Monday 21 October 2019

Colm McCarthy: 'No matter what is salvaged, the damage has been done'

Ireland's golden period of foreign relations is over - and a UK election is unlikely to bring a silver lining, writes Colm McCarthy

Theresa May. Photo: Getty Images
Theresa May. Photo: Getty Images
Colm McCarthy

Colm McCarthy

When the votes were counted on the night of the UK's 2016 referendum, three broad versions of Leave had collectively secured support from 52pc of voters. There was no guidance as to which version of Brexit the Leave voters preferred, since none was sought. The three versions were: Soft (stay close to the single market and customs union); Hard (quit both and seek a trade agreement as a third country), with an orderly withdrawal agreement in either case; or Crash Out, with no arrangements at all for either withdrawal or a trade agreement.

Theresa May chose Hard, even though many Leave campaigners, including Boris Johnson, had effectively promised Soft by touting post-Brexit trade access available only by choosing close alignment to the internal market. Crash out without a deal, now the One True Brexit, had no advocates during the campaign. Since immigration had been a potent motivator of Leave voters, Soft fell rapidly off the option list - it would have meant continued freedom of movement for EU citizens into and out of the UK. But May's Hard option meant problems at the land frontier in Ireland and unrealistic expectations about UK access to the internal market post-Brexit. Frictionless access to the internal market is not available to go-it-alone ex-members.

Departing EU members must secure, under the terms of the Lisbon Treaty's Article 50, a withdrawal agreement. Negotiations about the long-term trading relationship come later. All that has been explored, unsuccessfully, in over three years is the withdrawal agreement, the terms for the UK's exit from the EU, which was meant to be the easy bit. Settle the bills (the EU budget operates a system of pre-committed spending, pay later), respect the acquired rights of expatriate residents, and avoid screwing up at the only land border. The hard bit, a long-term trade deal between the UK and the EU, would be one of the biggest free trade deals ever attempted and the withdrawal agreement had to include breathing space, in the form of a no-change transition period. Estimates at the time were that a two-year transition was too short and that the long-term deal would take five to 10 years.

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The version of Hard eventually negotiated followed the joint report of December 2017 agreed between the United Kingdom, when Johnson was foreign secretary, and the European Union, which includes the following at paragraph 49:

"In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the internal market and the customs union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement."

The unhappiness of the Irish Government with the latest two-borders proposal from Johnson is hardly surprising. It may secure better support in the House of Commons than May's version but the counterparty in the negotiations is in Brussels, not London. Aside from the Irish issue, there is another reason why the EU-27 will be wary of the latest version of Hard, and it has to do with the UK's unrealistic expectations of the long-term trade deal. Johnson's two-borders proposal involves a change from May's deal which has nothing to do with Ireland. It would see Great Britain depart, just 15 months hence, from both the customs union and the single market. Since Brexiteers have declared their intention to exploit fully their new-found freedom to do trade deals around the world as EU competitors, and to diverge deliberately from EU product standards, the EU will have every incentive to make things difficult. This ambition to diverge impacts on the withdrawal agreement too, because of Northern Ireland. The EU's concern for peace in Ireland does not extend to creating a UK-sized hole in the frontier of the internal market. Theresa May's deal was agreed by the EU because it addressed this issue. The latest two-borders version requires the delegation to the UK of policing the single market inside British territory, as well as the creation of a customs frontier in Ireland, moreover with the UK entitled to change these arrangements unilaterally. If this is rejected it will be in defence of the internal market, not just an act of solidarity with Ireland.

Connoisseurs of political codology will have noted the comments on the BBC from Steve Baker, the Tory MP and chairman of the ultra-Brexiteer European Research Group. Conceding that there would be "some additional checks" at the Northern Ireland Border, he promised: "I'm absolutely convinced this can be a world-class border."

The withdrawal agreement negotiated by May but now abandoned by Johnson kept Northern Ireland in the customs union and sufficiently aligned with the single market to yield, hey presto, a world-class border, since it avoided any border at all. It also failed on three occasions to pass the House of Commons since it made the DUP unhappy and locked the whole of the UK into the customs union. Johnson's solution pleases the DUP and might even pass the House of Commons, since it liberates the Brexiteers to launch the good ship Global Britain on the high seas to bountiful trade deals around the world.

The EU agreed the May deal because it appeared to solve the land border problem in Ireland but also protected the single market - Northern Ireland could not become a huge hole in its external frontier. The Johnson proposal does neither. There is no appetite in Brussels for the derogations and surveillance headaches at the two borders it requires, not to mention the precedents it could create - the EU has many frontiers with third countries. In the time available there are only two deals that would prevent Crash Out, the May deal or its predecessor, a full external EU frontier between Northern Ireland and Britain. If neither can get through the House of Commons there will be a new House of Commons, after another extension and a general election before Christmas. It is just about possible that Johnson could try to rat on the DUP and go back to the original border in the Irish Sea solution, but that would need a level of support from the Labour party unlikely to be forthcoming, since many Tories would vote against.

The ultimate outcome depends on the result of the election, and Johnson's performance since he assumed office has been interpreted as electoral positioning to forge a Tory victory as the Leave champion. But a Tory victory changes nothing for the EU unless the new House of Commons is willing to back a deal which protects the internal market. The new Tory majority would face the same agenda for negotiations, equipped with even firmer red lines and unrealistic expectations. If the Tories lose there would probably be a second referendum, to which both the Labour and Liberal Democrat parties are committed, but the outcome could be another Leave victory and Brexit Mark II.

Even a Remain verdict at a second referendum would be conditional, with a Conservative opposition in permanent campaign mode to trigger a third. The damage has been done and a golden period for Ireland's external relations, with a friendly USA to the west and a cooperative EU partner to the east, has come to an end.

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