Tuesday 11 December 2018

Summer Brexit showdown on cards as ideology overshadows practicality

European Commission President Jean-Claude Juncker with a Cork GAA jersey in Croke Park. Photo: Stephen McCarthy/Sportsfile
European Commission President Jean-Claude Juncker with a Cork GAA jersey in Croke Park. Photo: Stephen McCarthy/Sportsfile

Ailish O'Hora

As President of the European Commission Jean Claude Juncker and chief EU negotiator on Brexit Michel Barnier decamped to Dublin last week to offer reassurances on European support for Ireland in regard to the increasingly toxic issue of Brexit, the warnings of its impact were being laid on thick in Brussels.

"Ireland's border is the EU's border, and the EU's priority," Juncker said to rapturous applause in the Dail. Meanwhile, in Brussels, Britain's judge at the EU's General Court, Ian Forrester, told a legal conference that the UK exit was akin to the evacuation of British soldiers from French beaches during WWII and the Suez Crisis.

"I cannot recall a greater sense of crisis since Dunkirk in 1940, or Suez in 1956, for the United Kingdom," he said.

He added that the UK is "passing through a period of extraordinary instability and confusion" while it is "not at all clear what will be the future relationship" with the EU will be.

As we gear up for the next EU summit in Brussels on June 28-29, it's hard not to feel that we are gearing up for a Brexit summer showdown.

As British politicians in the two houses slog it out in the UK over the details of the exit, the Irish Border remains a centre-stage issue. Britain is due to leave the EU on March 28, but will remain in a transition period of 21 months during which it will adhere to the EU's rules on decision-making without any influence and talks will continue around financial security, trade and security for the two sides.

"It is a matter of dismay each morning when you listen to the news and truly you do not know what will happen next," said Forrester. You could almost imagine him huddled over the wireless in the midst of the 1940s waiting for news from the WWII front, given the tone of his speech.

But the whole tone of Brexit is becoming more and more battle-like, with the outcome looking more and more like a stand-off at the upcoming October summit.

And until now, many individual UK-based businesses that had stayed out of the limelight, are becoming more vocal, according to Dubliner Paul Drechsler, the outgoing president of the Confederation of British Industry, which represents over 190,000 British businesses.

"Because the debate in the UK was so intense from an ideological point of view, there was little space for fact, evidence and analysis and there was much scaremongering," he told the Sunday Independent.

But he added that these companies were increasingly finding their voices - firms like retailer John Lewis, a number of carmakers and Airbus have more recently warned about Brexit damage. Drechsler also warned that there were tough months of talking ahead of us and it would be difficult for Ireland/Europe and the UK.

"This is trying to reconcile extreme positions of a view of the world, he said adding that there are no winners in the game.

He also said that there are a lot of international issues eating up the time of politicians and business people around the world, and for many of them Brexit is not top of the agenda. There's the migrant issue both in the US and Europe, US trade tariffs, China and trade, for example. "For many of them, Brexit would not be in the top three," he added.

Here in Ireland, where Brexit is high on the agenda, his comments are a sombre reminder, of course, and a timely one.

Especially given that we are nowhere close to a resolution on the Border issue as we enter into the winter stage of negotiations.

"Today, a third of Northern Ireland's exports go to the Republic," Drechsler told the Institute of European and International Affairs in Dublin last week.

He took the food and drink industry as an example. "Bailey's liqueur, for instance, is made in Dublin. It's moved to Northern Ireland for bottling. And returned here for export. It works the other way too," he said. "Almost a third of Northern Irish milk is processed in the Republic, 40pc of Irish lamb."

But it's not just about trade on both sides of the Border, it's about east-west trade between the Republic and Britain and further afield.

According to Dreschler, some form of customs union will be necessary post- Brexit - on this Ireland and UK businesses agree.

"The UK is a trade bridge between Ireland and the European mainland. Customs barriers would harm the movement of Irish products around the world.

"So, we have another proposal. Let's keep a whole-UK-EU customs union on the negotiating table - at least for the backstop - and with enough regulatory convergence to allow goods to flow," he said.

He added that this will require compromise and the UK government will need to show how to make the regulatory side work.

On the other hand, he added, the EU will also have to compromise if the solution is to be UK-wide. Such a move would prevent some of the most significant trade barriers and this could make all the difference for the island of Ireland.

This proposal sounds like a practical and workable solution, but the problem is that the ideology will kick back in ahead of the June and October summits. Heads will be lost and compromises are likely to be thrown out the window.

The last thing we need is some half-baked deal, agreed at stupid o'clock in Brussels this autumn - as is often the case with these near-overnight summits. Worse still, we could be staring down the barrel of no agreement at all.

"This is complex stuff, it's hard to see a magic wand," Dreschler said.

(Additional reporting Bloomberg)

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