Theresa May has made such a hash of the Brexit negotiations that she has achieved the difficult task of making Jean-Claude Junkcer look statesmanlike. In a multi-party negotiation, she has managed to alienate, perhaps fatally, the DUP and the hard-core Brexit wing of her own party.
But May’s flailing about may simply reflect that it’s become impossible to pretend that the Government can deliver on Brexit fantasies of a glorious Brexit, or even one where the UK gets to reclaim its vaunted national sovereignity at a very high economic cost. As we’ve said repeatedly, the UK is a small open economy. That means it has to trade. The UK runs a large trade deficit and is at risk of a serious fall in the pound, which translates into a worse standard of living for its citizens via higher import costs, unless it can improve its level of exports. That means that large swathes of the UK economy will still have to adhere to EU regulations. The idea that the UK was going to escape Brussels rule-making was always a fantasy.
Even so, May’s performance has been disastrous. Brexit negotiations collapsed yesterday when the Tories’ coalition partner, the DUP, was outraged to learn that draft language intended to finesse the need for a hard border between the Republic of Ireland and Northern Ireland had been approved by the Republic but never reviewed with the DUP. Even worse, the key phrase was that the UK would preserve “regulatory alignment” between Northern Ireland and the Republic in several economic sectors, such as agriculture and transport. This would be unacceptable to the DUP, since the party insists on a strong “unionist” position with the UK, that Northern Ireland’s legal and regulatory regime is to remain the same as the rest of the UK.
The DUP was duly ripshit about the Republic and the EU being treated as insiders while the DUP was excluded from consultation about the language to be presented to the EU for review by the European Council next week. At least as bad was that the leaked terms sounded as if they were utterly at odds with the DUP’s firm position on staying joined at the hip with the rest of the UK.
A DUP MP stated yesterday that the party would reject the draft language. Theresa May called party leader Arlene Foster who according to some press reports, effectively said she’d bring the government down if May persisted with the leaked language.
May, with her tail between her legs, was forced to cancel the talks in Brussels. She ran back to London to try to reassure the DUP, and planned to return to the Continent Wednesday to resume the talks.
That has gone off the rails. Foster has not only refused to speak to May, she’s refused even to give a time when she will allow May to ‘splain herself. The Brexit negotiations are shut down and will not resume until the DUP is back on board. Foster looks to be deliberately running out the clock so as to assure that no proposal on Ireland (or for that matter, any of the three issues where adequate progress needs to be shown before the talks can move to the next stage) can be presented to the European Council next week. That dashes the UK’s desperate hope of being allowed to start to discuss trade.
One might regard the DUP as being hopelessly petty and vindictive. That may very well be true. But they may know exactly what they are doing.
Despite the DUP being fully within its rights to be apoplectic for having been treated so shabbily from a procedural standpoint, May no doubt hope they could be assuaged when they understood the substance of her scheme. David Davis today in Parliament confirmed that the plan was not to move NI into a special regulatory zone, but to have all of the UK follow the same “alignment”. As far as I can tell, only the Daily Mail reported that correctly yesterday.
Mr Davis surprised MPs by insisting any regulatory alignment with the EU would apply across the UK, rather than see Northern Ireland treated differently…
Asked about keeping regulations in step with Brussels, Mr Davis said: “The presumption of the discussion was that everything we talked about applied to the whole United Kingdom.”
Now shouldn’t that appease the DUP? Why is the DUP insisting, as the Independent surmises, that the DUP won’t even deign to talk to May until she makes “major changes” to the border proposal?
As we have been saying, there is no way not to have a hard border somewhere with a Brexit. All of this talk about “alignment” is a big con that at least the EU’s lead negotiator and Jean-Claude Juncker appear willing to entertain for now to keep the talks moving. The only choices are whether to have a hard border between the Republic and NI or “at sea,” meaning at ports, which would require integration of Ireland at least as far as regulations related to good-production are concerned. In the case of Brexit, NI will lose advantaged access to at least one of its markets, the Republic or the UK. With that, it is also likely to see lower economic subsidies from that current trade partner as well.
Richard North confirms this reading by going longer-from through David Davis’ tap-dancing:
No doubt European Commission officials who watched the “urgent questions ” on Monday’s abortive Brexit negotiations will have come away confused and perplexed. For, if Mr Davis’s definition of “regulatory alignment” is one on which Her Majesty’s Government now intends to rely, there is no basis of an EU-UK agreement on cross-border trade, much less any rapprochement on the Irish question.
For the purposes of settling a form of words that could form the basis of a commitment to the Irish Government on the border arrangements with Northern Ireland, the phrase “regulatory alignment” has considerable merit, particularly in terms of providing for the “creative ambiguity” that Mrs May sought in creating a text that meant all things to all people…
A particular merit of this approach is that, in its most severe construction, “regulatory alignment” can mean rigorous harmonisation not only of rules and regulations, but also of the entire regulatory regime. That will necessarily include surveillance and enforcement and all the other trappings which would go with a system which seeks to emulate the structure and extent of the Single Market.
On the other hand, used in looser environments, the same term can mean merely an approximation of laws and systems, sufficiently close to allow for different regulatory authorities to rely on mutual recognition. It would not require systems to be irrevocably harmonised…
Then, having already told Antoinette Sandbach and others that regulatory alignment applies to the whole United Kingdom, Davis was confronted by Stephen Timms, who challenged him to confirm this.
Said Davis, “I have explained to the House that regulatory alignment is not harmonisation. It is a question of ensuring similar outcomes in areas where we want to have trade relationships and free and frictionless trade. Anything we agree for Northern Ireland in that respect, if we get our free trade area, will apply to the whole country”.
So, the cat is out of the bag and there is no going back. Essentially, the UK is aiming for what it has always aimed, more or less from the start of the May administration. It wants “a comprehensive free trade agreement, a customs agreement and all the associated regulatory alignment”, the latter meaning either mutual recognition or what amounts to regulatory equivalence.
North and this blog have stressed that this sort of loosey-goosey arrangement will never never be approved by the EU member states. He speculates that the EU is indulging the UK’s refusal to abandon its fantasy that it can get some sort of special deal with the EU and not become a normal “third country” with all the hassle and disadvantages that go with that because “the EU collectively has decided that it is too early for them [the talks] to fail.”
Why might the DUP’s hardball tactics to prevent what it would see as an unacceptable defeat be accidentally inspired?
Ireland is the biggest loser in a Brexit, and NI loses even more than the Republic. In either a hard Brexit or a disorderly Brexit, there will be a hard border between the Republic and NI. That is the default scenario and the odds greatly favor that being the end result.
So Ireland’s best hope is to blow up Brexit. And the DUP is doing that (so far) by being completely loyal to its election stance of backing Brexit and sticking to “unionist” principles. But the Government and the Republic (and the EU backing the Republic) all want to avoid a hard land border, which is the inevitable outcome of the other boundary conditions the UK has set.
Sending the Brexit talks off the rails sooner rather than later is the best hope of increasing the now extremely remote odds of reversing Brexit. Mind you, it also increased the odds of the crazypants wing of the Tories assuming leadership of the Government.
The odds of the long-threatened leadership shakeup look higher than ever. May not only failed to consult closely enough with the DUP, she also froze out Boris Johnson. Yet even though the ultras are outraged at the idea of “alignment”, they are also loath to blow May up. Rising antipathy for Brexit is translating into more votes for Labour. Despite their fetishization of doctrinal purity, the hard-core Brexiters appear willing to sacrifice that rather than risk Jeremy Corbyn as PM. From Politico:
Theresa May faces a fierce backlash from Brexit-supporting Conservative MPs over what they see as concessions made to avoid a hard border on the island of Ireland….
One former Brexit minister, David Jones, said there would be “huge concern” among backbenchers if the government does accept, in its phase one agreement with the EU, that there must be U.K.-wide regulatory alignment with the EU in order to avoid checks on the border between Northern Ireland and the Republic of Ireland…
“There will be huge concern among backbenchers,” he said. “Obviously we want to be in a position to conclude [Free Trade Agreements] and if agriculture is one of those areas of so-called alignment, it makes it difficult to see how we could conclude those FTAs.”
Jones is correct. In particular, the US dictates terms in its trade deals, and is particularly insistent that trade partners accept our low regulatory standards for agriculture so as to facilitate US exports. But as the story concludes:
It’s not clear, however, what the Brexiteers’ options are. The MP, who spoke on condition of anonymity, said that a delegation of colleagues had made their views known to No. 10 and the prime minister.
But the nuclear option — a leadership challenge to May — remains unlikely as Tory MPs still calculate that a move against May risks an election, which the opposition Labour party are currently in a strong position to win.
The climbdown we are seeing on all three of the preliminary negotiating issues surely ends the illusions of all but the most deluded fanatics about Britain’s real position in the Brexit process. It is not in a position to make demands – certainly not demands that the EU destroy its whole raison d’etre by allowing a member state to leave the single market but still enjoy all its advantages..
Having done so, they might now ask themselves: if, for the first time in 800 years, Ireland is proving to be in a much stronger political position than Britain, what does that say about what Brexit is doing to Britain’s strength? It is being forced to accept what it claimed to be unacceptable, not because Ireland has suddenly become a global superpower but because it has the unflinching support of EU member states, the European parliament, and the EU negotiating team. There might be a lesson in there somewhere for a country facing a future without the allies it has long taken for granted.
If the DUP’s Foster continues to ignore May, she will be doing everyone a favor, whether by accident or design, by bringing an inevitable crisis forward in time.