BREXIT — WHAT NOW?

The logic of a soft Brexit is sinking in finally in London, but the Northern Ireland Backstop could still collapse the exit talks, writes Dan O’Brien

‘No country has ever signed up to such a clause in an international agreement’

THE long, slow, grinding process of presenting Brexiteers with the trade-offs Britain faces as it leaves the EU has ground out another success. Last Friday night, the British government signalled it was moving closer to being willing to remain something akin to a de facto member of the EU after it leaves next March. As of yesterday afternoon, none of the pro-Brexit members of cabinet had resigned.

That was despite prominent — and predictable — claims of betrayal by pro-Brexit hardliners. To underscore her victory over the leavers, Theresa May stated that collective cabinet responsibility on Brexit policy was being restored in full. This is a positive development from an Irish perspective, even if there will be many more twists and turns in the months and even years ahead on Brexit and the risk that talks will fail remains real. Last Friday night’s announcement reduces that risk, and along with it the damaging and disruptive chaos that would accompany a no-deal departure.

A path to a soft Brexit that is in Ireland’s interests is more clearly visible today than it was a week ago. But the “Backstop”, which would see Northern Ireland carved out of the UK’s single market if the new EU-UK deal requires even the slightest change to the border on this island, remains as big an obstacle as ever.

I have had dozens of conversathe tions with people from many different countries who are involved, close to or who have professional insights into the negotiations. There are, as one might expect, many different views on many different aspects of a massively complex process. But there is no disagreement among people involved in the process as to how big this issue is for the British state.

Anybody who is involved in the world of diplomacy and who has thought through the implications knows it is of a completely different order to, say, allowing Northern Ireland companies to pay less corporation tax than their counterparts across the water. Even officials from countries which fully support Ireland cannot see how Britain can sign up to anything which could see the North removed from the British internal market.

To see why this is the case, some elaboration on the nature of the powers of governments is needed. The next few paragraphs may be a bit technical, but as the matter is so central to the Brexit negotiations it is worth setting out in some detail.

Some government powers can be devolved to regions. Some cannot.

An example of an easily devolved power is tax. In the US, both the federal and state governments have the power to levy income tax. The degree to which the share of tax goes to the different levels of government can move along a spectrum. In Canada, for instance, state governments (Ontario, etc) raise as much overall tax as the federal government. In Germany, another federation, taxation is tilted toward the centre, with the government in Berlin taking two-thirds of all taxes raised in the country.

Other powers cannot be shared and can be exercised only by one level of government. They are ‘either/or’ powers. Foreign policy is one example. The US government, for instance, has only one vote at the UN Security Council. It cannot give a share of its vote to, say, Alabama. It cannot vote 95pc in favour of sanctioning the Syrian regime because the governor of Alabama opposes such sanctions and wants 5pc of the vote.

Powers of customs and international trade are similar, as is clear in Europe where Brussels, not national capitals, has ‘exclusive competence’ in the area. In all single markets, the adjudicating power is also centralised. That is why in Europe, EU law is supreme over national laws when the two clash.

The logic of centralising the international trade and customs function is what has guided US courts over centuries and the EU courts of decades to strike down measures by, respectively, states and members states, which threaten the integrity of their com- mon customs unions and single markets.

If this all sounds a little theoretical in relation to the Backstop proposal, one need look only at the hundreds of international trade treaties registered at the World Trade Organisation. There is no example anywhere of one trading entity having a region of another entity carved out and treated differently, as the Backstop would result in.

Seeking to have Britain agree in principle to do what no other country has ever done is widely and deeply opposed far beyond the lunatic fringe of Brexiteers.

Dominic Grieve leads the proEU Conservatives in the House of Commons and opposed exiting in the 2016 referendum. He has been at the forefront of seeking to prevent a hard Brexit. He is known and respected in this country as somebody who knows and respects Ireland.

While he has been at odds with his prime minister frequently and publicly, in a recent speech he said the government was correct in its position that a customs border in the Irish Sea was “incompatible with the Union and, therefore, national sovereignty”. He went on to say that he “had not come across a single MP in Westminster who could accept such a proposal”.

Another knowledgeable and respected political figure in political and business circles in the Republic is Steve Aiken, the Ulster Unionist Party MLA who campaigned to remain in the EU in the referendum. In this newspaper today, he writes bluntly: “We see the Backstop as very clearly undermining the constitutional integrity of the United Kingdom.”

The views of the anti-Brexit UUP have got very little coverage on this side of the border and many people believe that opposition to a Northern Ireland carve-out is confined to reactionaries in the DUP. It is not. The vast majority of unionists see a carve-out as Aiken does.

The Backstop proposal has come with a much under-discussed cost of causing very significant damage to the relationship between the Irish State and unionism, something that must be unwelcome to all on this island who want reconciliation and accommodation between the traditions. (It should be acknowledged that the appointment of Drew Harris as Garda Commissioner was a powerful positive signal to unionism about inclusiveness in the Republic and goes some small way to repairing the damage caused to relations with the minority tradition.)

Last Friday ,the EU’s lead Brexit negotiator, Michel Barnier, speaking at an event organised by the Institute of International and European Affairs (where I work), again insisted that Britain sign up to the Backstop. If it does not, then there will be a no-deal exit, something almost everyone believes would be disastrous.

Barnier spoke of “de-dramatising” the issue — a word that has been used before and will likely be used a lot more in the coming months. That, however, will be hard, if not impossible, to do. No country has ever signed up to such a clause in an international agreement. It would be a real tragedy if the countless hours of work that have gone into grinding down the Brexiteers were to succeed, but Britain ends up leaving with no deal because it cannot sign up to the Backstop. That, alas, remains a very real possibility.