Brexit shambles has many years to run yet
Britain’s hopes of a third-country free trade deal with the EU will fail because it is impossible, writes Colm McCarthy
BRITAIN’S Cabinet is due to meet this week, 18 months after the referendum, to agree its desired end-point in the Brexit process. The country, and its European neighbours, have been through several years of economic uncertainty and diplomatic turmoil initiated by a group of people who have yet to agree the purpose of the exercise. Notwithstanding the agreement announced at dawn in Brussels last Friday, the Brexit shambles has many years to run. The Irish border issue has been fudged rather than settled, and the Tory civil war rumbles on.
Theresa May’s hard Brexit strategy was first outlined in her speech to the Conservative Party conference 14 months ago and further elaborated upon at Lancaster House in London on January 17 last. The strategy, a disruptive break with the European Union and reliance on new trade deals with countries around the world, delighted the ultraBrexiteers in her party and government. She promised to take the United Kingdom out of both the single market and the customs union and also to end jurisdiction of the European Court in Britain.
She doubled down on the hard Brexit option by tabling an Article 50 notification at the end of March, giving two years’ notice of resignation from the European Union. With the UK unshackled from what are apparently the crippling constraints of membership in the world’s largest free trade area, the good ship Global Britain was launched on a crystal sea and the sunlit uplands beckoned. With the clock now ticking, Mrs May called a snap general election in mid-April, promising strong and stable leadership, and duly lost the small majority she had inherited from David Cameron. The result is a minority government reliant on support from Ulster’s Democratic Unionist Party. The humiliation has now been completed with a comprehensive capitulation to the negotiating terms dictated by Brussels.
The EU’s three precon- ditions for the withdrawal agreement were a financial settlement, provision for the rights of expatriate EU citizens and the avoidance of a hard border in Ireland. The second and third conditions would not have been necessary had Mrs May eschewed departure from both the single market and customs union. These two extra conditions were selected by the EU negotiators in response to the Lancaster House speech — there would have been a financial clause in any scenario — and all three have predictably been met.
The UK government has capitulated on the financial settlement, has accepted continuing ECJ oversight on citizens’ rights and has signed up to a guarantee on an Irish non-border that may yet preclude a full rupture with the single market and customs union. The policy outlined at Lancaster House has been diluted, if not quite abandoned.
Once the Article 50 resignation letter was delivered, the UK was clean out of bargaining chips and a climb-down was inevitable. That it has taken so long and looked so inelegant is neither here nor there: the hard Brexit nightmare, which would have done maximum damage to the Irish (and to the UK) economy, is now likely to be avoided.
The outcome announced last Friday morning looks like a victory for the EU negotiating team and a defeat for the Brexit ultras. Their consolation is that the process of negotiating a binding withdrawal agreement is unstoppable and the slim chance that Brexit would somehow be averted has now disappeared.
But the transition and trade agreements will be very difficult. In particular it will be necessary, if the hard border in Ireland is to be avoided, to find a formula which effectively avoids trade barriers and tariffs while pretending that Britain has left the single market and customs union.
It should now be clear why the inclusion of the ‘no hard border in Ireland’ pre-condition was so important for the EU as well as for the Irish Government. At face value, it rules out a hard Brexit and requires the UK to move away from the unattainable Lancaster House ambitions.
The debate about the true meaning of the fudged language in Friday’s agreement has already commenced in the British press but will not be settled there — the words will mean whatever the EU negotiators decide and that decision has been deferred.
The Brexiteers will now, with a withdrawal agreement assured, proceed to seek a third-country free trade deal with the EU which will avoid a hard border in Ireland and
will not look like staying inside the framework of the single market and customs union. This attempt will fail because the project is impossible. All of the EU’s free trade agreements with third countries involve trade barriers and customs checks. It is not possible to have no barriers against one EU country without abandoning barriers against all of them. Explaining this to Brexiteers could take quite a while: Brexit has never been a reality-based project and the real-time tutorial in the mechanics of the EU and its internal market will continue. The two-year transition period extends effective full membership, including European Court and free movement, up to March 2021, and it could be extended. The longterm relationship is still to be, as per the UK government’s stated position, a free trade agreement negotiated as a third country, with the UK operating outside the EU’s common external tariff. Third-country free trade agreements involve trade barriers, including customs controls. The impossibility of a third-country deal which avoids an Irish border will be uncovered as the negotiations proceed. Unless the commitments on Ireland contained in last Friday’s Brussels document are to be dropped, the UK is now committed to de facto retention of single market rules and a new customs arrangement tantamount to continued membership. This has not been acknowledged by Brexiteers, the split in the Tory party continues and the eventual outcome remains unclear.
The full-on Brexiteer response to Friday’s announcement has already been articulated by cabinet minister Michael Gove. The British people will be in control, he assures us, of whatever deal emerges and, he believes, perfectly free to reject it. He does not go into detail about what happens after rejection. With a naval blockade of continental Europe no longer within the capacity of the Royal Navy, what happens next, inevitably, is a resumption of negotiations and a revised agreement.
One of the principal architects of Mrs May’s hard Brexit stance, agreed in the early months of her premiership in the summer and early autumn of 2016, was an adviser in 10 Downing Street called Nick Timothy. He was also, it has been reported, an enthusiast for the snap election which cost the Conservatives their House of Commons majority and was fired in the aftermath.
Undeterred, he has resurfaced as a regular columnist at The Daily Telegraph, where he has been dispensing advice to the surviving protagonists in the Tory psychodrama that Brexit has become.
Ten days ago, Mr Timothy, who is 37, turned his attention to what he perceived to be the error-strewn performance of Leo Varadkar (38), describing the Taoiseach, with no doubt sincere concern, as ‘Ireland’s young and inexperienced prime minister’.
There is no pattern of events in the real world which will deflect Brexiteers, since the project is not about the real world at all.