What they Tories have wanted to regard as the light at the end of the tunnel is instead a train bearing down on them.
One of the reasons for a Brexit post today is that Theresa May is due to give a speech to Parliament today on the Brexit in light of the upcoming March round of negotiations. The EU, in what looks like an effort to force the Government out of its Groundhog stasis, released its draft of a treaty Wednesday. Some observers thought the publication might have been moved up, since some annexes that one would have expected to have been fleshed out a bit were blank.
Even though the EU’s chief negotiator, Michel Barnier, denied trying to administer shock therapy to the UK, any bit of reality intruding into the Government’s and press barons’ fiercely maintained bubble would amount to that. And as much as the UK officialdom is in an uproar about some of the proposed terms, most of all over Ireland, the consternation is pathetic, a combination of ignorance and bad faith.
From the very outset of Brexit, the only serious documents that have been presented have come from the EU. The best the Government has offered is loftily phrased handwaves. The fact that a major rounds of negotiations is fast approaching is no secret. The UK was tasked in the December Joint Agreement to codify its proposal for Ireland. It has yet to do so. The EU has asked the UK to state what wants in the way of a post-Brexit relationship. The very few ideas it has offered are too sketchy and non-starters. Yet having been told that, the UK keeps acting as if making the same bone-headed requests again will produce different answers.
I hope when May speaks Friday, UK and any European readers will give their reactions. If nothing else, Barnier’s Wednesday release, which contained nothing of importance that was not expected or previously agreed, nevertheless makes it hard to May to try to get away with yet more empty reassurances.
The hot button for the MPs is that 120 page treaty draft, which is subject to some tweaking before it is approved by the EU27, is that it set forth what the text clearly depicts as a fallback position on Ireland, as in what is proposed to take effect if no other deal is struck. The December Joint Agreement had sketched out three options, and this was one of them: what amounts to an Irish sea border, which would make Northern Ireland subject to EU regulations. Of course, that makes Northern Ireland less than a full-fledged member of the Union, a position that is unacceptable to the DUP and at the same time a very useful precedent for Scotland.
With the benefit of hindsight, it was inevitable that despite the EU correctly trying to make the UK responsible for solving its Ireland problem, it was going to wind up on Barnier’s desk. There is no answer that does not involve a hard border somewhere, and the UK simply isn’t prepared, politically or practically, to deal with the implications. The UK is stuck on yet another Brexit fantasy, of a soft techno-magical Ireland/Northern Ireland border. There is no way the EU27 will accept that because it would serve as a way for goods that don’t conform with EU regulations to flood in. Chlorinated chicken, anyone?
So the EU was destined to be the heavy.
Even though the hissy-fitting over Ireland dominated the UK news, it was far from the only Brexit development yesterday.
Theresa May made a big retreat on the rights of migrants who enter during the transition. From the Guardian:
Theresa May has conceded that EU migrants who come to Britain during the Brexit transition will have the right to settle permanently in the UK…
The concession, slipped out in a Brexit policy paper by the Home Office, also makes clear that EU migrants who arrive after March 2019 will be given a five-year temporary residence permit, not the two-year one that was previously proposed by ministers.
The policy paper does, however, make clear that EU migrants who come to live and work in Britain during the transition period will not have the same rights once it ends to bring family to join them as EU nationals already resident in Britain who have secured “settled status”. Instead, they will have to pass a minimum income threshold test, which is currently set at £18,600 for British but not EU citizens.
The EU reaffirmed its position that the transition period would go only to the end of 2020.
The treaty will be under the jurisdiction of a joint UK-EU committee and unresolved disputes will be referred to the Court of Justice of the European Union. When the Brexiteers get to this section (they apparently haven’t yet), heads will explode.
The EU reserves the right to play hardball during the transition period if it thinks the UK has been cheating. The EU has not retreated much from its original position on enforcement of EU rules. From Politico:
In short, the U.K. better follow the rules and do what it’s told during transition. This and subsequent clauses make clear the EU will have the upper hand in any disputes during the transition period over alleged non-compliance by the U.K. with EU laws, rules and regulations. And if the U.K. refuses to implement a remedy of an alleged violation as ordered by the EU authorities, the EU will have a fast-track mechanism for imposing punishment — a “proportionate” suspension of certain benefits the U.K. receives from participating in the EU’s single market. This point first emerged in a footnote to a previous version of the legal text but it has been spelled out more explicitly and watered down slightly — although not much.
The EU has snuck in a fix of a major treaty drafting error…which would be a big free concession by the UK if no one is alert enough to notice. Our Clive picked this up. Admittedly, I have not read the press exhaustively, but I don’t yet see any commentary on this point. From Clive:
One thing I was on the look-out for was how the EU Draft Treaty would fudge, erm, sorry, make go away as best it can, the TFEU-created problem of — unwisely as it turned out — hard-coding into its provisions the specific references to the U.K. and it’s dependent territories. Reading the TFEU now, you can’t help but chuckle that it’s naivety was such that it assumed that member states would always and forever be EU member states.
Fast forward a few years and the EU is now stuck with specific Treaty commitments to the U.K. (and territories) by name. How, then, to get out of that free?
The Draft seems to bind the U.K. into letting the EU off the TFEU hook for both itself and territories with regards to what it was granted under that Treaty. A similar situation applies to Euroatom (again, there is the hard-coded references to the U.K. in that). The U.K. might just be tempted to tell the EU “fat chance”. I guess it depends on what, if anything, the U.K. can extract in return for allowing the EU to extract itself from the now optimistic (you could say sloppy) wording of the TFEU.
The UK auto industry said no divergence, please stick with EU regulations. From the Independent:
Hundreds of thousands of British car industry jobs could be put at risk after Brexit unless the UK reaches a deal with the EU on the sector, MPs have warned.
Britain should continue to follow EU car industry rules after leaving the bloc, the Business Select Committee said.
It said it could find no benefit to the country’s automotive sector from regulatory divergence from the EU, only costs.
The verdict will come as more bad news for Theresa May whose latest approach to Brexit – “ambitious managed divergence” – was mocked by Jeremy Corbyn during Prime Minister’s Questions on Wednesday.
As all of this horse-trading is finally looking as if it might finally start in earnest, the timing is looking impossibly tight. As the Financial Times pointed out:
Mr Barnier has warned Downing Street that backsliding on terms agreed in December would have consequences for discussions on future relations and a transition deal, which Mrs May wants agreed at a summit in less than four weeks.
How can this possibly all get done unless David Davis and his team lock themselves in a windowless room in Brussels for the next month? May and her allies seem to think that the equivalent of a cocktail napkin doodle will be sufficient detail for a transition agreement.
On top of that, the reason the Tories have kept repeating the same nonsense for months on end is that they know they can’t resolve the outtrades on their own side without risking blowing up their fragile coalition. But they’ve also made their fraught situation worse through their abject ignorance.
One major misunderstanding is the assumption, widely repeated in the press, that if the UK were to be in a customs union with the EU, it would not be free to cut its own trade deals with third countries. That is not at all a given, yet it is almost universally treated as such.
The big reasons countries join customs unions is to get closer to the other members from an economic perspective, and to benefit from participating with a big group of countries in negotiating with other countries. In other words, the reason members of customs unions pretty much always participate in pacts with third countries is they see that as far more advantageous than going on their own. For instance, Turkey, which has a customs union with the EU, was upset at the prospect that it might not be included in a EU-US trade deal. Iceland, Liechtenstein, Norway, and Switzerland are members of the regional free trade association, the EFTA, and also part of the EU customs unions by being part of the EEA. The EFTA has done a whole clutch of trade deals of its own. And tiny Iceland has a trad pact with China all by itself.
But independent of the customs union confusion, the pressure on other fault lines looks about to reach the breaking point. From Politico:
Yet, for all the hullabaloo, the nub of Theresa May’s dilemma remains simple enough: She only has numbers in parliament for a Brexit which, as things stand, is not available.
If something doesn’t give, a political crisis is fast approaching….
The question, then, is not whether she can find consensus in parliament for a soft Brexit but whether she can square off pro-EU rebels in her party without alienating the 60 or so hardliners — plus the 10 DUP MPs who keep her in power — to pass a final deal in October.
What does she need to do that? Two things are essential.
One, the terms of the divorce must give a watertight guarantee of a future trade deal and tie it to Britain’s so-called exit bill. This is a red line for around 30 hardliners in Jacob Rees-Mogg’s pro-Brexit caucus, according to a leading member of the group.
Second, and most crucially, she needs the EU to agree to something approaching a soft border in Ireland which does not prevent the U.K. striking its own trade deals and does not leave Northern Ireland hived off from the rest of the country.
As we’ve discussed since the Irish question has been in play, the “soft border” idea is daft, and it’s not clear why Barnier has indulged the UK’s fantasy. One theory was that playing along would in the end make clear that the Government had promised the impossible. But the UK press and pols have already persuaded most of the public that the EU is being unreasonable and is taking advantage of the UK. As we described above, Barnier is now the heavy by virtue of formalizing one of three Ireland options that the Government approved in December. And rest assured, the particular EU countries that insist on adequate border controls to prevent an influx of chlorinated chicken will again be depicted as being obstructionist.
And as for the first “essential” term, that of a “watertight” assurance of an eventual trade agreement? It’s hard to fathom how that is possible. Trade negotiations can and do fail. Look at the Doha round, and more recently, the TPP. Requiring that a deal has to be concluded will encourage one or both parties to play non-negotiable to force the other side to capitulate. Given the UK’s demonstration of arrogance, ignorance, and rigidity, I can’t imagine the EU agreeing to anything approaching what the likes of Rees-Mogg wants on this front.
The Tories incentives are to keep the ball in play as long as possible, but the game is running out. And the more they keep dithering, the more the odds of not just a hard Brexit, but a crash-out, rise. Perhaps May will find a way to navigate through this, but one would think if there were such a path, she’d have found it by now.