Trade Knowledge Exchange > Commentary > BREXIT – FOUR MONTHS TO GO

BREXIT – FOUR MONTHS TO GO

Where we are now

It is now almost a month since the European Council discussion of Brexit on October 17, which had for many months been the target date for agreement on the UK’s terms of withdrawal. That meeting produced no agreement, but also no surprises because expectations on both sides of the Channel had been thoroughly damped down beforehand.

It appears that in as far as serious discussion took place at all, this focused on the insistence of the EU27 that the United Kingdom must come up with a practical way of reconciling the various conflicting commitments it has made around the Irish border problem.  Several weeks on, intensive negotiations on how to keep that border open continue between Britain and the EU on one hand, and on the other within the Conservative Party and with the Northern Irish Democratic Unionist Party (DUP).  The central focus is on highly contentious EU proposals for a “backstop” arrangement that would effectively keep Northern Ireland in the Single Market pending agreement on long-term arrangements.  The UK insists that any backstop must be strictly time-limited.  The EU says that to have any value it must be open-ended.  Both sides recognise that it is not an ideal solution.  Frantic negotiations are continuing, and otherwise, both EU sources and UK ministers say that the terms of the Withdrawal Agreement are 95% settled.  The longer-term UK/EU relationship has still barely been tackled in any meaningful sense.

More broadly, the EU has shown willingness to extend the proposed implementation period for the UK (up to December 2020) by a further 12 months until end -2021, to allow more time to negotiate an Irish solution and address the long-term future.  Prime Minister May is willing to consider that, but in the face of continuing noisy opposition from some in her own party who just want to get out of the EU and get out quickly.

Meanwhile the clock ticks on.  A special Brexit-related EU Summit was pencilled in for November, but so far there appears nothing concrete to discuss and some EU national leaders have indicated that without tangible progress they may not attend.

Procedure

Any Brexit deal depends on unanimous agreement of all the EU27.  When EU negotiator Michel Barnier proposed the October European Council meeting as the  deadline for agreement on the UK’s Withdrawal Agreement package, this timing was designed to allow time, albeit only five months, for ratification of that agreement by all the EU27 plus the UK before the Brexit date of 29 March 2019.  However ratification will not be straightforward.  On the EU side it will include votes by 27 national and some regional parliaments, as well as national referenda in a few instances.  The UK Parliament for its part has secured the right to hold a “meaningful vote” on any eventual agreement, though controversy continues over just what the rights of Parliament relating to any such vote will be, for example how far if at all it will be able to insist on changes. As noted, the prospects for a November European Council meeting seem to be receding and given all that, the negotiating timetable will slip further, maybe even into December.

Legal issues

Barnier put forward an October deadline for good and practical reasons; but it was always an artificial deadline.  The real deadline for a Withdrawal Agreement will be the point beyond which, aside from the ratification issue, such an agreement cannot be practically activated before the Brexit date.  That date in turn reflects the timing of the UK Government’s letter notifying intention to withdraw.  It rests on a strict reading of Article 50, which allows up to two years for negotiation (unless there is unanimous agreement to extend the period) and it has been confirmed in UK internal legislation.  There appears therefore to be severe doubt whether Brexit could now be called off, let alone reversed after the event.  The one organism which could definitively settle the interpretation of Article 50 is the European Court of Justice.  While it is politically inconceivable that the UK Government would call on the ECJ to adjudicate, there is already a case before the Court brought by private interests, on which an adjudication within the short time available at least looks possible.

Realism

It is quite usual for major international negotiations to go right to the wire, or even over time.  None of the participants dare go home without being able to claim plausibly that they have held out for all that they could realistically get.  Entrenched positions are stated and re-stated ever more insistently before major concessions are made and accepted, usually in the small hours of the morning.  In the Brexit case we are now approaching the point of no return where it may not be practically possible to get any agreement through before March, with the profound economic disruptions and costs which all sides now accept would go with No Deal.

So as the key issues come into sharper and sharper relief, realism is breaking in. The Brexiteers’ mantra that “No deal is better than a bad deal” is rarely heard these days.  Most people in politics, industry, commerce and civil society on both sides of the Channel now agree that No deal would be a very bad outcome indeed.  Against this background the modest but still contentious advances made on October 17 are a hopeful sign but the question remains, all the more acutely, whether there is still enough time before March 2019 for the Irish border logjam to be cleared and for a rational and mutually acceptable Withdrawal Agreement to be put in place.  And even if the two sides were to agree on extending the UK’s implementation period until end-2021 this would have the result, favoured by nobody, of extending the period during which the UK would have to obey all the EU’s rules without having any say in their formulation, as well as continue paying into the EU’s regular budget.

Political upsets

In the midst of the current turmoil British politics were rocked on November 9 by the resignation from the Government of the junior transport minister Jo Johnson.  He accompanied his resignation with a critique of the UK government’s negotiating effort, which, he said, threatened to land the UK in the greatest national crisis since World War 2, and with a flat rejection of the proposals currently reported to be under Government consideration.  As representative of a constituency in the county of Kent, on the road routes to London and the rest of the UK, he drew a chilling forecast of the possible consequences for transport through Kent of wholesale new checks at the Channel ports which would be imposed in the event of No Deal. The expression of his fears on these matters came shortly after the Secretary of State for Exiting the EU (Dominic Raab) confessed to having underestimated the importance of cross-channel transport links to UK trade.  Finally, Mr. Johnson joined the increasingly vociferous calls for a People’s Vote on any agreement that might be struck.

Normally the resignation of a junior minister from a technical ministry like Transport might be regarded as inconvenient but hardly imperilling the Government.  However Johnson is a different case, as very much a Conservative Party insider, being directly involved in the transport issues arising from Brexit, and as the younger brother of the former Foreign Secretary Boris Johnson.  His resignation immediately provoked a storm of speculation about further possible ministerial resignations. In this febrile atmosphere it is quite uncertain whether the Government would be able to finalise with the EU the terms of the necessary Withdrawal Agreement in time to avoid the economic and administrative consequences of No Deal.

On the basis of what is currently known, it is widely forecast that there is no majority in the House of Commons for any Brexit agreement that the Government might be able to propose.  In that event, the result would be political deadlock and uncertainty verging on chaos.  The Labour Party, probably supported by other opposition parties, would likely renew calls for a General Election.  The Conservatives for their part will, in the last resort, be more scared of letting in a left-wing Labour government led by Jeremy Corbyn than they would be of losing their dream of a Brexit that liberated the UK to float freely on the oceans of the world.  On that scenario a viable way out, and probably the only viable solution, would be a People’s Vote.  Watch this space.


About the Author

Michael Johnson

Michael
Johnson

Michael Johnson was a senior official of the UK’s former Department of Trade and Industry, where he worked on international commodity policy, UK bilateral commercial relations with developed country markets, and the UK’s input to EU external trade policy. He is in demand as an independent consultant, and has advised governments of more than twenty developing or former Communist countries on trade policy formulation and on trade-related development projects.


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