A good deal for the UK?
MPs remain bitterly divided over Boris Johnson’s withdrawal agreement with the EU. How would it work?
How does his deal differ from May’s?
Not much, overall. Only two sections have changed from the earlier agreement negotiated by Theresa May. The rest of the legal document is exactly the same. If passed, it will guarantee that UK citizens in the EU, and EU citizens in the UK, will retain their residency and social security rights after Brexit. It makes all sorts of arrangements to ensure an orderly exit, including a transition period that lasts until December 2020 – until which time the UK will continue to apply all EU law. It preserves the same financial settlement: Britain’s divorce payment is currently set at around £33bn. The most substantial changes come in the “Protocol on Ireland/Northern Ireland”, where a new compromise has been reached on “the two Cs”: customs and consent.
Which side compromised?
Both sides. The EU said it would never reopen the withdrawal agreement. It did, and it offered new concessions – agreeing to scrap the controversial Irish “backstop” (the idea that if satisfactory arrangements could not be made to deliver an invisible border between Northern Ireland and the Republic, then the whole of the UK would stay within the EU customs union, meaning that it would not be able to strike its own trade deals – a major goal for Brexiters). London, however, has made the more radical concessions. Johnson, like May, had previously categorically rejected any customs border between Northern Ireland and the rest of the UK. He has now accepted this as inevitable.
How will the new customs system work?
Northern Ireland will effectively remain inside the EU’s customs union and its single market for goods. Its farmers and companies will follow EU regulations, meaning milk or machinery will be able to cross the border unhindered. At the same time, it will legally remain inside the UK customs territory, so that it too can benefit from new trade deals. The price for this is that UK customs officials will check goods at British ports before they enter Northern Ireland. Goods will be able to pass without paying tariffs if deemed not “at risk” of entering the EU single market. If the goods are “at risk”, then tariffs will be paid, but claimed back if they end up in Northern Ireland. This will protect the EU from having cheap foreign products – say, US chlorine-washed chicken, or Chinese steel – dumped on its internal market.
It sounds complicated. Is it?
Very. The UK has done what it can to make it simple: for instance, there will be no checks on goods entering Great Britain from Northern Ireland. But it requires a complex system of custom declarations for goods crossing the Irish Sea the other way, with “red” or “green” channels, depending on the type and destination of goods. Northern Ireland will remain subject to swathes of EU law which won’t apply in the rest of the UK, such as manufacturing and labelling rules, and it will also remain inside the EU’s
VAT regime, so that Northern Irish goods don’t have an unfair advantage over those from the Republic.
How will Belfast “consent” to this?
The new arrangements will take effect immediately after the Brexit transition period ends in December 2020. But after four years, the Northern Ireland Assembly will be given a say. If it approves them, the trading rules will apply for a further four years. The decision would be made by simple majority: the Republic of Ireland did not want the unionist side – effectively, the DUP – to have a veto. And if the arrangements win “cross-community” support from both unionists and republicans, they will apply for a further eight years. But if they fail to win even a simple majority, the new rules will extend for only two years – during which time a new system will have to be worked out.
Why does the DUP oppose the deal?
The arrangement leaves Northern Ireland still with a foot in the EU, which is economically advantageous, while keeping it in the UK customs territory. Polls suggest that a clear majority support it in Northern Ireland, and certainly prefer it to a no-deal scenario. However, it cuts across the Good Friday Agreement, which was built on the principle that a majority of both communities was required to take major decisions. And in the long term, if British regulations diverge heavily from EU rules, then Northern Ireland will effectively be carved out of the UK’s economic zone, and will become part of the EU’s. This is why the DUP entirely rejects it, and why many see it as a step towards a united Ireland.
What’s the second major change?
May’s deal contained an Annex 4, which committed the UK to “open and fair competition … to ensure a level playing field”. This was inserted by the EU to limit the UK’s capacity to gain what it sees as an unfair advantage by lowering standards in, for instance, social security or employment laws. Annex 4 has now been removed from the withdrawal agreement, which is legally binding, and put in the “Political Declaration” – the accompanying statement on the future EU-UK relationship – which is not binding.
Is the deal a good thing?
The withdrawal agreement is only the end of the beginning: the future depends on the shape of the eventual free trade deal (see box). But this deal would allow the UK to recover its sovereignty and pursue an independent trade policy, which is why most Brexiters support it. And it does so in a form that Brussels finds acceptable, because it avoids a hard border in Ireland and preserves the integrity of the EU single market. It also has the advantage of being a workable plan that respects the 2016 referendum result, unlike anything put forward by the pro-Remain camp. The price for that is that it makes significant changes to the UK, which may become permanent.