Due to the late hour, and the news regarding May having gotten the DUP enough in line so as to get a green light from the European Commission on its Ireland fudge (more on that soon) being heavy on PR and light on facts and analysis, this post will be terse, with hopefully a more fleshed out take over the weekend.
The press is greatly exaggerating the significance of this deal. Some headlines are declaring the EU and UK to have reached an “exit deal”. This is not a deal. Nothing is final. This is the UK having presented what is at best a letter of intent on the three issues that the EU had deemed necessary for the UK to have demonstrated “sufficient progress” to be allowed to talk trade.
May has made contradictory promises and something or somethings will have to give. The big headfake is on Ireland, which was the apparent sticking point early this week. Nothing has been resolved here, save the DUP has chosen to stand down for the moment.
This is the solution to the Northern Ireland border problem in the joint technical note… it’s basically a post-it note saying ‘fix later’ pic.twitter.com/Poqx0N0qSy
— Jon Stone (@joncstone) December 8, 2017
As PlutoniumKun said via e-mail:
On the face of it, the Irish government has surrendered to the early BS British offer of some sort of magical IT tech solution to the border. I don’t know if they are aware of this, or they hope they can screw things down in more detail later. I think they have significantly weakened their position by conceding that there may be a technical solution to an open border.
The DUP may have realised that if they block a deal, that could mean an election and Corbyn. They are genuinely terrified at that prospect. So I think they’ve backed away from the abyss, rather than actually agreed to anything.
The contradiction is the continued pretense that the UK can have a hard border nowhere with respect to Ireland and still leave the Single Market and the EU customs union. May’s statement stressed tha there would be no hard border, which has meant land border, in Ireland. The DUP’s Arlene Foster said, per the BBC, that “…she was ‘pleased’ to see changes which mean there is ‘no red line down the Irish Sea’.”
The mystery: why is the EU enabling a tentative deal that isn’t workable? Let us not forget the history. EU leaders, who remember are the real deciders, have said with a unified voice since the day after the Brexit vote that any deal has to be consistent with the framework of existing pacts. The UK is not going to get any special favors. Experts on trade issues like Richard North have gone on long form as to why the UK will either have to have a hard border or else submit to all UK regulations regarding any traded goods, which also would mean submitting to the jurisdiction of the ECJ on those matters. There is no way to have anything less than a hard border absent that because Ireland would otherwise become a backdoor for all sorts of non-complaint goods to flood into the EU.
North has ventured that Juncker and May are treating the border and other issues as mere political problems that can be solved with the right optics, when that won’t work for a whole host of reasons we’ve described in detail before. His theory is that for some reason, the EU does not want the negotiations with the UK to fail at this juncture.
Perhaps the EU thinks it might be able to gradually muscle the UK into accepting a deal that has it in the customs union. The EU has the vastly better cards and already got the UK to concede on the supposedly “no how, no way” issue of the Brexit bill. They may think if they make the UK take its negotiating losses gradually, they can move the UK to what is not much of a Brexit.
However, if the EU is merely trying to kick the inevitable negotiation impasse down the road a few months, letting May have her December “breakthrough” and “no hard border” talk will further reinforce the UK fantasy that it can have its Brexit cake and eat it too. In other words, Juncker, Barnier, and Tusk are undermining all of the efforts of EU leaders to have the UK get real about what sort of a pact it can have.
The hard core Brexit MPs for the moment seem to be backing May. But this appears to be based on the misapprehension that May has done anything more than promise everyone what they want to hear and not have the EU call her out right now. From the Financial Times (hat tip Richard Smith):
Michael Gove has praised the “tough” negotiations from prime minister Theresa May that have led to the agreement on moving forward with Brexit talks. “Theresa May won,” he said, in a blessing from the Conservative Eurosceptic wing.
Note I have yet to see reactions from Johnson and Rees-Mogg, so Gove could be out over his skis.
But other important Brexit factions are upset. Again via Richard Smith:
READ | @Arron_Banks calls on any Tory backbencher “with any integrity or sense of duty left” to trigger a leadership contest and help save the Brexit 17.4 million people voted for! pic.twitter.com/qHb06qFcn8
— LEAVE.EU 🇬🇧 (@LeaveEUOfficial) December 8, 2017
And the reaction of the Daily Mail does not bode well either. Headline:
Now for the hard part! May FINALLY gets breakthrough on EU divorce deal but faces Tory anger at ‘unacceptable’ £40bn bill and meddling by European judges – while Eurocrats are already demanding MORE concessions
But in a clear sign that the hard work has only just begun, European Council chief Donald Tusk immediately started making demands about the next phase of talks.
He said during a mooted two-year transition period Britain will have to keep making financial contributions and respect all EU laws, including new one, even though this country have no say over how they are decided.
In a scathing assessment, ex-Ukip leader Nigel Farage said: ‘A deal in Brussels is good news for Mrs May as we can now move on to the next stage of humiliation.’
Former deputy PM Nick Clegg, a fervent Remainer, said it amounted to ‘game, set and match for the EU on money and EU citizens’….
The agreement published today sets out that there will be enough ‘regulatory alignment’ with the EU to keep a soft border between Northern Ireland and the Republic and ‘support North-South cooperation’.
But it also specifies that there will be no ‘regulatory barriers’ between Northern Ireland and the rest of the UK and the province’s businesses will continue to have ‘unfettered access’ to the UK internal market.
As we’ve stressed, the regulatory alignment finesse is simply not workable, and it separately is a red flag to the rabid Brexit faction. However, they lost on the supposed red line of money. Can they be pushed further backwards even as they try to pretend they are holding the line?
The European Council could issue a statement with some coded barbs in it. It seems highly unlikely that the European Council would withhold approval next week. But European leaders may not be happy with how much fudging has gone on. If their statement highlights issues where the UK needs to show more progress or clarify ambiguities, it should be read as not just an effort to manage UK expectations downward, but potentially a warning, or even a rebuke, to Juncker and Barnier.
PlutoniumKun’s initial take still makes sense:
I think the EU are content to keep a negotiating process going so they can slowly strangle the UK in its inability to come to terms with what Brexit means. They want to keep May twisting in the wind and not have to deal with a new government. Its a slow twisting of the screws – the UK will now perpetually find themselves unable to get around their own commitment on this, every single proposal they make will be met with ‘that means customs posts on the border, how do you get around that?’
The big reason this may not be as clever as it seems is that the press messaging that meaningful progress was made today increases the odds that UK businesses will dial down their Brexit damage containment measures. Corporations moving staff overseas or deferring investment would have put pressure on the Tories. The EU is resigned to a Brexit. It may have missed the possibility of precipitating a crisis merely by not indulging the UK on political fixes and getting a second referendum. Mind you, the odds of that were low, but the idea has gone from “complete non-starter” to “remotely possible” in just the last couple of months.
It may take a few months to see how things play out. With a whole set of new issues on the table, the UK may be able to keep enough balls in the air so as to keep MPs, the press barons, and the public distracted from the difficulty of its position.