Tuesday 5 December 2017

Did hard Brexit die yesterday?

The rapid, confused and confusing swirl of events over the last couple of days are hard to make sense of and contain many legal, diplomatic and political complexities. But if we stand back from that swirl, the underlying significance of what is happening is that for really the first time since the Referendum the government – and Brexiters in general – are being forced to confront the realities which they have previously either not understood or pretended did not exist. The result is the chaos that we are seeing, and the possibility that Brexit, or at least hard Brexit, is unravelling.

At the core of this are the issues discussed in my previous post. If Britain is outside the single market and the customs union then there must inevitably – by definition, not by EU malice – be border checks between Britain and the EU. That is true for all UK-EU borders, whether on land or not, but takes on a particular significance at the Irish land border for well-known political and historical reasons and more specifically because of the legal terms of the Good Friday Agreement (GFA).

That significance is magnified, although it would in any case exist, by the peculiar situation of the government being dependent on the DUP for its parliamentary majority. This not only raises the political stakes, but also means that into the mix comes the question of a possible ‘sea border’ between Great Britain and Northern Ireland. Out of this are generated a series of mutually incompatible desires. Neither Ireland nor the EU-27 will accept a land border on the island of Ireland. Nor do the DUP and the British government want one. But both the DUP and the British government want hard Brexit.

So that leads to the idea of ‘regulatory alignment’ between the EU and Northern Ireland. But what that means is a sea border which the DUP won’t accept and even if they did, or were forced to, it immediately leads to demands from Scotland, Wales and even London for the same treatment as Northern Ireland. Which then leads to the idea of regulatory alignment between the whole of the UK and the EU. But Brexit Ultras won’t accept that because it implies, or might imply, in some way staying partially or wholly within the single market and the customs union.

Which leads to a dance around similar-sounding but actually heavily freighted terms: regulatory alignment, no regulatory divergence, and regulatory equivalence. What’s the difference? Equivalence implies two parallel regulatory systems, one EU and one UK, that recognize each other - which is more acceptable to Brexit Ultras*. No regulatory divergence implies harmonization of systems, pretty much like the status quo, and thus acceptable to the EU and Ireland, but repulsive to the Brexit Ultras. And alignment is the attempted diplomatic fudge that allows one side to think it means ‘equivalence’ and the other to think it means ‘no divergence’.

And if all that were not perplexing enough, it is not clear that ‘regulatory alignment’ solves the border problem anyway – since customs issues are about far more than regulatory alignment (or regulatory whatever else we call it) also as pointed out in my previous post. Regulation is really only about the single market aspects of the border, not the customs union aspects – although, again, fudging the language might fudge that distinction. And, beyond that, the idea behind regulatory alignment appears to be alignment of those aspects of regulation applying to matters specifically relevant to the GFA (agriculture, energy etc). That is only a subset (although covering perhaps 140 areas) of the full scope of regulation and so, if it is now to apply to the UK and not just Northern Ireland, it becomes a form of sectoral cherry picking which the EU has thus far rejected, although it might conceivably countenance it by virtue of the desire not to see the GFA undermined**.

There are a myriad of different issues, and different permutations of issues, nested inside all of what I have written here but in a way they are all just froth. Not entirely insignificant froth, in that the way they play out over the next couple of weeks or even the next couple of days may determine whether the Brexit talks move from stage 1 to stage 2. But, still, froth because either now or when stage 2 gets underway a fundamental choice is going to have to be confronted. If Brexit is going to happen, it is either going to have to be a soft Brexit in the meaning of staying in the single market and at least a version of the customs union – in which case the border problems disappear – or there is going to be a no deal Brexit which will entail a (non-consensual) hard border. The intermediate position of an FTA (Canada or Canada Plus) is not viable because that will entail a consensual hard border – and it is clear that neither Ireland nor the EU-27 will consent to it. There’s a tiny bit of scope for wriggle room here in that it’s just about conceivable that we could have a kind of shadow single market and customs union (at great expense and to no good purpose) that might be called ‘a deep and special partnership’ but would to all intents and purposes be soft Brexit.

So either in the next couple of weeks (if there’s no diplomatic fudge) or in the next few months (if there is), everyone is going to have to decide which way to jump. The Ultra Brexiters are already making noises that they will want the no deal route – many of them have always preferred this anyway – although some may back away from that when push comes to shove. Tory Remainers and soft Brexiters are going to have to decide whether they will prioritise party unity over their views on Brexit and back no deal, or whether they will split their party by refusing to do so. And Labour are going to have to get off the fence, most likely, although not yet certainly, by advocating soft Brexit.

To put all this another way, if the Referendum result makes Brexit inevitable then within the spectrum of ‘soft’ to ‘hard’ to ‘no deal’ Brexit the hard Brexit possibility disappeared this week when it finally became clear that there is no consensual solution to the Irish border issue other than soft Brexit. Which leaves the only other possible outcome a non-consensual (i.e. no deal) one. Such an outcome would be so damaging to the UK (not just the UK, but especially the UK) and so far from what leave voters were promised as to be highly unlikely. After all, there seems little doubt that within both the country and parliament soft Brexit would be preferred to no deal Brexit.

Hard Brexit may not quite have died this week, but it was mortally wounded. Some diplomatic manoeuvrings may enable it to stagger on for a bit longer but the real choices that Brexit poses for Britain will have to be faced. Doing so will certainly entail a massive political crisis and very likely another General Election earlier or later in 2018. How that all plays out is unpredictable. What is predictable is that all the things that were never properly discussed during the Referendum will now, finally and belatedly, have to be not just discussed but decided.

I suppose it need hardly be said that every day that this lamentable and wholly avoidable fiasco goes on the British economy and British standing and influence in the world are further damaged.

*Although, down the track, even ‘equivalence’ poses problems for the Ultras’ ambition to make FTAs outside of the EU. But that is a topic for another day.

** And even if the EU accepted sectoral deals, it would pose many other problems not least the long term implications for UK industrial structure, as I argued in an article on the UK in a Changing Europe website in 2016.

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