20 May 2020

Federal Trust's Blick: Weaponising the Exit Agreement: the ongoing Irish dimension of Brexit

Prior to the referendum of 23 June 2016, little attention was given at UK level to its possible implications for Northern Ireland. But in the wake of the ‘leave’ result of 23 June 2016, many issues that – though knowable in advance – were neglected, now became impossible to ignore.

Northern Ireland is a focus for a number of complications associated with Brexit for the following reasons:

• It contains within it a land border between the EU and the UK;

• It is the site of a longstanding conflict that is the subject of a peace agreement. This agreement, the most important expression of which was the Belfast or Good Friday Agreement of 1998, previously rested on the clear assumption of continued UK membership of the EU. It also requires a close relationship and free interchange of people and goods with the Republic of Ireland in the south; and recognises that decisions about the future constitutional status of Northern Ireland are subject to the people living there, and are not subject to the state sovereignty claims of the UK or the Republic. Aspects of the Agreement were approved by referendums both in Northern Ireland and the Republic in 1998.

• Related to this conflict, there is an historic division in the territory over whether it should be part of the UK, or joined with the Republic of Ireland;

• It produced a ‘remain’ result in the 2016 referendum, contrary to the overall ‘leave’ outcome of the UK.

• Within the (majority) Protestant community, historically of a Unionist orientation, there was a ‘leave’ majority, while among the (minority) Catholic, historically nationalist community, there was a (larger) ‘remain’ result.

Successive UK governments have insisted on interpreting the referendum result as meaning more than formal departure from the EU institutions. With a degree of logic to support them, they have held that leaving must entail a substantive break from the EU. Aside from the prospective economic difficulties such a course of action creates for the whole UK, it raises particular problems from the point of view of Northern Ireland, because of the characteristics of the territory as discussed above. For purposes of the present discussion, it is a given that the UK envisages divergence in tariffs and regulatory arrangements from the EU. Through this discrepancy it will seek to secure a competitive advantage over the EU, including in pursuing preferential trade agreements with other states and blocs. In these circumstances, a post-Brexit arrangement for Northern Ireland that satisfies both the EU and the UK while avoiding destabilisation of the peace process is difficult to achieve. The most contentious aspects of the exit agreement were intended to achieve this outcome. They were designed to come into force, and will be required, whatever broader deal the EU and UK may reach otherwise, or indeed if they achieve no agreement at all. To avoid the appearance of a hard border on the island of Ireland and protect the integrity of the European Single Market, it was agreed between the EU and UK last October that, post-Brexit, a degree of regulatory and customs alignment will be retained between Northern Ireland and the EU.

Yet while the Northern Ireland provisions might seem to be insulated from failure in the diplomatic processes between the EU and UK, the reality is more complex. Were the UK making serious and meaningful progress towards a Free Trade Agreement with the EU, then pragmatism alone might suggest that it would wish to observe commitments made over Northern Ireland. But there is good reason to believe that the Johnson government has other ideas. The exit deal reached between the Johnson administration and the EU, subsequently approved by the respective parliaments of the UK and EU, creates transitional arrangements that ensure continuity until 31 December. The same agreement also provides for extensions of the period by one or two years. Any such prolongation would require agreement from both parties and would have to be activated by 1 July 2020. From the outset, to suppose that the EU and UK could devise and agree a meaningful Free Trade Agreement (FTA) within the initial timeframe was to stretch credulity. The immense disruption brought about by the Coronavirus pandemic makes such an achievement – for practical reasons alone – seem harder to attain still, especially since there is evidence of a gulf between the two sides over objectives. It seems that the UK hopes to address discrete aspects of the future relationship on which swifter progress can be made, and deal with others later. The EU, conversely, might prefer a more comprehensive approach, being reluctant to lose any leverage that the ability to withhold an agreement in its totality might provide.

For those who still wish to imagine that the UK approach to Brexit can be some kind of exercise in economic and political rationality, then a mutually agreed extension to the transition period would seem likely. In the context of what might prove to be the largest global economic downturn in history, it might seem implausible that either side might wish to create further disruption and insert new barriers to trade. These concerns might appear to weigh particularly heavily on the UK, which, as the smaller party, has more to lose by restricted access to EU markets, at a time when there would seem to be few benefits to reap elsewhere in the world. In such a scenario, the Northern Ireland aspects of the exit agreement would seem secure.

However, to seek an extension clashes with the political imperatives that the Johnson government has defined for itself from the outset, and on which it contested the 2019 General Election. Depicting Brexit as ‘done’ remains fundamental to its purpose; and an integral part of this presentational exercise is that the transitional period comes to an end at the close of 2020. During the Coronavirus episode, the public stance of the UK government has been that there is no change to this position. On its present trajectory, the UK seems firmly set on reaching the end of 2020 without any trade arrangements with the EU beyond those provided by WTO membership.

The destructive approach that the UK now seems to be taking towards negotiations with the EU has particularly difficult implications from the perspective of Northern Ireland. The UK appears to be weaponising the issue of fulfilment of previously reached agreements with regard to the status of Northern Ireland. It is doing so perhaps with a view to pressurising both the Republic of Ireland and the EU as a potential no-deal scenario looms, or in the uncertain aftermath of such an eventuality, when an agreement of some kind will presumably still need ultimately to be reached.

One issue that has arisen involves the enforcement of aspects of the exit agreement that are internal to the UK. Since the UK is set upon adopting arrangements that differ significantly from the EU, achieving continuity for Northern Ireland will necessitate divergence between Northern Ireland and Great Britain and the presence of an internal enforcement barrier. For the exit agreement to work satisfactorily, the UK needs to ensure that it is in compliance with this particular requirement; and the EU has to be able to verify with confidence that it is. It is necessary for the UK to install infrastructure on the ground to apply the relevant controls. At present, the EU is apparently not content with progress that is being made by the UK in this regard. Furthermore, the European Commission needs to have a presence in Belfast, to enable it to ensure that the process is functioning properly. The EU judges that it needs a permanent office, as opposed to temporary visits by its officials, to perform this complex and demanding task. In any circumstance, the external party to this agreement would probably require some kind of capacity to monitor compliance. This need is heightened by a decline of trust between the UK and EU in this regard. Johnson, for instance, has previously held – in bald contradiction of the terms of the agreement – that there would be no regulatory bureaucracy involved. Moreover, the aforementioned perception that the UK has stalled on the establishment of the necessary infrastructure is another source of doubt. In such circumstances, it is unsurprising that the EU has asserted the need for a fixed base in Belfast. The obstacles now raised by the UK to this measure have both worsened this relationship and confirmed for the EU its need to insist on such provision.

The UK has sought to present its position in terms of preserving the Northern Ireland peace process. An EU presence in Northern Ireland, the argument runs, would be intolerable to the radical Unionist community, and should therefore be avoided. However, the purpose of the Northern Ireland provisions of the exit agreement was precisely to preserve the peace process and minimise the reckless destabilisation that Brexit threatens. To present an approach that would amount to a failure meaningfully to fulfil the terms of the exit agreement as being a means of protecting peace is disingenuous. The fundamental problem, anyway, is that Brexit itself, however it is realised, is a problem for the peace process. Insistence on its pursuit – and in the particular, disruptive form to which the UK government is wedded – necessitates choosing between a series of choices to mitigate its negative consequences, none of which are attractive, and all of which are inferior, from the point of view of regional stability, to the UK remaining within the EU.

The UK stance points to a series of possible options:

The first is that a hard border returns to the island of Ireland, representing a clear breach with the terms of the peace process, along with economic, social and political disruption for both the Republic and Northern Ireland, as well as the UK and EU.

The second is that the EU, to protect Ireland from such an outcome, tolerates an open border with the UK despite its intention not to adhere to the customs and regulatory arrangements of the EU, thereby threatening the basic integrity of the single market.

The third is that the UK introduces an internal barrier between Great Britain and Northern Ireland, enabling the latter to retain alignment with the EU while remaining within the UK. This option was seemingly initially favoured by the EU. The UK under Theresa May found it politically unpalatable because of the implications for the integrity of the UK as a single state. Johnson, however, committed the UK to just such a commitment – the fulfilment of which the UK is now proving reluctant to enact.

A fourth option would be for Ireland to diverge from the EU and follow the lead of the UK in areas that previously came within the European remit. The inflammatory nature of such a proposition, with all the threats to peace and stability entailed, should be apparent to anyone with even the vaguest knowledge of Irish history. Yet it is a clear possible direction in which UK policy points.

Of the options above, the third seems the least imperfect, but the UK is either unwilling to make good on its commitment to deliver it, or is at least trying to use the prospect of non-compliance as some kind of bargaining tool, which might lead to the same outcome anyway. This blockage leads to a fifth possibility: the departure of Northern Ireland from the UK and its joining, within the EU, with the Republic of Ireland. This possibility is allowed for in the Belfast/Good Friday Agreement, subject to a referendum. Politically it creates many challenges. The UK government would have to agree to the referendum taking place; and were it to produce a majority in favour, there would surely be a significant minority who were – to put it mildly – displeased with the outcome. We should not assume universal enthusiasm in the Republic over the absorption of this territory. But it is important to begin considering this possibility, since the present condition of the Brexit negotiations, driven by the political stance of the UK government, could necessitate radical thought. In particular, it is worth giving consideration to how far federal arrangements for Northern Ireland – whether within the UK or within the Republic – could help minimise the threats posed by UK departure from the EU without adding new tensions and difficulties in the process. Any solution attempted needs also to take into account the relationship between the island of Ireland and the different components of the UK, including Scotland and Wales, where – once again – federal thought may be useful.

 Federal Trust

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