Friday 4 September 2020

Back to school

There’s a distinct ‘back to school’ feeling in the air – and never has the beginning of the school year been the news story that it is in these Covid times – with that slightly chilly tang in the mornings that presages the end of summer. Nowhere is that more so than for Brexit, with next week’s talks marking the beginning of the final phase of the Transition Period, and the likelihood of considerable political drama. Many people who have, very likely, switched off from Brexit in recent months will see it return with a vengeance. Even leaving aside the UK-EU negotiations there will be a substantial programme of domestic legislation necessary in advance of the transition ending.

Yet for all that feeling of newness, we will be returning to a very familiar landscape. For the more time goes on the clearer it is that Brexit consists of a series of recurring themes. So before we get back to the grind of the detail of state aid, fisheries (£), conformity assessments, equivalence regimes, geographical indicators (£), border queues and all the rest of it (links are to some of the latest reports/ discussions of each issue), this last post of the summer will consider some of these themes and what they mean for the coming period.

Brexit: more about Britain than exit

Little of substance has happened in the negotiations over the summer, which is not a surprise. Boris Johnson talked of putting a ‘tiger in the tank’, but as usual it was just boosterish phrase-making with no substance. As noted in my previous post, the process is in limbo awaiting political decisions that Johnson hasn’t made, or hasn’t communicated. But looking back over the entire Brexit process so far it is striking how many of these long periods of relative inactivity there have been. Despite the loudly-ticking clock of, first, the Article 50 period and, now, the transition period there’s somehow been a remarkable lack of focus on the actual task of exiting the EU. Indeed it Is only very recently that basic practical preparations for, for example, border management have begun to be made.

Some of those quiet periods have, of course, been caused by the inevitable hiatuses of the political seasons in both London and Brussels. But that aside, instead of what should have been focussed and intensive negotiations with the EU, most of the last four years has been taken up with UK domestic politics. The most obvious example is how, almost immediately she had triggered Article 50 and despite repeated promises that it would not be in the national interest, Theresa May launched her ill-fated General Election, wiping two months out of the original twenty-four month schedule. Then, when the first main extension from April 2019 to October 2019 was agreed, and Donald Tusk pointedly advised the UK “not to waste this time”, it was mainly taken up with the Tory leadership contest.

That domestic and, especially, Tory Party politics have been so central is not accidental. It has arisen because the UK tried to undertake Brexit at the same time as trying to define what it meant and how it could or should be done, something which continues to be true right up to the present moment. That obviously flows from the lack of definition by the Leave campaign, but was very much compounded by the secretive and non-consensual way that May came to define Brexit (i.e. no single market, no customs union, virtually no ECJ role), and especially the unnecessary rapidity with which Article 50 was invoked, on the back of fighting a deeply divisive and also entirely unnecessary legal battle to prevent a parliamentary vote on doing so. It was not as if there had been a time frame promised to the electorate but, as with so much of the Brexit story, keeping the ever-angry, ever-suspicious, Brexit Ultras temporarily mollified trumped every other consideration.

Perhaps even worse than that, the ongoing battle to define Brexit whilst simultaneously enacting it has been characterised by repeated refusals to accept quite obvious facts. The consequence is not just that the debate has moved more slowly than the formal process required, but that it has gone round in endless circles. There are several examples that could be given but I’ll highlight a couple of the most important.

Going round in circles

One is the wilful refusal to accept that the terms of leaving would have to be agreed in advance of the terms of the future relationship, including the future trading relationship. That was built into Article 50, which only specified that the exit terms would be agreed “taking account of” the future relationship between the departing member and the EU.

Yet from the outset many Brexiters refused to accept that this was so and in particular to accept that a financial settlement would need to be made in advance of, and separately to, any trade deal (some, indeed, have never accepted that there is any need for a financial settlement at all and some, even, that the negotiations required Article 50 to be invoked at all). May herself did not seem to grasp the issue of there being two separate deals to be done until April 2017, and even in 2019 government ministers were still saying that a trade deal would be in place the day after exit.

One could actually argue that the EU showed flexibility in agreeing to create two phases for the Article 50 talks, one on the exit terms and, if sufficient progress was made, a second phase on future terms, even though that could not yield a signed trade deal in the period. But that, itself, was resented by the Brexiters who, as David Davis, the then Brexit Secretary, put it, threatened the ‘row of the summer’ (of 2017) over this sequencing.

That row never happened, but the sentiment underlying it continues to this very day, with its lineal descendent being the growing clamour from some Ultras to repudiate the Withdrawal Agreement even if there is a trade deal, and certainly if there is not. Even more bizarrely, despite having wanted to get going with trade talks from the outset, when phase 2 was entered, the UK collapsed into internal dissent about what future terms it was seeking, leading to eighteen months of infighting that culminated with May’s defenestration and replacement by Johnson

The second main way that Brexit has gone round in circles is the refusal of Brexiters to accept – or perhaps their inability to understand – the very basic proposition that leaving the single market (SM) and leaving the customs union (CU) both, in different ways, create borders. This isn’t some ruse of the EU’s, still less is it the EU’s punishment or even choice. It is the logical and legal consequence of leaving the institutions that remove borders.

If, as Brexiters insist, Brexit must mean the UK setting its own regulations and its own tariffs, then there must be a territory within which these apply, and if there is a territory then there must be a border delineating that territory. That is true in general, and it has the economic consequence of making ‘frictionless trade’ with the EU impossible. And it is true in the particular case of Northern Ireland, with all the political ramifications of that, something which again some Brexiters still insist is confected by the EU, or Ireland, or both.

Yet for years the UK continued to talk about frictionless trade as perfectly possible, even after hard Brexit had been announced. Even now, it’s common to see Brexiters talking as if post-Brexit borders will only happen if the EU insists upon it. As for Northern Ireland, the number of times under which ‘alternative arrangements’, ‘technological solutions’ and the ‘Malthouse compromise’ have come and gone in the Brexit debate is almost impossible to count. To these examples could be added other zombie ideas, of which the claims about GATT Article XXIV are perhaps the most infamous.

Choices have consequences

So the years of the Brexit process have been characterised by a repetitive grinding down of these recurrent refusals to face reality. What could and should have been understood before the Referendum – and certainly before beginning the Article 50 process – has had to be taught, like simple arithmetic to a child who is simultaneously truculent and dull-witted, to the Brexiters (or, as it seems to outsiders, to the UK itself). And these lessons – whilst varying in content - are all of the same general sort: in choosing Brexit, the UK has chosen the consequences of Brexit, which can’t be magicked away. In particular, if the UK is outside the EU (SM, CU) then none of the things which come with being in the EU (SM, CU) any longer apply.

The impossibility of frictionless trade and the unavailability of ‘alternative arrangements’ for borders has now –  at least at governmental level – been accepted (though, jaw-droppingly, is now described as “growing the customs sector” as if it were some sensible industrial policy rather than the introduction of massive new costs). Yet it is still necessary and justified for Michel Barnier to remind  the UK that ‘Brexit means Brexit’, as he did at the end of the last round of talks.

For although the UK’s negotiating position under Johnson and David Frost has superficially accepted being a ‘third country’ to the EU, it continues to seek things which go well beyond what any third country has* in a whole swathe of areas. And, more subtly, by framing many of its demands in terms of third country precedents, the UK fails to understand that these do not constitute a set of established ‘rights’ for a third country but are contingent upon what – in the specific circumstances of the UK – it is in the interests of the EU to agree.

Brexiters’ negotiating conundrums

This idea that the EU is likely to give the UK a generous deal is one of the strangest features of Brexit. It appears in various slightly different guises. One is that those who most loathe the EU and denounce it for any manner of evils, including that of bureaucratic rigidity and being a ‘protectionist racket’, seem, paradoxically, to have had as their working assumption that the EU would be charitable - or, in Brexiter-speak, ‘flexible’ - in its approach to a departing member.

Another equally contradictory version is that the UK holds all the cards whereas the EU is desperate for a deal (German car makers, trade surplus etc) and in any case moribund and on the point of collapse, but at the same time is a powerful bully, willing and able to punish the UK. Similar ideas are present when it’s claimed that the UK would be fine if there’s no deal and yet when the EU warns of the prospect no deal it is making a ‘threat’ to the UK; or, conversely, that the UK can gain leverage by threatening the EU with the damage of no deal and yet no deal would not damage the UK.

But the underlying issue here is that these negotiations do not conform to the normal idea of two sides each seeking to pursue its own rational interests. On the UK side that is partly because these fantasies about the EU mean that it is treated as this peculiar mixture of ogre and pushover, but it is more because, in pursuing Brexit, the UK is in the position of doing something which is not in its rational interests. If nothing else, that is clear from the fact that, as a trade negotiation, it’s unique in setting out to create worse terms than currently exist for both parties. For the EU, that has been forced upon it, and given Brexit happened it is acting rationally to protect its own interests – which turn out to be different to those ascribed to it by Brexiters, but no less rational for that (in brief: prioritising the protection of single market integrity).

For the UK it arises from the nature of Brexit itself. Brexiters themselves sometimes acknowledge this, when saying that they fought and won an emotional battle for ‘independence’, but don’t then follow through to realise that this has put the UK permanently on the back foot in negotiations over its interests, since these have been defined in irrational terms. That follow through has been avoided by insisting that the costs of the emotional appeal to sovereignty are just Project Fear, and that sovereignty comes, or ought to come, cheaply or even at no cost at all. So the emotional argument is cloaked in a pseudo-rational veneer. No hard choices have to be made because we can gain sovereignty (as Brexiters see it) without losing anything. This is also why Brexiters have repeatedly sought to discredit or conceal projections of the costs of Brexit.

This leads to a negotiating position which is partly captured by the familiar clich├ęs of ‘cakeism’ and ‘cherry picking’, but it’s actually much more perverse than that. The idea of having the cake (of membership) whilst eating the cake (of leaving), or of picking the juicy, enjoyable cherries and leaving the rest does imply a rationality – even if an opportunistic and unrealistic one. But the extreme Brexiter position is so emotionally hostile to everything associated with the EU that actually the cake is tainted and the cherries suspect. So they don’t just want what they can’t have, but they want what they don’t want. They are caught between wanting ‘a’ deal, but not wanting any actual deal.

If all that sounds convoluted, a different way of stating the Brexiters’ negotiating conundrum is this: whatever benefits the EU has economically, they all come at the price of sovereignty – we want sovereignty and we don’t care what it costs – but actually it’s cost free – or it would be if the EU was reasonable and would agree to what we want – then we’d have the exact same benefits as before – but those benefits come at the price of sovereignty -  so if they agree to what we want then it isn’t sovereignty, which is what we want at all costs.

This, which has always been the background to, and in many ways incorporated into, the UK’s official negotiating position, effectively makes any negotiated outcome impossible.

The sand in the gears

But there’s always been some sand in the gears of this rickety Heath Robinson of an argument, which is that any government actually in power, even one defined by Brexit, has to have at least one eye on reality. In power, rather than jeering from the side lines, no government can afford the political and economic price of sovereignty at all costs when those costs become manifest. Which is why Brexiters like David Davis, Steve Baker, Dominic Raab and Suella Braverman all resigned from ministerial positions where they had responsibility for enacting Brexit so that they could preserve their fantasies intact.

That was true for Johnson, as well, when he resigned as Foreign Secretary, but the lure of premiership brought him back to the table. So he now faces a similar situation to Theresa May in being forced to at least partly confront reality. She, of course, got shredded by her party for doing so, a fact that won’t be lost on Johnson not least since he led the charge. Since of his own volition there has been no Transition Period extension, he now has no more room to indulge the fantasies he did so much to promote at the expense of the realities he did so much to deny.

Hence we’re now reaching a pivotal moment, because in the next few months, one way or another, the UK-EU relationship is going to be re-framed by a deal of some sort, or by no deal. Either will have a big negative impact on individuals and businesses but, despite the claims of some, no deal will be considerably worse than a deal. In that sense, what happens matters greatly, including the precise nature of any deal which is done as that could have big impacts on specific sectors or activities. But in some ways the outcome won’t have much effect on the underlying situation.

Deal or no deal, the Brexit psychodrama will continue

If Johnson strikes a deal of any sort, then the Ultras within and outside his party will decry it for having compromised sovereignty. If he doesn’t strike a deal, then that won’t just be an end to matters but the beginning of fresh – and very urgent and difficult - negotiations which will be caught in the same insoluble loops and conundrums of the last four years of Brexit.

There is therefore no scenario that won’t have Brexiters saying ‘this is not what Brexit was meant to be’ and there is no scenario in which they will say ‘now we have what we always wanted’. Not only will they denounce any deal, but If there is the no deal ‘clean Brexit’ the most extreme call for they will say that the UK could have had a perfect deal but for betrayal by May and the remainers, and the intransigence of the EU. And deal or no deal (but especially no deal) they will step up their agitation to renege on the Withdrawal Agreement as a price not worth paying.

That is really worth reflecting upon. No matter how much pain Brexit causes the UK it is never going to stop the Brexiters complaining. David Cameron once famously called on his party to “stop banging on about Europe”. That didn’t happen, and so the Referendum was meant to put the issue to bed. When that was won by Brexiters, it might have been thought that that, surely, would put an end to matters. But it didn’t, and nothing will, no matter what is or is not agreed in the coming months. The Tory psychodrama about Europe, into which they have dragged the entire nation, is far from over.

So as the new Brexit term begins, no one should think that it will bring a resolution. We’re not about to graduate from Brexit, we’re just changing schools. The difference is that we are moving from the sheltered junior school of EU membership and the transition period, to the much harsher senior school outside.


*The link at this point is a handy extract of the relevant parts from a speech given by Michel Barnier at the Institute of International and European Affairs in Ireland this week.

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