Total Pageviews

Saturday, 24 March 2018

A Brexit withdrawal agreement in name only (FT)

"A revised draft withdrawal agreement was published on Monday, and we can now see the likely shape of Brexit

The UK’s exit from the EU will be largely on the EU’s terms. On almost every substantial point, the UK has accepted the EU’s position. This is an agreement that could have been finalised last summer, as it is in effect a translation of the EU’s April 2017 negotiation guidelines into legal prose. 

But the draft is not without problems. There is no provision for extending the envisaged transition period of 21 months. And once the UK is outside the EU, it may not be legally possible for the EU to amend the agreement. So a new cliff edge is created, and there is no reason to believe the UK will be any more prepared for the cut-off date of December 31 2020 than it was for March 29 2019. 

The draft also seeks deftly to avoid the problem of whether the UK can retain the benefit of free trade agreements after March 29 2019. It does this with a footnote, which states that the EU will tell its trading partners to treat the UK as part of the EU. Footnotes can be powerful things, but there is no guarantee that the EU’s trading partners will accept such an elegant fix. 

The UK has trumpeted an apparent concession: it can negotiate trade deals during the transition period, as long as they do not take effect until afterwards. But this is an illusory power. No serious potential trading partner will want to enter into an agreement with the UK until the ultimate trading relationship with the EU becomes known. 

The text itself is colour-coded. The parts with green highlighting are fully agreed; those with yellow highlighting are where there is agreement in principle subject to drafting points; and the parts with no highlighting are still to be discussed. There are still large parts which are neither green nor yellow. One suspects that these are the points where the UK has not yet conceded to the EU. 

The text on Ireland is largely in white. But the UK accepted the “backstop” of Northern Ireland staying in the EU’s single market and the customs union back in December. Unless the UK reneges from that position, that backstop will be part of the exit agreement. This means that unless the UK and the EU agree something else, the default will be that Northern Ireland effectively stays in the EU. And how that accords with the rest of the UK is a problem which can only be solved by the rest of UK in effect staying in the EU too. Or by a united Ireland. 

But many Brexit supporters seem not to mind. The UK will be in the EU without any representation at any institutions or formal influence for 21 months after next March, and Leavers appear only to shrug. The UK will not take control of its borders, laws or money until at least 2021, and that seems fine as far as they are concerned. The best explanation for this relative silence is that the key objective of the UK being officially out of the EU will have been achieved. And once the UK is out then it will be hard for the UK to rejoin. 

And so in this way, the UK is heading for a Brexit in name only, at least until 2021. A “52:48” Brexit, which is what it should have been all along. The slight majority in the referendum get their mandate discharged with the UK leaving the EU, and the slight minority are respected by there being little change in practice. 

The shape of what happens after 2021 is less clear. It will then be five years since the referendum result. The EU may adopt a hard negotiating position for a trade relationship, or there could be a generous association agreement. Those “red lines” which survive that long may no longer have any attraction to the government of the day. 

Theresa May once promised that there would be a robust “red, white and blue Brexit”. We now have a limp green, yellow and white Brexit, where the UK has not in any meaningful way taken back control of anything. All the time and effort expended since the referendum has been to create a situation where most things will stay the same."

This FT article is written by David Allen Green.