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The battle over what Friday’s EU-UK Brexit agreement actually means has over the weekend proved as fierce as the negotiations that led to the deal. But only in the UK, where there seems to be confusion, wilful or not, about what the country has committed itself to.
Some things should be crystal clear from the official joint report of the phase 1 agreement, the reaching of which was the EU’s condition for moving on to trade and transition talks (while continuing to fill in the details of a legally binding withdrawal treaty).
The phase 1 agreement “is without prejudice to discussions on the framework of the future relationship”, the parties assert up front. But it very much prejudices the future relationship in itself, insofar as it circumscribes what forms that relationship could take in the area of trade. That is because of the commitments the UK has finally made over the difficult issue of the border between Northern Ireland and the Irish Republic. (Other aspects of the agreement, on citizens’ rights and settling the UK’s financial obligations, ended up right in the landing zone most observers had identified long ago — very close, in other words, to what the EU had demanded at the outset. My FT colleagues provide all the analysis you need.)
There are four things to note.
First, the relevant parts of the agreement are, as David Allen Green has put it, not so much agreements between several parties as promises the UK alone is making to the world. That is a natural consequence of the UK being the disrupter of the status quo ante, but one that its domestic debate too rarely recognises.
Second, the strength of the commitments over Northern Ireland is remarkable. Article 42 states that the Good Friday agreement “must be protected in all its parts” (my italics), Article 43 “recalls [the UK’s] commitment to the avoidance of a hard border, including any physical infrastructure or related checks and controls” and, most strikingly, Article 46 underlines that while the “commitments and principles outlined in this joint report will not predetermine the outcome of wider discussions on the future relationship” between the EU and the UK, they “must be upheld in all circumstances, irrespective of the nature of any future agreement”.
In other words, these promises are not conditional on the UK’s future trade deal with the EU or indeed on its obtaining such a deal at all.
Third, what is the substance of the solution? As Katy Hayward writes in an article retweeted by Sabine Weyand, the EU's deputy chief Brexit negotiator, there are three scenarios envisaged for the future trade relationship, and only two satisfy these highly fortified commitments on the Irish border. The three scenarios are set out in Article 49. Here the UK first asserts its “intention” to satisfy the border objectives through the future UK-EU relationship, but that is impossible if it leaves the EU’s regulatory and customs unions outright, as I explained last week.
“Should this not be possible” — which is the case under the UK’s current policy — the UK “will propose specific solutions”, which everyone would be very interested to know. But don’t hold your breath. Rely instead on the third option, under which the UK “will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement”.
This does not mean staying in the single market, as some seem to think, because not every page of the single market rule book matters for border checks. But almost every page relating to trade in goods does, as do more or less all the rules of the customs union. That means the UK, if it wants an orderly withdrawal agreement with the EU, has now explicitly committed itself to keeping its own regulation and customs barriers aligned in all those areas where divergence means goods crossing borders must be subject to controls (as well as some services and other economic activities relevant the Good Friday Agreement).
That means, essentially, that either Northern Ireland, or the entire UK, must stay in the customs union and follow the single market rules for physical goods. Brexiters in the UK cabinet have tried to say “full alignment” is compatible with “taking back control over our laws” — it is only the goals of the EU that Britain would have to fully align itself with, you see. Of course, when it comes to EU directives, all member states already have the freedom to decide how exactly to meet the regulatory goals. But it is unlikely to fly for regulations let alone customs rules. On the former, the UK should expect something like the European Economic Area countries’ obligation to “freely” write into law the relevant EU regulations. On customs, nothing short of replicating the common external tariff will do.
The UK also promises that Northern Ireland will not have a different status from the rest of the country against its will — hinting at the sort of high regulatory and customs autonomy I have advocated. The further promise that there will never be barriers to trade from Northern Ireland into Great Britain rather suggests it is not ruled out that there could be barriers the other way.
Fourth and finally, this would not actually be such a bad deal for Brexit Britain. Unless Northern Ireland has a special status, “full alignment” as a way to avoid border checks on the island of Ireland will also suffice to avoid border checks between Britain and continental Europe. That would rule out independent free-trade agreements, but would safeguard the UK’s participation in manufacturing supply chains such as car production. Not a bad prize. It would not do anything for services, of course, but on the other hand the British obsession with ending the free movement of people would be satisfied.
As I have explained in the past, the reasons why the single market’s four freedoms are inseparable are economic as well as political. While the free movement of goods can be separated from the others, services and people are entangled for good economic reasons. Once the UK wanted to end free movement for people, it was looking at saying goodbye to its free services trade with the rest of the world. But it could, in theory, keep full free trade in goods if it could only abide by common regulations. That, it seems, is what it has just opted for in practice.
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