The agreement between the British government and the European negotiators led by Michel Barnier, lays down the foundations for the implementation of the effective withdrawal of the UK from the EU as well as the relationship that the Europeans and British will try to build in the future.
A – A RENEGOTIATED AGREEMENT TO AVOID A “NO-DEAL”
Given the threats made by Boris Johnson, appointed Prime Minister on 24th July last by Conservative Party members, to exit the Union on 31st October, with or without an agreement, the European accepted the re-examination the most controversial part of the withdrawal agreement - the “backstop” on the Irish border. [...]
1. Common concession for a new agreement - Northern Ireland, in and out
One of the EU’s three main goals was to maintain an open border between the British province of Northern Ireland and the Republic of Ireland. This obligation, acknowledged by the UK, resulted from the Peace Agreement of 1998, the so-called Good Friday Agreement, which re-established peace in Northern Ireland.
According to the agreement concluded on 17th October Northern Ireland will leave the European Customs Union after Brexit with the rest of the UK and will be part of a new British customs territory. In virtue of this it will be included in the UK’s free-trade agreements that the latter will conclude with third countries.
This is the main difference with the backstop, provided for in the initial withdrawal agreement, which planned that if no alternative solution were to be found to prevent a “hard border” on the island of Ireland, all of the UK would remain in the European Customs Union. This status quo, would have prevented the UK from having its own trade policy and was one of the main reasons for the triple rejection of the agreement by the House of Commons in the spring of 2019.
Northern Ireland’s exit from the Custom’s Union is the main concession made by the Europeans, who deem that the upkeep of Ulster in the community area was the best guarantee to maintain an open border and to guarantee the integrity of the European Single Market.
However to attenuate the destabilising nature of exiting the Customs Union, Ulster will remain aligned with the EU’s single market rules regarding goods, veterinary and phytosanitary controls, agricultural products and State aid.
Similarly, although Northern Ireland will be out of the Customs Union, it will continue to follow the EU’s customs code as far as goods entering its territory will be concerned. European excise duties will be applicable on products that arrive in Northern Ireland from third countries but also on those arriving from Great Britain and which are “at risk of subsequently being moved into the Union”. British excise duties will apply to goods from third countries and which are only destined for the Northern Irish market. No duties will apply to goods from the rest of the UK which are only designed for Northern Ireland.
Checks at the points of entry will be operated by the British customs authorities in cooperation with European officials, who will be able to request specific inspections. And the procedures will be covered by the jurisdiction of the European Court of Justice.
A Border in the Irish Sea
The alignment of Northern Ireland with European rules is the main concession made by Boris Johnson, since it involves customs checks at the ports and airports of Northern Ireland, including on British goods. It is therefore a kind of “border in the Irish Sea”, which Theresa May and Johnson himself rejected in March 2018 when the EU proposed a backstop that kept Northern Ireland in the Customs Union. It was also because of this rejection that the EU accepted that the whole of the UK should remain in the Customs Union, thereby precipitating the rejection of the withdrawal agreement.
Checks will also be necessary between Great Britain and Northern Ireland from a tax point of view. In terms of the revised protocol, VAT will be levied by the UK in Northern Ireland, according to rules to be established by the British authorities. However, European VAT rules will apply to goods, so that checks on the border will not have to be made and to protect the integrity of the single market. Moreover, exemptions and reduced rates in force in Ireland will also apply to Ulster, to guarantee a level playing field between the two parts of the island.
The “backstop” turns into the “frontstop”
The new protocol will apply automatically at the end of the transition period following the UK’s departure – planned in December 2020, with one possible postponement of one or two years. This is the second major difference with the backstop set out in 2018, which would have entered into force as a “solution of last resort” in the event of no alternative mechanism being found before the end of the transition period.
The very principle of the backstop is now null and void since the alternative solution that would have prevented it has been found. This allows B. Johnson to claim the end of the “backstop” which he, the radical Brexiters and the Unionists of Northern Ireland deemed unacceptable.
In return the Europeans have the guarantee that neither the open border in Ireland nor the integrity of the Singe Market will be threatened by Brexit; they can also be certain about the future regime on the island, whatever the shape or form of the future economic relations between the UK and the EU. A situation that the British have named by analogy, the “frontstop”. [...]
Conditional continuity
The Europeans have however had to make a second major concession: the durability of the solution now to be introduced will depend on the Assembly of Northern Ireland. Four years after its entry into force, the protocol will have to gain the consent of the majority of the Northern Irish MLAs (Members of the Legislative Assembly).
If a simple majority of the Assembly consents, the protocol will be extended by 4 years. If consent is given by a crosscommunity majority – a simple majority of those voting including a 60% majority of unionists and 40% nationalists – the protocol will be extended by 8 years. [...]
2. The redefined future relation
The path of free-trade
The political declaration that goes together with the withdrawal agreement covers all areas that comprised the UK’s membership of the EU and for which new arrangements will have to be made before the end of the transition period, planned for December 2020. [...]
Against Singapore-on-Thames
The political declaration 2018 maintained that “the future relationship must ensure open and fair competition” and that the parties should “consider the precise nature” of their commitments. [...]
“The withdrawal of the UK will lead to the birth of a competitor, alongside China and the US. Europe has to show what it can do,” warned German Chancellor Angela Merkel.
Via the re-opening of the political declaration, the European achieved a strengthening of Britain’s commitments in terms of fair conditions in comparison to the text concluded in 2018.
The new declaration stresses that “the United Kingdom's geographical proximity and economic interdependency” require “robust commitments” on both sides to maintain fair conditions. Hence “the level of ambition of our future free-trade agreement will be proportional to the level and quality of the rules of the economic game between us.”
To do this the UK will have to “uphold the common high standards applicable in the Union and the United Kingdom at the end of the transition period in the areas of State aid, competition, social and employment standards, environment, climate change and relevant tax matters” [...]
3. Questions pending
Definition Work
Although the new protocol allows for a Brexit with an agreement after many postponements and weeks of uncertainty, it does not settle all of the issues raised by the problem of Northern Ireland. [...]
B. BREXIT STILL ON HOLD
1. British dead ends and hypotheses
The motion prepared by the British government for the approval of the withdrawal agreement and the political declaration was not adopted or rejected by the House of Commons on 19th October. The vote on the motion was postponed after the adoption of an amendment – made by Conservative MP Oliver Letwin –which stipulates that Parliament “withholds approval unless and until implementing legislation is passed.”
The adoption of this amendment forced Boris Johnson to implement the Benn Act, adopted by the Parliament in September, which stipulated that the Prime Minister had to ask the EU for an extension until 31st January, if on 19th October Parliament had not approved the withdrawal agreement. [...]
The situation opens the path to many possibilities.
Scenario 1: rapid ratification
The simplest and most immediate is that the House of Commons adopts legislation to effect the exit of the Union quickly so that the Europeans do not have to decide on the request for an extension and that the European Parliament ratifies the withdrawal agreement as fast as possible. [...]
Scenario 2: elections
Boris Johnson might try to call for new legislative elections in order to modify the balance of power in his favour in Parliament.
To do this, in virtue of the Fixed-Term Parliaments Act of 2011, the Prime Minister must win a 2/3 majority of the House of Commons. [...]
Scenario 3: a second referendum
The revocation of article 50 of the Treaty on European Union, the procedure to exit the EU, is an unlikely hypothesis at this stage without there being a political majority or one within the population.
The last scenario and the most problematic is therefore a vote by MPs to organise another referendum on Brexit. A motion in this sense was rejected 292 to 280 votes in April 2019. But without an election to achieve a clear majority, a direct vote by the British would be the last resort in a bid to try and end the political deadlock.[...]
2. European expectations and patience
The dilemma of the extension
[...]It seems highly unlikely that the Europeans will reject the principle of an extension, but setting its duration is proving more difficult. The Benn Act stipulates that the government must ask for an extension until 31st January 2020, but the European Council is sovereign in terms of setting the date. It will do so according to the political situation and outlook in the UK, it will have to decide between the “long termers” who want to allow the British another chance and the “short-termers” who want the Union to focus on its future. [...]
The decision is being made more difficult due to Boris Johnson’s wish not to delay Brexit. Although the debates in the British Parliament make it impossible to achieve ratification in the short term, the Europeans will have to juggle, despite themselves, between two powers – the legislative, which is asking for an extension, and the executive which is refusing to do this. [...]
Long term goals
Since the referendum in 2016 and even more since the start of negotiations in 2017 the Europeans have made it their main goal, underpinning their method and objectives – to remain united and to “act as one”[2]. Unity has been maintained despite Britain’s attempts to divide the Member States and to circumvent the negotiator in chief Michel Barnier. This remains the base of the European position, whatever development in the situation and the possible differences that arise with each new extension. [...]
The proposal made by Ursula von der Leyen, to give the negotiation to Michel Barnier, is a way of ensuring continuity. Likewise, the attribution of the trade portfolio to Irishman Phil Hogan in the next Commission is a message sent to the British that unity around the “small” Member States will also be maintained. [...]
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