The Dawning Reality of Brexit

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June 13, 2018 06:01 EDT

The fact that the UK has not made up its mind about Brexit and has yet to make a detailed proposal is disquieting, says former Irish Prime Minister John Bruton.

At a recent conference, I heard Owen Patterson, a Conservative MP and former secretary of state for Northern Ireland, say that the United Kingdom should renege on the “backstop” agreement on the Irish border given by British Prime Minister Theresa May to EU negotiators. He admitted that Irish public opinion “hates Brexit,” but seemed to expect the Irish government to make Brexit easy for the UK. That is naive.

At the same event, Lord Alderdice, former leader of the Alliance Party of Northern Ireland, said the 1998 Good Friday Agreement came about because the protagonists put the emphasis on developing new relationships between the communities in Northern Ireland, rather than on detailed rules and economic questions.

Business, Not a Relationship

It seems that the absence of this sort of broad thinking in the UK about the European Union led to Brexit. British public opinion saw joining the EU as a business transaction, instead of a long-term relationship-building exercise.

When then-Prime Minister David Cameron decided to hold a referendum in 2016 on leaving the EU, it didn’t occur to him to call a meeting of the British-Irish Intergovernmental Conference, which was set up under the Good Friday Agreement, to explore how this might affect relations between the UK and Ireland, between North and South, and consequently within Northern Ireland. This was myopic. It demonstrated a lack of seriousness, which persists today.

A similar myopia affected the UK relationship with the EU as a whole. UK decision-makers saw the European Union in purely functional terms, rather than as a means of developing new relationships. The UK still hopes to negotiate access for itself to the customs union and single market, without joining either of them and without allowing the free movement of people that all EU members grant to each other, or accepting that the rules will be interpreted by the European Court of Justice (ECJ).

This is unrealistic. Any dilution of freedom of movement would require an amendment of the EU treaties, which would require the unanimous agreement of all 27 EU states. This will not be forthcoming. The ECJ is essential to ensure uniform interpretation of market rules, especially in services.

British politicians and opinion formers forget that the EU is a rules-based organization, with a common system for making, interpreting and enforcing the agreed rules. In this, the EU is different from other international bodies. The treaties founding the EU are the equivalent of a written constitution, which is hard to amend. As the UK has no written constitution of its own, it finds this difficult to accept. These differences in perspective between the EU and the UK will continue to cause trouble, unless British politicians educate their electorate about the nature of the union.

The Irish Border

At this stage in the negotiations, the UK is seeking to interpret Article 49 of the Joint Report, the so-called “backstop,” to cover the whole UK, not just Ireland. The wording of the is as follows:

“49. The United Kingdom remains committed to protecting North-South cooperation and to its guarantee of avoiding a hard border. Any future arrangements must be compatible with these overarching requirements. The United Kingdom’s intention is to achieve these objectives through the overall EU-UK relationship. Should this not be possible, the United Kingdom will propose specific solutions to address the unique circumstances of the island of Ireland. 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.”

Reading the paragraph as a whole, it is clear that it is about Ireland, not the two islands. In any event, there is no possibility of the other EU countries allowing the entire United Kingdom to enjoy the benefits of full access to EU markets simply by aligning its rules, but without allowing free movement of people and accepting the jurisdiction of the ECJ.

The UK government is committed to having a frictionless border in Ireland and is considering two possible customs arrangements with the EU to achieve this.

The first is a customs partnership, which would see the UK collecting the EU tariffs on goods entering the UK but destined for the EU, and then passing the money on to Brussels. It is hard to see the EU subcontracting its revenue collection to an external power over which it has no control. The Palestinian experience of subcontracting its revenue collection to Israel has not been a happy one.

The second customs option, called “maximum facilitation, entails doing the customs controls — currently done at the border — remotely using technology. This technology is untried and there would be data protection and privacy concerns. It would still entail the preparation of customs declarations for all consignments of goods. This bureaucracy will add between £17 billion ($22.7 billion) and £20 billion to business costs, or £32 per declaration, according to the UK revenue authorities. This will make trade unprofitable in many cases.

The fact that, even at this stage, the UK has not made up its mind between these options and has yet to make a detailed proposal is disquieting. The EU will not be bounced into agreeing a half-baked proposal, presented just before the EU summit later this month, which attempts to evade the consequences of the UK’s own decision to quit the single market and customs union. Those decisions were taken by Prime Minister May, not Parliament, and should be reversed.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

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