We had stuck our necks out yesterday and said it was likely that that Theresa May would be unable to deliver a deal on the Irish border in Brussels yesterday. We also said she’d given a few days more to try to stitch up a deal but that effort would fail.
Our forecast is holding up well, since as readers who have been following Brexit no doubt know, the negotiations were halted in the afternoon thanks to the DUP publicly repudiating the tentative Ireland deal based on a leak of some key language, and May has run back to the UK to try to stitch things back up. According to The Times, May has until Friday at the latest to get a deal back on track.
However, we were gobsmacked to see how humiliating the day’s developments were for May and even to some degree even for EU figures like Jean-Claude Juncker and Donald Tusk, who were clearly blindsided by the Tories’ coalition partner, the DUP, going into scorched earth mode against the UK’s Irish border solution. The blow up made it acutely visible that key parties to Brexit want things that are utterly incompatible.
The immediate sticking point is that the position of the Republic of Ireland and Northern Ireland on the border issue cannot be reconciled. As we stressed yesterday, the UK leaving the EU means there has to be a hard border somewhere.
The Republic opposes a hard border between the Republic and Northern Ireland (NI). Normally that might not be fatal since per Article 50, a Brexit deal requires the approval of a “qualified majority,” so Ireland could not veto a pact all by itself. But the EU has committed itself to defending the Republic’s interests, and it can’t back away from that pledge (or at least not quickly enough to resolve the current impasse).
NI, or more precisely, the DUP, the Tories’ coalition partner, had ruled out finesses to prevent the establishment of a hard border on land, such as having NI remaining in the single market, since they would increase the political integration of Ireland and also entail the creation of a hard border at sea.
It was hard to imagine any way to come up with a solution. Politico and the Daily Mail reported that the fudge that the EU negotiators and May had agreed upon and the Republic had accepted was, per Politico:
In return for giving the go-ahead for sufficient progress, May would agree to ensure Northern Ireland remained “aligned” with the Republic of Ireland over regulations affecting north-south border issues like farming, agriculture, energy and transport. Dublin, in turn, would drop its demand for Northern Ireland to effectively remain in the single market and customs union, something unacceptable to Brexiteers.
Mrs May is thought to be proposing an arrangement which would require the whole UK to retain ‘regulatory alignment’ with the EU on a narrow range of issues that affect the Irish border. These include energy, agriculture and transport.
Quite honestly, I don’t see how a “no hard border somewhere” arrangement can possibly work. Even applying an 80/20 or 95/5 prioritization of “aligning” rules for the thing that go across the Republic/NI border now does not solve the problem of Northern Ireland becoming a route for smuggling goods in that don’t comply with EU regulations. Let’s start with small size, high value good like pharmaceuticals. We already have a big problem in the US with what amount to bootleg pharmaceuticals getting into our distribution channels, such as medications past their sell-by date relabeled or repackaged to appear current, and dosages upmarked to sell at higher prices (eg, a 50 mg dose repackaged and sold as if it were 150 mg).
Richard North pointed out another reason this sort of thing won’t work:
The UK imports goods from all over the world and, apart from EU goods, applies border controls of varying sophistication, as well as the “official controls” on animals and foods, and other products. But once we leave the EU, to us, EU countries have to be treated the same as all other countries with which we trade, under exactly the same terms.
This is a matter of WTO rules – the one’s that so many “ultras” are so keen to pursue. The WTO non-discrimination requirements mean that, if we apply no checks to EU goods at the Northern Irish border, then we cannot apply them anywhere else. It really is as simple as that.
Needless to say, it was obvious to anyone paying even a little bit of attention to who wanted what on Ireland that the DUP would balk at this scheme. As our PlutoniumKun wrote:
I’m a bit astonished that anyone would have thought the DUP would buy the deal, they’ve been absolutely consistent (one thing you can say about Ulster loyalists, is that they don’t change their minds easily). And it’s not much of a secret that they’ve been getting large sums of money from pro-Brexit rich funders. I don’t have a particularly high opinion of May’s acumen, but even she and her advisers couldn’t possibly think the DUP would give in without a fight.
….there are some crucial, unresolved inconsistencies in this narrative to the extent that it hardly seems to hang together. First, and most important, it relies on the idea that Mrs May went to Brussels with a proposal that she must have known that the DUP would not accept – and then had to be dragged out of her meeting with Juncker to be told this.
Now, over months that Mrs May has been prime minister, we have largely come to terms with her incompetence. But it is nonetheless difficult to believe that, with the well-known and frequently rehearsed position of the DUP, she could go to Brussels with a proposal she must have known would by rejected by this Northern Ireland party. This is carrying incompetence to a new level.
Secondly, while much has been said of the Whitehall/Dublin deal, as far as I am aware, the full official text has not been made public. All we have to go on is an “early negotiating text” leaked to RTÉ News and “sight of a key phrase in the joint text”….
Further, we do not know whether this deal, apparently agreed between the UK and the Irish Republic, was necessarily agreeable to Brussels… As it stands, there is no possible way that Brussels could accept a situation where there was a soft border between the Republic and Northern Ireland, with no controls over goods from the mainland UK. This would open a back door into the Single Market which would be completely unacceptable to the remaining EU Member States…
This, then, leaves us with two implausible options. On the one hand, Mrs May went to Brussels with a proposal she knew the DUP could not accept, or she went with a proposal that the EU could not accept…
There is little doubt, however, that Mrs May did go to Brussels expecting a deal. She had booked time in Parliament today, asking the Speaker to clear “several hours” for a “major statement” on the outcome of her talks. This has now been cancelled.
And the negotiations didn’t just fail, they blew up spectacularly. From the Daily Mail:
10.27am: Jean-Claude Juncker meets with his chief negotiator Michel Barnier and EU Parliament representative Guy Verhofstadt. He says they are working for a ‘fair deal’.
11.10am: David Davis says today’s talks are the culmination of seven months work by both sides and that Britain hopes to get agreement on ‘sufficient progress’ on divorce issues at the meeting.
11.16am: Irish broadcaster RTE reports on a leak of the draft agreement suggesting the UK will agree there will be no ‘regulatory divergence’ between the Republic and Northern Ireland.
12.09pm: European Commission confirms the plan for the May-Juncker lunch is to get ‘as close as possible’ to a deal.
12.40pm: May arrives at the talks and poses for pictures with Juncker ahead of lunch.
12.44pm: EU Council President Donald Tusk tweets ‘Tell me why I like Mondays’ and says he was encouraged about the prospects for a deal following talks with Irish premier Leo Varadkar.
12.45pm: DUP MP Sammy Wilson accuses the Irish government of leaking claims about regulatory divergence and claims the UK government will not sign up to them.
1.30pm: Nicola Sturgeon seizes on the leaks to demand Scotland gets access to the same terms as Northern Ireland.
2pm: Arlene Foster appears in front of cameras at Stormont to denounce any deal that ‘separates Northern Ireland economically or politically’ from the UK.
2.30pm: Varadkar postpones a statement in Dublin on Ireland’s position in the talks.
3.12pm: Reports emerge Foster and May have spoken by telephone during a break in the May-Juncker lunch.
3.57pm: Juncker appears alongside May to confirm there would be no deal today but that he remains confident.
3.59pm: May insists she is ‘confident we will conclude this positively’ but announces talks will reconvene later in the week.
4.15pm: DUP MP Sammy Wilson appears on TV again to brand the deal a ‘unionist nightmare’.
5.10pm: Tusk tweets a picture of himself and May, warning time is ‘tight’ but agreement is ‘still possible’.
5.20pm: Varadkar finally makes his appearance in Dublin, confirming Britain was ready to sign up to an agreement. He said Ireland was ready to sign and was ‘surprised and disappointed’ Britain could no longer sign up.
The other wee problem with whatever it was exactly that May was proposing regarding “alignment” would have been anathema to the hard Brexiteers and the press barons. To them, one of the most important reasons for the UK to extract itself from the EU is to free itself from evil Eurocrats. Having NI or even worse, the UK have to continue to harmonize regulations with the EU is unacceptable to them.
In other words, the sketchy Ireland arrangement bears a worrisome resemblance to all of those Eurozone “kick the can” deals in the 2010-2012 period, when there seemed to be a new mini-crisis every few months or so, and Eurozone leaders would do the bare minimum at the 11th hours to keep things from falling apart. If Richard North’s surmise is wrong, that the EU negotiators actually would accept verbiage that was viable from the Irish end, that would be because the negotiators were so keen to get to the next phases of trade talks that they’d give a flawed deal a waiver in the hopes something could be cobbled together in the context of the trade talks.
But as we stressed yesterday, Barnier was slapped down before in trying to move to the trade negotiation phase because France and Germany (and others) deemed that the preliminary issues had not been resolved. So the state of play in Brussels could also reflect the negotiating team trying to get its principals, the EU member states, to be more accommodating to the UK, at least on negotiating process.
It is over my pay grade to envision how things can move forward from here. It is hard to come back from such a public blow-up. May, who was already a dead woman walking, has been further damaged by this miscalculation. Yet the last thing the Tories want is new elections, since Labour could win a majority. May is meeting today with DUP leader Arlene Foster, but by all accounts, the DUP was apoplectic over what was leaked about the deal, and it seems doubtful that they’ll be talked out of the tree, particularly since May had reportedly spent a half-hour on the phone with her from Brussels trying to address her objections before the UK-EU talks had to be suspended.
The wags in the Financial Times’ comment section may have the best take:
The Titanic of Brexit founders on the iceberg of Ireland!
@Achilles 47: Built in Belfast by Protestant craftsmen.