Brexit Briefing No. 72: What's the alternative? (Week Beginning 11th February 2019).

This article has been kindly given to the SSCA by Daniel Dalton MEP, Conservative MEP for the West Midlands (daniel.dalton@europarl.europa.eu).

There was frantic diplomatic activity this week as UK and EU negotiators met in Brussels. Stephen Barclay, the Brexit Secretary, was there to sound out Michel Barnier, the EU’s chief negotiator, on possible ways out of the current impasse. Mr Barclay also visited Strasbourg to talk to the key MEPs in the European Parliament’s Brexit Steering Group.

The purpose of these meetings was to flesh out “alternative arrangements” that could avoid the Irish backstop from ever having to be used. The UK continues to focus on either a unilateral exit clause or a time limit, in a bid to get the withdrawal agreement through parliament.

The public response from all the European leaders was that the backstop couldn’t be reopened, but some additional wording, whether through a protocol or a codicil, a political statement, or changes to the political declaration could be added, although it would not amount to a time limit or a unilateral exit clause for the UK.

Whether this will be enough to persuade MPs remains to be seen, especially as the government lost a vote on a non binding motion designed to reinforce the government’s negotiating position. That suggests that a parliamentary majority for any course of action will be difficult to find.

However the British Prime Minister has a powerful tool on her side in the hard deadline fixed by the Article 50 process. As such it appears that the PM will wait until the very last moment at the end of March to put the changed deal to Parliament, with the inference that if the deal is rejected at that stage there would not be enough time to avoid no deal, effectively making the choice for MPs one between the deal or a no deal Brexit.

MPs are acutely aware of this and many are likely to move before that stage. The Prime Minister will make a statement to the House on the 26th February and there will be votes on a subsequent motion on the following day. It is likely that they will include votes on whether to extend the article 50 deadline and delay leaving the EU. If they pass, which is likely as even many Conservative MPs are worried about the effect of no deal and are keen to take it off the table, this would change the nature of the meaningful vote in March. It would no longer be a choice between the deal or no deal but one between the deal or a delay to Brexit. That may change the potential majorities in Parliament.

Olly Robbins, the Prime Minister’s Europe adviser was, according to press reports, overheard in a bar in Brussels this week suggesting that the real choice would be between the deal and a delay to Brexit.

The Goverment’s strategy has always been one of looking both ways. Telling Brexiteers that it is a choice between the deal or no Brexit and telling Remainers that it is this deal or no deal. This strategy can’t continue for much longer and is likely to break one way or another in the next few weeks.

However the real problem here is with the withdrawal agreement itself and more importantly how we got to it.

The EU negotiating position was always clear: this was a negotiation in two parts. The withdrawal deal first, addressing the budget, citizens rights and Northern Ireland. Only when that is concluded and the UK has left the EU can discussions on the future relationship begin. This is why the transition period is proposed, to allow a semi EU status for the UK (formally out of the EU but in practice following all its rules) while the future trade relationship is negotiated.

However the flaw with this approach is that there is no way to be sure that the border on the island of Ireland can remain open until the future trade relationship has been finalised. The trade position will define what checks are needed.

So this logic has led both sides to the backstop. A solution to a problem which only exists because the EU won’t discuss trade until the UK has left the EU. The EU is a rules based organisation and points out that legally it can’t conduct trade negotiations with one of its own members as that would undermine the whole EU principle of it being a single trading entity. Once it starts negotiating with one of its members, others may start demanding special deals which would break up the single market and customs union.

However, given that the UK has triggered Article 50 and is leaving the EU, some flexibility from the EU could have avoided the current impasse as the current withdrawal deal including the backstop is a difficult sell for the Prime Minister to her backbench MPs.

The two big negotiating successes the government did achieve are ending free movement (which was not the major Brexit demand of many Conservative MPs) and ensuring that the backstop applies to the whole UK and not just Northern Ireland. This was designed to protect the Union but has led to the impasse as the whole UK now faces being stuck in the customs union, and therefore unable to do trade deals (trade deals are possibly the biggest Brexit demand of many Conservative MPs).

A treaty needs to work for both sides and this one gives the government precious little ammunition to gain support for it at home. However the design of the withdrawal agreement, shaped by the EU, provides little opportunity for that. That is its great failing. However given the EU’s negotiating position and the fact that the two year article 50 deadline hugely favours the EU, this was always the only deal that could be done, oblivious as it is to the political needs of the British government.

The backstop also appears to be a bridge to the future trade relationship. This worries many British MPs as it appears to be a move towards a customs union or at the very least some sort of close customs arrangement.

This is not helped by senior EU officials who hint that the only option that the EU will accept is for the whole of the UK to stay inside the customs union permanently. This is also the position of the Labour Party in the UK, although they clarify this by also saying that the UK should have a say and a role in the negotiation of future EU trade deals as a part of its customs union membership.

That is a mirage, there is no hope of the UK being able to influence EU trade policy from outside the block, even if it is in the customs union.

There is also a grave misunderstanding of the customs union in the UK. This is the mistaken belief that customs union membership means that the UK just adopts and benefits from EU trade deals as if it was an EU member. As a result there is growing support for the idea that the customs union is somehow in the UK’s national interest as a way to get through the current impasse. This is based on fundamentally wrong understanding of the customs union as I explain here.

If the customs union was in the national interest there wouldn’t be so much opposition to the backstop in Westminster, as the opposition is mainly based on the fact that the UK will be trapped in the EU customs union with no way to leave it.

However the easiest way to minimise checks between Northern Ireland and the Republic is for them both to be in the same customs zone. The trade logic from the EU is clear, even if it is tone deaf to the political ramifications.

To bridge this gap technological measures, as proposed in the Malthouse Compromise (an internal compromise within parts of Conservative MPs) could go a long way to minimising border checks but would probably not eliminate them. Yet the EU, so far, will not even discuss this as a possibility.

So the great problem of the Brexit negotiations remains the same one that it has been all along - how to ensure no hard border on the island of Ireland whilst ensuring no barriers between Northern Ireland and the rest of the UK, or between Ireland and the rest of the EU and for the UK to avoid being trapped in the customs union?

Nothing that happens in the next few weeks in the British Parliament will solve that problem. The EU has also never seriously tried to square that circle, showing little regard for potential barriers within the UK or for UK concerns about the customs union. The UK has also shown little regard to EU concerns about the integrity of the internal market.

The only way to solve it is by agreeing a future trade relationship covering all those concerns before the UK leaves. Otherwise one or more of those red lines will have to be breached.

So that means there are three ways out of this crisis.

Firstly a parliamentary majority can be found before the end of the month, probably after the government has got an agreement with the EU to amend the withdrawal deal, combined with the threat of a no deal Brexit. This may persuade errant MPs to back the deal out of fear for the alternative. Secondly the UK leaves without a deal altogether although the reality is this is still highly unlikely given the fact that the British Parliament is opposed to it and no one on the European side wants it. The third option is the one that Olly Robbins was probably hinting at. A long delay to Brexit, possibly up to a year and a half allowing for the future trade relationship to be negotiated in this time. At the end of the period the UK would leave with a trade deal, negating the need for the backstop.

This third option would be political dynamite in the UK and it is hard to see what the reaction to it would be. However in practical terms it wouldn’t make much difference as the UK is due to stay in the EU in all but name and to be bound by all EU rules until the end of 2020 anyway, in accordance with the transition period part of the withdrawal agreement.

Negotiating a free trade deal from within the EU may give the UK more leverage over those negotiations than trying to do it from outside, particularly as product standards and rules would remain the same.

However it would raise concerns that Brexit may not be delivered at all and would raise practical problems like how to deal with the European elections. It would also undermine the EU’s stance (which has led us to this point) that it can’t negotiate a free trade deal with an existing EU member state. It would also lengthen the uncertainty around Brexit. There is also the practical issue that the key problems cannot just be wished away. Trade negotiations will still focus on how to keep the Irish border open and the two sides differ greatly on how to do that. There is no guarantee that even an extra year would be enough time to overcome those differences. At the end of it, the treaty would still need to be ratified by a divided British Parliament.

So with just weeks to go until Brexit the clock runs down, we end another week with all possible outcomes still in play.

Daniel Dalton MEP