations might cross the border cannot be tolerated. Except, it now transpires, for fish. Because under article 6 of the Protocol, fisheries and aquaculture products will be excluded from the customs union arrangements (and therefore fish caught by British and Northern Irish boats would be subject to tariffs) unless an agreement between the UK and the EU on access to waters and fishing opportunities is reached. But by the EU’s own reasoning, the exclusion of even one product would require a full customs border, to ensure that that product isn’t smuggled in undeclared. Now Irish government and EU negotiators could be forgiven for assuming that the British negotiators will concede on this as they have on almost everything else, and sign away fishing rights to the EU. But they might not, and then we would need a hard border wouldn’t we, and the Protocol would be for nothing? Or could it be, that for fish, as for everything else, it is possible to manage a customs border without physical interventions, and the EU is prepared to take the risk of having to do so in order to leverage access to UK territorial waters.
It is often overlooked that as well as being by far the biggest market for goods sent outside Northern Ireland 64% of goods brought into Northern Ireland come from Great Britain, with 12% from Ireland and 59% of its external sales are to Great Britain, as against 12% to Ireland. In seeking to preserve frictionless trade with Ireland, the Protocol, if it were to come into effect, would introduce costs and formalities for the vastly more significant trade within the UK. As former Brexit minister Suella Braverman noted in her resignation letter, customs professionals are clear that this could have been avoided. It’s time to start listening to them.
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The 1998 Good Friday Agreement (GFA) is constructed on the principle of consent, including;
- Consent of the British Government that a part of its territory, Northern Ireland, will be subject to special arrangements, including those with the Irish Republic;
- Consent that any change in the constitutional position of Northern Ireland can only occur if desired by a majority;
- Consent by the Nationalist community there to the present constitutional status, along with a mechanism to change that status, if a majority so desire; and
- Consent of the Northern Ireland Assembly to any alteration in the cross-border arrangements
All these interlacing sets of arrangements are delicately balanced and were arrived at after many years of painstaking discussion and compromises. The Agreement represented no single party or side’s ideal but there was enough consensus there to achieve a durable settlement on the basis of consent.
The hardline demands of the EU today, essentially driven by the Government in Dublin, are light years away from the approach which characterised that of former Taoiseach Bertie Ahern in the late 1990s and made the Agreement possible. The Agreement was designed to usher in a new and constructive era of mature relations between the UK and Ireland. We were to become close partners over a whole series of areas.
The reaction of the authorities in Dublin to British efforts to negotiate a sensible and smooth Brexit has been the antithesis of the process that led to the GFA. Instead of the two Governments’ commitment to “develop still further the unique relationship between their peoples and the close co-operation between their countries as friendly neighbours “, there has been a stubborn resistance to accepting the UK decision to leave the EU. This has been alongside a strong alliance with implacable Remainers in London. This has made the Brexit process much more difficult and fed into the agenda of those in Brussels, and also Paris, who are determined to make an example of Britain for daring to leave their club. It is completely contrary to Ireland’s real national interest and the spirit of the GFA.
This hardline policy from Dublin is now endangering the entire GFA, which can only function as long as the participants in that Agreement are willing for it to do so. Demanding that Northern Ireland is detached economically from the rest of the United Kingdom, without the consent of the population, carries the danger of strongly alienating one side of the community there. Frustrating the UK’s efforts to come to a balanced accommodation with Brussels will inevitably lead to some in London questioning the foundation on which the GFA is based, trust that Ireland and the UK can be close and mutually supportive allies. There is also the damage that is being done to community relations in Northern Ireland.
The GFA recognised that cross border co-operation was dependent on consensus north of the Border. Meetings of the North-South Ministerial Council always had at least one Minister from either side of the communal divide; and the GFA specifically states that any further development of North-South arrangements is “to be by agreement… with the specific endorsement of the Northern Ireland Assembly and the Oireachtas (Irish Houses of Parliament)”. By seeking to bypass the consent of one side of the community, the Irish Government is deepening division and undermining the whole basis on which the GFA was built. This position is developed further in our recent Policy Exchange paper The Irish Border and the Principle of Consent.
The upholding of the GFA is, of course, a laudable aim and is shared by authorities in Dublin, Brussels and London. The maintenance of the present mutually beneficial arrangements on the Irish border is also very desirable. The present policy course by Dublin is unlikely to achieve either. By ignoring the essential element of consent, the Irish Government is placing the progress of decades of good work in jeopardy.
There needs to be a new British/Irish initiative to break the present logjam by making a declaration that the future of the border will not be used to stop the signing of a Withdrawal Agreement. Both the EU and the UK should undertake to use their best efforts to preserve all existing measures to secure an invisible border and to preserve all existing measures of cross border co-operation under the aegis of the GFA. This would allow Brexit to proceed in an ordered manner and the two-year transition period to kick in. The future trade talks would hopefully achieve the above aspiration.
The alternative – a continued impasse, economic damage and resultant ill feelings all round – is in nobody’s interest.
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So here we are in the last days of the negotiations. Our Government stands on one side of a rhetorical gulf, terrified of No Deal and having made no significant preparation for it, its finest minds baffled by the impossible Irish Rubik’s Cube constructed for it by the EU.
On the other stands the EU, sure from the outset that the UK would, in its delicate phrase, “take dictation” and now convinced that the strategy will pay off. No doubt the British officials leading the negotiations are assuring the Government that a deal can still be pulled off.
But what a “deal” it will be: a binding treaty in which the UK gives away large amounts of money and what seems to be a perpetual lien on Northern Ireland and in exchange gets an expensive “transition” period (with an option, it seems, to pay more for an even longer one) and a non-binding “framework” (possibly only a few pages long) that will guide the trade talks we will begin (but can hardly hope to conclude) in the never-ending “transition” period. During that “transition” we shall be fully subject to EU law but have no representation in its legislature (in possible contravention of the European Convention on Human Rights, but what the heck).
This will be mendaciously described by some as a “good deal for Britain that delivers the referendum result” and the Government will set out to frighten and cajole MPs of all parties into supporting it, with the clock ticking and the fanciful “cliff-edge” just a short hop down the road.
It is a scandal, really. But is the alternative “crashing out with no deal”, as some put it? No. It is still possible for the UK to take back control of the negotiations and achieve a successful and workable Brexit. But to do that means being willing to embrace the prospect of leaving without a trade deal. And it requires a proper understanding of what the EU intends the Irish backstop to achieve.
Our politicians have largely failed to present the backstop to us in its proper light. They say it is a transitional measure, one that will cover a gap between next April and a new trading relationship that will be so close as to make it redundant. They talk freely therefore of an “end-date” to the backstop, anticipating that close relationship as permanent.
But the EU perfectly understands that, once we leave the EU, there is nothing they can legally do to stop us from diverging, piecemeal or suddenly, from our new trading relationship. Michael Gove has told them that is exactly what we intend to do, after all. And if we do that, they may feel forced to erect a border on the island of Ireland to “defend” their Single Market. They want a guarantee that they can never be obliged to do that.
So what the EU is seeking in an Irish backstop is not a transitional or temporary thing. It has to be permanent (“workable, enforceable and all-weather”, as Michel Barnier put it recently, “all-weather” being the new euphemism for “permanent”). It will not be effaced or rendered null by a future trading relationship. It is what it says: a backstop, a perpetual insurance policy ensconced in international law that will come into play if ever we want to change our future trading arrangements in a way that could be judged by the EU to necessitate a “hard” land border between the UK and the Republic of Ireland. The EU thinks they have made this sufficiently clear and they look in bafflement at British interlocutors when they say there must be an end-date to the backstop!
In short their view is that Great Britain (not the United Kingdom) can strike any reasonable trade deals it can manage, with the EU or with other countries, but that, if we do so, we must leave Northern Ireland behind in the Customs Union and large parts of the Single Market, permanently deprived of a say in substantial parts of the laws affecting it, and with a goods border in the Irish Sea.
And since no British Prime Minister will ever propose abandoning Northern Ireland (unless it freely and lawfully chooses to join the Republic under the terms of the Good Friday Agreement), the whole UK will be trapped in perpetual subservience to the EU, tied to their rules and laws and having no say in them. That is what signing it means. Like a virus, the backstop may lurk in the marrow for many years unnoticed, but it will pop out if ever we seek to make a real break for freedom. Properly understood, it destroys the notion of some Brexiteers that surfaced in mid-year that we can “get out and fix it later”. We can’t fix it later: not while maintaining our territorial integrity.
If that is the price of a “deal”, clearly we must go for No Deal. But there are in fact two deals: a Withdrawal Agreement, as envisaged by Article 50 and a future trading relationship, formal talks on which will not begin before we leave. We would do well to split them. We can certainly offer a Withdrawal Agreement acceptable to us, but uncoupled from a deal on the future relationship.
Old-fashioned diplomats, going into negotiations, always sought to avoid being in the position of the party seeking something: the demandeur in diplomatic parlance. Our weakness in the negotiations is that we are desperately seeking something and the EU, through canny sequencing of negotiations (in which we lazily and stupidly acquiesced), has managed to make out that it is not. The only way to break out is for us to cease to be the demandeur. And the only way to do that is to embrace leaving on WTO terms and be willing to do so.
What we need to say now to the EU is that we no longer wish to discuss our future relationship as part of these negotiations. We are under no legal obligation to do so. We will have the default relationship that any independent country has with the EU, just like the USA and many other countries do. But we will sign a Withdrawal Agreement that will involve our paying our dues and agreeing citizens’ rights and the other administrative matters that it has suited both sides for practical reasons to include to date in the draft Withdrawal Agreement.
Our proposed Withdrawal Agreement will also contain a promise by both sides to use best endeavours to have a minimal Irish border and will remit the question of practicalities to technical talks outside the Article 50 process. In effect, we will offer the EU money for their coffers and stability for their and our citizens. We will also recognise that underlying legitimate Irish concerns about the “border” are more fundamental issues about the economic and social future of Ireland and we shall offer to work together to address those.
Our proposed Withdrawal Agreement will not include a “transition” period. But we will offer more money should the EU agree a strictly time-limited one, concluding in December 2020. Both sides can use this to prepare in more detail (if needed) for trading on WTO terms.
It is an offer that will be understood by Parliament and the British people as proposing an exit that is neither “disorderly” nor “chaotic”. With luck, it will maintain a smidgeon of goodwill with the EU and allow closer relations to be rebuilt over time. Crucially it will preserve the independence and the territorial integrity of the UK.
The choice will then be for the EU to accept the proposal or to invite us to leave with No Deal. Our offer will remove EU leverage from the negotiations, since if they refuse it, we will simply leave it on the table. They may come round one day and in the meantime they will look wholly unreasonable, to the world and to their own citizens. And we will be out.
Of course, as I say, this does mean we would leave on WTO terms. But, if the EU decided to accept our payment for a transition period, it is more than possible that a working trading arrangement, if not a full all-UK/EU Free Trade Agreement, could be worked out in that 22-month period. However, we would not be seeking that: we will no longer be the demandeur.
The art of leadership, if you don’t know the answer to the question, is to change the question. That is what the Government needs to do. But to do so, we must be seeking nothing, and so remove the EU’s negotiating leverage.
Here, therefore, is the letter Mrs May should now write to Mr Barnier:
We wish to take a new approach to the negotiations surrounding our departure from the EU.
The UK will cease to be a member state on 30th March next year. We no longer seek to conclude a framework agreement with you on our trading relationship with the EU after that date as part of the current negotiations. Nothing in Article 50 requires us to do so. This will mean a degree of disruption to both of us, but we will cope and in due course we will, as separate states, start to repair the web of relationships that geography and mutual interest imply between two neighbouring but independent entities with so much in common. But it is clearly the case that we find it impossible to agree those things now in a way acceptable to both sides, so we need to let time and good sense take their healing course.
As a responsible state, however, we are willing to enter into a Withdrawal Agreement as contemplated by Article 50 to cover matters of common interest relating to our departure in an orderly way and on a mutually acceptable basis.
The Withdrawal Agreement we propose will cover:
- The orderly assignment of assets and liabilities between us, to be assessed and adjudicated by an impartial, independent body;
- The rights of EU citizens resident in the UK and of UK citizens resident in the remaining EU states, though with no role for EU law within the UK beyond an eight-year time limit;
- An agreement to work together in good faith outside the Article 50 process to establish and implement the minimal proportional customs arrangements on the land border between the Republic of Ireland and the United Kingdom consistent with the status that will subsist between us as “third countries”; these discussions will be undertaken by competent technical officials from the United Kingdom, the Republic of Ireland and the EU and, in our view, will build on technological monitoring, electronic filing and remote enforcement. The shared objective will be to have as “invisible” a border as can be agreed; and
- Other matters of a practical character already agreed between us.
We note that the current draft Withdrawal Agreement includes payments by the United Kingdom covering our budget contribution during an implementation or transition period of some 22 months from next March. These payments would no longer form part of the Withdrawal Agreement we propose unless the planned implementation or transition period were retained. The United Kingdom would be willing, however, to make those budget contributions if the implementation or transition period were retained on a basis fully consistent with the European Convention on Human Rights and we believe it would help minimise disruption for both parties, should that be agreed.
We are conscious of our legal and constitutional responsibilities under the 1998 Belfast Agreement and are fully committed to their fulfilment. Outside the Withdrawal Agreement, but alongside it, we therefore propose to work closely with the Irish Government and all communities on the island of Ireland to ensure that the legitimate concerns and aspirations of all communities embodied in the Belfast Agreement remain fully credible after Brexit. The assistance of the European Union in facilitating those discussions in support of the peace process would, of course, be welcome.
We hope you will accept these terms. If not, we will, if so obliged, proceed to leave in March without a Withdrawal Agreement.
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