It’s been a horrible week for Brexit news, and a depressing one for any hope that UK-EU relations will settle into harmony or, at least, pragmatic cooperation. Careful readers of this blog will have been primed for the resumption of the Jersey fishing rights row this autumn, and almost everyone expected a crisis over the Northern Ireland Protocol (NIP). With both happening simultaneously, it’s important to understand how they do and don’t relate to each other, not least because it’s clear that the Brexiters and the government are intent on lumping them together in false and hypocritical ways. But that’s also a difficult task, because each of them involves considerable complexity – hence an even longer than usual post.
Fishing licences row
As regards the row over licences for French boats, it is a complicated story as fishing stories always are. It is partly about the issuing of licences to fish in the 6-12 nautical mile zone by the UK generally (licences for the 12-200 mile zone are effectively granted automatically). However, the central issue relates to the large number of rejected or outstanding applications to fish in Channel Island waters, which first erupted in May. That adds another layer of complexity because of the distinctive constitutional status of the Channel Islands.
Jersey and Guernsey
The Jersey dispute arises from Brexit because the Trade and Cooperation Agreement (TCA) superseded the Anglo-French Granville Bay Agreement. The latter agreement was originally created, following numerous disputes between Jersey and France, in 1839 and was updated in 2000 with implementation in 2004. Scrapping it as part of Brexit was strongly lobbied for by the Jersey Fishermen’s Association during the TCA negotiations. Separately, the UK also chose to leave the 1964 London Fisheries Convention causing problems for fishing around Guernsey, Alderney and Sark.
As well as having that difference in historical background, the Guernsey problems have so far been quietly dealt with because its approach has been to issue interim licences until 31 October 2021, automatically renewable monthly until full new licences are issued in December to be in force from 31 January 2022 [1]. By contrast, the Jersey approach has resulted in a mixture of boats fully licensed, boats temporarily licensed until 31 January 2022, and boats which had an ‘amnesty’ until, in effect, 31 October 2021 but with no renewability unless transferred to the temporary licensing list. It is the latter boats which are at the centre of the row. This Guernsey-Jersey distinction is a niche issue, to say the least, yet it seems an important and neglected part of the story.
Bogus comparisons
At all events it is crucial to grasp that this row is primarily over licences for Jersey waters, which are issued by the Jersey government, given that central to France’s complaint is an alleged disparity between the UK’s treatment of its boats and those of other EU states. Thus Clément Beaune, France’s Minister for European Affairs, tweeted in response to David Frost that whereas about 90% of all EU licence requests had been granted by the UK [2], France had not received licences for 40% of its requests. The implication was that France was being discriminated against.
However, it was a bogus comparison because the majority (59%) of France’s ungranted licences are applications to fish in Jersey waters, and France seems to be the only EU country with boats applying for such licences (certainly, all licences so far granted by Jersey are to French boats). Moreover all of the small (under 12 metre) boats and about 80% of the large boats seeking UK (not Channel Islands) 6-12 mile licences are French. It is these smaller boats which are far more likely to have ungranted licences because they tend to lack the expensive GPS systems needed to readily provide the data required to prove they have an historical record of fishing in the relevant waters.
This means that, as a matter of simple arithmetic, France’s number and proportion of ungranted licences is bound to be far greater than any other EU country, not because it is being discriminated against but just because it is the only EU country involved in the vast majority of relevant applications (i.e. small boats in the inner zone around the UK and Jersey). It would be equally absurd to say that, because all the Jersey licences for EU boats have gone to France, it has been specially favoured! In fact, the only inter-country comparison that can be made for the applications over which the UK has discretion is between France and the other country seeking large boat licences in the UK inner zone, Belgium, which has 19% of its licences still pending (i.e. 81% granted) whereas France has only 3% pending (i.e. 97% granted).
This isn’t to say that France has no grievance at all – a key point is that had the TCA negotiations not been so truncated, at British insistence, the details of licensing data requirements for small boats could have been agreed. Nor is France behaving particularly heinously. After all, it’s hardly the only country in the world to make bellicose noises about fishing rights! But the grievance is not especially serious (although of course it matters hugely to the fishermen affected) and it’s not the grievance of discriminatory treatment claimed.
Contradictory conduct
Moreover, France’s conduct has been somewhat contradictory. On the one hand, it has been acting as if this were still an Anglo-French matter. That is despite the fact that France, like Jersey, had wanted Channel Islands fisheries to become part of the TCA - although, interestingly, during the May crisis, the French Minister of the Sea called for the Granville Bay Agreement to be reactivated and in September France called for a revival of consultative process of the old agreement. Yet, on the other hand, it has been seeking to make it a UK-EU dispute.
These are contradictory to the extent that, viewed as a UK-EU dispute, making threats of unilateral French action against British boats and imports, or raising energy supply tariffs to Jersey, is not only arguably disproportionate to the grievance but also arguably illegitimate. The UK government has suggested such action would be a breach of the TCA. The French argument is that it would be ‘retorsion’, falling outside of the Dispute Resolution Mechanisms of the TCA [3]. Yet, at the same time, French Prime Minister Jean Castex requested concerted EU action in a letter to European Commission President Ursula von der Leyen which was leaked last weekend (and of which more later).
In fact, the European Commission has been notably unwilling to ‘take France’s side’ or to escalate the row politically, perhaps recognizing that the grievance claim is rather overblown. Rather, it has acted as a broker, arranging technical meetings between British, French and Channel Island authorities. This led (unless it was a coincidence) to Jersey issuing some forty-nine further licences on Monday, and France subsequently suspending its threat of unilateral sanctions. On Thursday, Frost and Beaune met – itself perhaps slightly odd if this is seen as a UK-EU dispute – without apparent outcome but with no new flare-up of hostilities either. This isn’t the end of the story as there are still talks to come, and the new licences granted are only temporary, but as the week has gone on the row has certainly de-escalated.
Yet much damage has been done. Apart from a further deterioration in the Anglo-French relationship, Brexiters and the UK government have been all too keen to build upon the conflation of the Anglo-French and UK-EU aspects of the row to try to link it with their wider confrontational approach to Britain’s post-Brexit relations with the EU, especially as regards the NIP. So, in what was already a fraught situation, the fisheries row has exacerbated a “poisonous atmosphere” for the NIP talks (£).
Northern Ireland Protocol row
The NIP is bound up with a similarly long and far more fraught history, this time between the UK and Ireland, which is far too complex to review here. Crucially it too grows from (though does not supersede but seeks to accommodate) a situation defined by a pre-existing agreement between two member states of the EU, i.e. the 1998 Good Friday (Belfast) Agreement (GFA). Moreover, this agreement was to a large degree predicated upon both parties being member states, in that the EU single market and customs union had removed the need for an economic border between Ireland and Northern Ireland prior to the GFA and thereby created an important pre-condition for it.
So in both cases inter-governmental relationships became ameliorated by being enfolded within common membership of the EU and have been disrupted by Brexit. It’s not difficult to see how the longstanding UK-Spain dispute over Gibraltar falls into the same category, for all that it isn’t currently so fractious. The argument that the EU played a role in maintaining peace was mocked by Brexiters during the referendum campaign with the reductio ad absurdum that to point to it was to predict that Brexit would mean World War Three. But it is a fact that many longstanding disputes between member states have, at least, been de-escalated by virtue of membership of the EU.
Indeed, that’s underscored by Boris Johnson’s call upon Ursula von der Leyen to intervene in the fishing dispute with France. Actually, as an interesting article by Gideon Rachman suggests this week (£), it is probably the US which is best-placed to act as some sort of mediator between the UK and France over their now constant acrimony. The same may well be true as regards UK-EU relations, and if the NIP row escalates to a UK invocation of Article 16, as many expect, I wouldn’t be surprised to see some such initiative from Joe Biden’s administration, for all that the Brexiters distrust him.
Differences and connections
However, although in both cases Brexit has thrown up new problems, they are problems of a fundamentally different sort. As regards fishing rights, the French accusation is that the UK is not sticking to what it agreed in the TCA, but not questioning the terms of what was agreed. As regards Northern Ireland, the UK accusation is, first, that the EU is sticking too rigidly to what was agreed in the NIP and, second, that the terms of what was agreed are unacceptable.
Yet despite being different in these ways, both sides see the issues as being linked. For France, and perhaps the EU, they are both examples of UK duplicity and bad faith. This may well be unfair to the UK in terms of fishing licences, but it is certainly not as regards the NIP and goes to show the high price to be paid for serial dishonesty: it completely undermines credibility.
For the UK, what is now erroneously being called ‘the punishment letter’ from Castex to the European Commission President about fishing licences is being used to suggest that the EU’s entire approach to Brexit, including the NIP, is one of seeking to punish the UK. As ever, the liar-in-chief is Boris Johnson, who said (£) that Castex was “explicitly asking for Britain to be punished for leaving the EU”. In fact, the word ‘punish’ or its cognates didn’t appear in the letter. The relevant sentence would best be translated as “It is essential to clearly show to European public opinion that respect for commitments made is non-negotiable and that there is more damage in leaving the union than in remaining there.”
As such, this is just the boilerplate EU position that it must be demonstrably better to be a member than not to be, otherwise the union, like any other, has no purpose. Actually, If anything, the EU’s conduct over the fishing row, which has been placatory and not markedly supportive of France, shows the opposite of a punitive stance to Britain.
By pretending that the letter threatens ‘punishment’, an ever-present Brexiter myth is being invoked, as when in 2017 Johnson spoke of France trying to “administer punishment beatings”. In this current invocation it uses what Castex (didn’t) say as regards fishing to bolster the longstanding falsehood that the NIP and ultimately the entire issue of the Irish border was invented by the EU to punish the UK for Brexit and that they succeeded because of the failures of Theresa May’s government. Notably this position was re-iterated in David Frost’s foreword to a Policy Exchange document on the NIP published this week.
So there is a triple lie here: a lie about what Castex said about the fishing row, a lie about the reasons for the NIP, and a lie about the implications of the fishing row letter for the NIP row. The latter lie involves an entirely opportunistic and false equivalence, in the same way as that endlessly drawn between the quickly abandoned EU proposal to invoke Article 16 over vaccines and the UK’s current threat to do so.
No need to take sides
Because of this incontinent flood of lies, there is a temptation for erstwhile remainers to ‘side with France’ in all aspects of the fisheries row. It is also tempting because the Brexiters are trying to use the row with France to drum up jingoistic support for Brexit just at the time that the economic damage of Brexit is becoming so obvious. But these are not good reasons to support France’s stance, any more than they were when some sought to defend the EU’s Article 16 foolish mis-step over vaccines in the face of the Brexiters’ lies and jingoism about that.
It is neither necessary nor right to embrace the ‘them versus us’ logic of Brexiters. The dividing line on both the fishing and the NIP issues is a clear and principled one which is solely about who is abiding by, and who is flouting, the terms of what was agreed. Being sucked into supporting France when it is not especially warranted simply plays into the hands of those Brexiters who want to paint ‘remainers’ as unpatriotic, and to use such tactics to discredit or divert attention from the follies of Brexit. It also undermines the legitimate defence of the EU’s position as regards the NIP by enabling the accusation that those who are opposed to Brexit blindly support the ‘other side’, using their stance on the fishing row as proof.
On the other hand, it is perfectly justifiable to point to the hypocrisy of the Brexiters and the government. After all, they constantly call for the EU to be ‘flexible’ in its implementation not just of the NIP but also of import controls generally (remember the outcry over the ‘ham sandwich confiscation’). So why not offer flexibility over fishing licences, especially as the row revolves around a few small boats? Equally, for all that the French threats of unilateral action were unjustified, it is rank hypocrisy for the government to be invoking respect for international law and good faith when it has shown so little of either over the NIP.
The clocks (don’t) go back
As to that, Frost continues to escalate the rhetoric, which suggests that the triggering of Article 16 is in the offing and, with that, as the Irish Taoiseach warned this week, a very serious crisis. Frost meets Maros Sefcovic today, which may yield further clues as to whether that will happen. However, as I’ve repeatedly argued, there is little point in speculating about the intentions of a government whose intentions are entirely opaque, perhaps even to itself.
That said, reports that the government plans to rig the legal advice to justify invoking Article 16 (£) are very ominous. And the Policy Exchange document Frost forwarded makes it clearer than ever that Brexiters see phase 1 of the Article 50 negotiations, in 2017, as having being pivotal (correctly, in my view, though I don’t agree with their explanation or conclusions). Equally clearly, they, and more particularly Johnson and Frost, think they can use Article 16 to re-wind the clock and have another shot at getting ‘true Brexit’.
Whatever else happens, they will fail in that. History, politics, and indeed physics, don’t work like that. As for ‘true Brexit’, it remains as elusive as ever, the fading illusion of a dwindling number of the deluded and the deranged. All we have are the realities of Brexit. These, in the form of this week’s bickering and dishonesty, have been on display to the world because of COP-26, with a cringingly ‘larky’ speech from our manifestly inadequate Prime Minister.
Imagine how different that might have been had the UK still been a leading partner within the huge EU economic and diplomatic power bloc. Or imagine if, as the Brexiters promised, the UK was striding self-confidently forward as Global Britain, admired and respected throughout the world, rather than the laughing stock Brexit has made us. Amongst the many crimes of Brexit is to have robbed us of the former possibility on the fraudulent prospectus of the latter. There’s no way to turn the clock back on that.
Notes
[1] This also means that the implied complaint in the Castex letter that Guernsey has issued no permanent licences, and therefore fewer even than the UK and Jersey, is misconceived – it is only because that point in the process hasn’t been reached, but French boats are able to fish in Guernsey waters in the meantime. This is quite different to the situation of those boats which have neither permanent nor temporary licences from Jersey.
[2] The UK government gives the figure as 98%, but this is misleading, especially in the context of this row, as it excludes the Channel Islands figures. With those taken into account the French claim of about 90% is right (in fact, it’s closer to 88% on the basis of the UK government’s statement of licences issued as at 3 November – this statement is the source of all the statistics cited in this post for licences granted other than where other links are provided).
[3] The entire situation is a complicated one because the specific fisheries dispute settlement mechanism within the TCA does allow some retaliatory measures to be taken in advance of arbitration, but with various rules and processes attached. A further complication is that some of the provisions within that specific mechanism don’t apply to the Channel Islands. And yet another complication is that the UK government seems to be envisaging a counter-action to any French actions under the general TCA disputes settlement mechanism rather than that specific to fisheries. I don’t pretend to have any expertise at all in this arcane topic but for those seeking to make sense of it there is an Institute for Government overview, a more detailed House of Commons Library briefing, and a lengthy blog post on Professor Steve Peers’ EU Law Analysis website. I’m very grateful to Professor Peers for answering my queries on this topic whilst preparing this post – all errors are of course my own.
Showing posts with label Channel Islands. Show all posts
Showing posts with label Channel Islands. Show all posts
Friday, 5 November 2021
Friday, 29 October 2021
Wanted: a serious post-Brexit policy
Over the last few years, one of the most acute commentators on Brexit has been Jonathan Lis, and in a recent article he concludes that the three fundamental consequences of Brexit are that “if you erect trade barriers, trade will be harder. If you gut the workforce, there will be fewer people to do necessary jobs. If you leave a club, you no longer enjoy the perks”.
Once, these would have been warnings. With those warnings ignored, they are now accomplished facts, although what should flow from them is a matter of legitimate political debate. What matters, therefore, is no longer to argue about whether Brexit was right or wrong but to respond to the realities it has brought.
Of course those two things can’t be entirely decoupled. For it is politically impossible for the present government to acknowledge that most of the country’s long-term economic problems either derive from, or are intertwined with, or have been exacerbated by, Brexit. Its entire existence is bound up with the Brexit project, and it demands fealty to that project from its members.
So it is both astonishing yet unsurprising that this week’s budget statement did not contain any acknowledgment of the problems Brexit is causing, referring instead to global issues and the pandemic in relation to supply disruptions and inflation as being “not unique to the UK”. This was, at best, disingenuous in ignoring the additional role of Brexit, which is unique to the UK. It also ignored that, as stated by the head of the Office for Budgetary Responsibility (OBR), the long-term negative impact of Brexit on GDP will be twice that of the pandemic. In fact, the actual word ‘Brexit’ was not used once during the statement, although there were a couple of mentions of having left the EU.
However, these will have disappointed anyone expecting that by now, surely, we would be reaping the dividends of doing so. Indeed, the only announcements of things which might be described (by some) as such were about a trivial tax break for merchant ships flying the red ensign (£) and the cutting of air passenger duty on domestic flights (a strange decision in the run up to COP-26). There was also a claim that the restructuring of alcohol duties was in some way a result of leaving the EU, but it wasn’t clear which elements of it this referred to, not least as Chancellor Rishi Sunak said that many of the anomalies being corrected had built up over 140 years, long before the EU even existed.
The budget statement is just the latest manifestation of the more general way that for months now Brexit has either been left unmentioned, or not addressed honestly. The result is that the UK doesn’t currently have anything like a serious policy response – by which I mean one that is realistic, pragmatic and effective – to any of the three core consequences of Brexit that Lis identifies.
Trade: no serious policy
Aggregate figures for international trade are a mess because of the pandemic, because of multiple and changing measurement methodologies, because of data lags, and because the transition period only ended ten months ago. So it’s still possible to quibble about the numbers. But although not mentioned by Sunak in his speech, the latest figures from the OBR which accompanied the budget show that UK goods trade with the EU is down by 15% and with non-EU by 7% since 2019. This suggests a very considerable negative Brexit effect above and beyond that of the pandemic.
There’s also some evidence (£) that as trade recovers globally from the pandemic the British recovery is lagging behind that of other countries because of more restricted trade with the EU. And there is compelling firm-level evidence that trading with the EU is more difficult, although, as an excellent new review by Dr Anna Jerzewska of the UK Trade Policy Observatory shows, there is a lot of variation in how firms are affected by, and respond to, these difficulties.
In any case, the full picture of what Brexit is going to do to trade isn’t yet available for the simple reason that the UK has twice postponed introducing full import controls, and won’t do so until July 2022 (unless there is another postponement). And whilst the EU’s import controls were in place from the beginning of this year, there was a grace period on the provision certification of product origin (i.e. of whether a sufficient percentage of a good is made in the UK to qualify for tariff-free trade). This expires at the end of this year, and there are reports (£) that many British firms are not ready for this new complexity. Thus the figures are likely to get worse because there are still significant Brexit trade frictions to come on top of those which have already depressed UK-EU trade.
However, even before watertight data are available and even before full implementation, we can be certain that UK-EU trade will be less than it would have been as a result of Brexit. As Lis indicates, there is nothing complicated about it: Brexit introduces new trade barriers, so by definition there will be less trade than there would otherwise have been. In a similar way, whilst a government spokesperson said it was “too early to draw conclusions” about it, the news that Welsh ports like Holyhead are declining because Irish freight to other EU countries is re-routing was inevitable. Like water, trade will find new routes if existing ones are constrained.
Of course the Brexiter claim and the current government’s policy is that this will be offset by increased trade with non-EU countries as a result of new trade deals. If it is, then at best that would be damage limitation. But it almost certainly won’t be. Free trade agreements with faraway countries simply won’t be large enough, as the much-trumpeted deal in principle with New Zealand (NZ) which will add virtually nothing to UK GDP shows.
Moreover, especially because the government is so keen to make such deals for the symbolic reason of ‘proving’ Brexit benefits, they come at a hefty price. In the case of the NZ deal this will be paid especially by British lamb farmers, as NZ reporting of the deal shows, and shellfish producers (£). In both cases, these industries have also already suffered in their trade with the EU, so the NZ agreement is actually a double blow, not a mitigation.
This isn’t to say that no one benefits from any of this. For example, lawyers and architects will be able to work in NZ a bit more easily. Northern Ireland could have new opportunities, for example in hosting distribution hubs to service both UK and EU markets. But, overall, in what for the UK is the key economic domain of international trade, we have a policy that makes no economic sense - even viewed as damage limitation, seeking improvements to the trade agreement with the EU would make more sense. Worse, it is a policy which is concealed by vapid boosterism and, at best, misleading claims.
Labour and supply: no serious policy
Back at home, there is no end in sight to the labour shortages which, in turn, are contributing the supply crisis of which distribution of chemicals for sewage treatment is the latest high profile manifestation. Lack of HGV drivers is central to that and, as noted in my previous post, whilst increasing wages may gradually ease the problem it is already creating new shortages of drivers of buses and refuse wagons. That is just one example of a wider picture – another is the way that the better wages and conditions now being offered to warehouse staff or hospitality and retail staff are sucking workers away from social care, which is already in dire crisis.
One of the false arguments for Brexit, often made by Lexiters and recently embraced by Johnson’s government, was that immigration from the EU drove down wages. From that point of view, wage rises now (to the extent that they are happening) are a vindication that the argument was correct. But it conflates two different things. The idea that immigration drives down wages is founded on the ‘lump of labour’ fallacy – that there is a fixed amount of work to be done in the economy, so more workers means lower wages. The reason it is a fallacy is because immigration produces new economic activity which creates new jobs. That’s only a general principle, but empirical evidence as regards EU migration to the UK suggests that any negative impact on wages was small, whilst the net fiscal benefit is well-established.
On the other hand, what cutting off immigration does do is to create a ceiling on the amount of labour available. So wages may go up in response, but so do prices (negating the real effect of the wage rise) unless there has also been an increase in productivity, whilst some work goes undone – meaning shortages of goods and services. In fact, the Institute for Fiscal Studies expects real wages to remain stagnant until 2026. At the margin, it could be that some people who are able to work but were previously unemployed or under-employed are brought into the workforce, but despite longstanding myths of shirkers making unemployment a lifestyle choice because of generous benefits, the numbers are not large enough to make much difference.
This can’t be detached from the consequences of being a country with a rapidly rising proportion of the population who are over 65 and a declining fertility rate. There simply aren’t enough workers for the work needed, and it’s going to get worse, not better. Nor is training up the answer – for all that it may well be desirable in itself – as it just shifts the labour shortage from higher skill to lower skill occupations. And, in any case, the government’s immigration policy, which favours “the brightest and the best”, as re-iterated in Sunak’s budget, is actually predicated on the default of lower skill and lower pay jobs being done by British workers.
There’s clearly a lot more that could be said about all this. I’m not pretending for a moment that it is a simple issue, but the point is precisely that the complex interactions of immigration, demographics, employment, productivity, skills, wages, and inflation mean that simply ripping up freedom of movement overnight, and making immigration in general more difficult and less appealing, is a recipe for chaos. That is exactly what is unfolding, with hardly a sector of the British economy not suffering from labour and skills shortages, and job vacancies at a record high.
And if all this sounds rather abstract then consider a couple of recent stories. First, Polish journalist and lorry driver Tomasz Orynski’s explanation of why EU lorry drivers are unlikely to be tempted back to help out with the supply crisis (see also comedian Matt Green’s take on this kind of issue). Or, second, that Sunak’s announcement of £5.9 billion of capital funding for the NHS to deal with the treatment backlog caused by the pandemic is likely to founder on the lack of staff, such as anaesthetists, needed to operate the new equipment and facilities.
In these and similar cases, the ultimate pain of a lack of serious policy is felt by all of us whose lives get gradually harder and meaner as shelves stay half-empty, operations are postponed, building work is delayed, or social care is unavailable to ourselves or our relatives.
Relationship with EU: no serious policy
Meanwhile, the UK is going to have to learn to live with the realities of being a third country to the EU. In principle, this should not be so hard, at least for Brexiters, since it is what they wanted. But from the outset, the consequences of Brexit have been treated as EU punishment, rather than Britain’s choice, and that sentiment still permeates the pro-Brexit press. It is also present in the way the government continues to grizzle about the Brexit deal it agreed. This in turn means that, rather than try to develop a harmonious partnership, the government continues to make bellicose demands, most obviously over the Northern Ireland Protocol (NIP).
So far as that is concerned, this week has seen the wearying re-play of the kind of thing we saw when the Trade and Cooperation Agreement (TCA) was being negotiated, with some reports suggesting the government would insist on all its demands being met, others that the EU would make no concession on what is now the core ECJ issue, and still others claiming that a compromise deal is in the offing (£). Each statement is picked over for signs as to what it means but, as at the time of the TCA talks, it’s a pointless exercise because it’s impossible to disentangle the substance from Boris Johnson and David Frost’s tedious gamesmanship.
The real point is that the UK’s choices, whilst they exist, are quite limited. The government can accept the latest EU proposals on checks and formalities, and perhaps get a fairly pointless fudge on the ECJ’s role. In which case, what do the theatrics achieve? Or it can make good on its ongoing threat to trigger Article 16 – but then what? Just more negotiations, but in an even more sour atmosphere. And then what? What is it actually hoping to achieve? The most hardline answer, presumably, would be to completely unpick the NIP and force the EU to put checks in between Ireland and the rest of the single market. But, even assuming that happened, it just leaves a permanently toxic legacy with the EU – not to mention with Dublin and, very likely, Washington.
As this goes on, and the same will be true in any future rows, the EU has plenty of ways of exerting pressure on the UK. It’s claimed by Bill Cash that the EU is delaying ratification of Britain’s associate membership of the Horizon Europe scientific research programme as leverage in the NIP negotiations. Suppose that’s true: welcome to the real world, in which the currency is relative power. What’s the UK going to do? Decide to pull out of Horizon Europe? That would be far more damaging to the UK than the EU. In this and countless other areas the EU can squeeze the UK in pursuit of its own interests, and the UK doesn’t have much to squeeze back with. That’s not ‘punishment for Brexit’, it’s the self-punishment Brexit has inflicted on the UK*.
We’ve left the EU, but we haven’t left Europe
Of course I understand the argument that there’s some domestic political dividend for the Tories in having an antagonistic relationship with the EU. But that isn’t a serious policy if the criterion of such a policy is national and strategic interest. That interest lies in having good neighbourly relations with the economic and regulatory hegemon next door. We have little clout because we’re no longer ‘in the room’ where decisions that affect us are made. That was the choice we (collectively) made. But the facts of geography, history, economy and politics mean that – whether Brexiters like it or not – we live just outside the room. We’ve left the EU, but we haven’t left Europe, to coin a phrase. So we need to be realistic about what that means, namely that we have a bit more clout as a trustworthy friend than as a dishonest antagonist.
Realistically, there’s almost no chance that the present government will develop serious, effective post-Brexit policies in any of the three fundamental areas. It’s possible that no UK government ever will. If that is so, it is a serious problem because the magnitude of Brexit means that ‘post-Brexit policy’ isn’t a discrete area, but shapes what can and can’t be done across just about every other policy area from health and social care to science and innovation.
This also has to mean that any political party which aspires to making a meaningful policy offer has to address Brexit. Clearly that includes the Labour Party, which remains largely unwilling to discuss Brexit as it response to the budget showed. The exception to that is as regards new trade deals such as that with NZ where Shadow Trade Secretary Emily Thornberry has been robust in her criticisms. Presumably that is because it is seen as not being directly critical of Brexit. But that actually applies across the board in that the debate now needn’t – and perhaps at this time shouldn’t – be in terms of whether Brexit should have been done, but must be realistic about the consequences of its having been done.
The danger, as I see it, is that UK politics is moving too slowly, if at all, towards such realism, whilst the economic and other consequences are happening much more quickly, and will be structurally ingrained by the time, if ever, that the politics catches up.
*It’s tempting to include in this the Jersey fishing rights row which as expected has now revived. But that row is more complex and nuanced than simply being a UK-EU stand-off. I’ll probably do more on this next week if, as is likely, it continues. For now, the comments and links from the post where I first discussed the issue (the sub-section entitled ‘Jersey row’) may be useful.
Once, these would have been warnings. With those warnings ignored, they are now accomplished facts, although what should flow from them is a matter of legitimate political debate. What matters, therefore, is no longer to argue about whether Brexit was right or wrong but to respond to the realities it has brought.
Of course those two things can’t be entirely decoupled. For it is politically impossible for the present government to acknowledge that most of the country’s long-term economic problems either derive from, or are intertwined with, or have been exacerbated by, Brexit. Its entire existence is bound up with the Brexit project, and it demands fealty to that project from its members.
So it is both astonishing yet unsurprising that this week’s budget statement did not contain any acknowledgment of the problems Brexit is causing, referring instead to global issues and the pandemic in relation to supply disruptions and inflation as being “not unique to the UK”. This was, at best, disingenuous in ignoring the additional role of Brexit, which is unique to the UK. It also ignored that, as stated by the head of the Office for Budgetary Responsibility (OBR), the long-term negative impact of Brexit on GDP will be twice that of the pandemic. In fact, the actual word ‘Brexit’ was not used once during the statement, although there were a couple of mentions of having left the EU.
However, these will have disappointed anyone expecting that by now, surely, we would be reaping the dividends of doing so. Indeed, the only announcements of things which might be described (by some) as such were about a trivial tax break for merchant ships flying the red ensign (£) and the cutting of air passenger duty on domestic flights (a strange decision in the run up to COP-26). There was also a claim that the restructuring of alcohol duties was in some way a result of leaving the EU, but it wasn’t clear which elements of it this referred to, not least as Chancellor Rishi Sunak said that many of the anomalies being corrected had built up over 140 years, long before the EU even existed.
The budget statement is just the latest manifestation of the more general way that for months now Brexit has either been left unmentioned, or not addressed honestly. The result is that the UK doesn’t currently have anything like a serious policy response – by which I mean one that is realistic, pragmatic and effective – to any of the three core consequences of Brexit that Lis identifies.
Trade: no serious policy
Aggregate figures for international trade are a mess because of the pandemic, because of multiple and changing measurement methodologies, because of data lags, and because the transition period only ended ten months ago. So it’s still possible to quibble about the numbers. But although not mentioned by Sunak in his speech, the latest figures from the OBR which accompanied the budget show that UK goods trade with the EU is down by 15% and with non-EU by 7% since 2019. This suggests a very considerable negative Brexit effect above and beyond that of the pandemic.
There’s also some evidence (£) that as trade recovers globally from the pandemic the British recovery is lagging behind that of other countries because of more restricted trade with the EU. And there is compelling firm-level evidence that trading with the EU is more difficult, although, as an excellent new review by Dr Anna Jerzewska of the UK Trade Policy Observatory shows, there is a lot of variation in how firms are affected by, and respond to, these difficulties.
In any case, the full picture of what Brexit is going to do to trade isn’t yet available for the simple reason that the UK has twice postponed introducing full import controls, and won’t do so until July 2022 (unless there is another postponement). And whilst the EU’s import controls were in place from the beginning of this year, there was a grace period on the provision certification of product origin (i.e. of whether a sufficient percentage of a good is made in the UK to qualify for tariff-free trade). This expires at the end of this year, and there are reports (£) that many British firms are not ready for this new complexity. Thus the figures are likely to get worse because there are still significant Brexit trade frictions to come on top of those which have already depressed UK-EU trade.
However, even before watertight data are available and even before full implementation, we can be certain that UK-EU trade will be less than it would have been as a result of Brexit. As Lis indicates, there is nothing complicated about it: Brexit introduces new trade barriers, so by definition there will be less trade than there would otherwise have been. In a similar way, whilst a government spokesperson said it was “too early to draw conclusions” about it, the news that Welsh ports like Holyhead are declining because Irish freight to other EU countries is re-routing was inevitable. Like water, trade will find new routes if existing ones are constrained.
Of course the Brexiter claim and the current government’s policy is that this will be offset by increased trade with non-EU countries as a result of new trade deals. If it is, then at best that would be damage limitation. But it almost certainly won’t be. Free trade agreements with faraway countries simply won’t be large enough, as the much-trumpeted deal in principle with New Zealand (NZ) which will add virtually nothing to UK GDP shows.
Moreover, especially because the government is so keen to make such deals for the symbolic reason of ‘proving’ Brexit benefits, they come at a hefty price. In the case of the NZ deal this will be paid especially by British lamb farmers, as NZ reporting of the deal shows, and shellfish producers (£). In both cases, these industries have also already suffered in their trade with the EU, so the NZ agreement is actually a double blow, not a mitigation.
This isn’t to say that no one benefits from any of this. For example, lawyers and architects will be able to work in NZ a bit more easily. Northern Ireland could have new opportunities, for example in hosting distribution hubs to service both UK and EU markets. But, overall, in what for the UK is the key economic domain of international trade, we have a policy that makes no economic sense - even viewed as damage limitation, seeking improvements to the trade agreement with the EU would make more sense. Worse, it is a policy which is concealed by vapid boosterism and, at best, misleading claims.
Labour and supply: no serious policy
Back at home, there is no end in sight to the labour shortages which, in turn, are contributing the supply crisis of which distribution of chemicals for sewage treatment is the latest high profile manifestation. Lack of HGV drivers is central to that and, as noted in my previous post, whilst increasing wages may gradually ease the problem it is already creating new shortages of drivers of buses and refuse wagons. That is just one example of a wider picture – another is the way that the better wages and conditions now being offered to warehouse staff or hospitality and retail staff are sucking workers away from social care, which is already in dire crisis.
One of the false arguments for Brexit, often made by Lexiters and recently embraced by Johnson’s government, was that immigration from the EU drove down wages. From that point of view, wage rises now (to the extent that they are happening) are a vindication that the argument was correct. But it conflates two different things. The idea that immigration drives down wages is founded on the ‘lump of labour’ fallacy – that there is a fixed amount of work to be done in the economy, so more workers means lower wages. The reason it is a fallacy is because immigration produces new economic activity which creates new jobs. That’s only a general principle, but empirical evidence as regards EU migration to the UK suggests that any negative impact on wages was small, whilst the net fiscal benefit is well-established.
On the other hand, what cutting off immigration does do is to create a ceiling on the amount of labour available. So wages may go up in response, but so do prices (negating the real effect of the wage rise) unless there has also been an increase in productivity, whilst some work goes undone – meaning shortages of goods and services. In fact, the Institute for Fiscal Studies expects real wages to remain stagnant until 2026. At the margin, it could be that some people who are able to work but were previously unemployed or under-employed are brought into the workforce, but despite longstanding myths of shirkers making unemployment a lifestyle choice because of generous benefits, the numbers are not large enough to make much difference.
This can’t be detached from the consequences of being a country with a rapidly rising proportion of the population who are over 65 and a declining fertility rate. There simply aren’t enough workers for the work needed, and it’s going to get worse, not better. Nor is training up the answer – for all that it may well be desirable in itself – as it just shifts the labour shortage from higher skill to lower skill occupations. And, in any case, the government’s immigration policy, which favours “the brightest and the best”, as re-iterated in Sunak’s budget, is actually predicated on the default of lower skill and lower pay jobs being done by British workers.
There’s clearly a lot more that could be said about all this. I’m not pretending for a moment that it is a simple issue, but the point is precisely that the complex interactions of immigration, demographics, employment, productivity, skills, wages, and inflation mean that simply ripping up freedom of movement overnight, and making immigration in general more difficult and less appealing, is a recipe for chaos. That is exactly what is unfolding, with hardly a sector of the British economy not suffering from labour and skills shortages, and job vacancies at a record high.
And if all this sounds rather abstract then consider a couple of recent stories. First, Polish journalist and lorry driver Tomasz Orynski’s explanation of why EU lorry drivers are unlikely to be tempted back to help out with the supply crisis (see also comedian Matt Green’s take on this kind of issue). Or, second, that Sunak’s announcement of £5.9 billion of capital funding for the NHS to deal with the treatment backlog caused by the pandemic is likely to founder on the lack of staff, such as anaesthetists, needed to operate the new equipment and facilities.
In these and similar cases, the ultimate pain of a lack of serious policy is felt by all of us whose lives get gradually harder and meaner as shelves stay half-empty, operations are postponed, building work is delayed, or social care is unavailable to ourselves or our relatives.
Relationship with EU: no serious policy
Meanwhile, the UK is going to have to learn to live with the realities of being a third country to the EU. In principle, this should not be so hard, at least for Brexiters, since it is what they wanted. But from the outset, the consequences of Brexit have been treated as EU punishment, rather than Britain’s choice, and that sentiment still permeates the pro-Brexit press. It is also present in the way the government continues to grizzle about the Brexit deal it agreed. This in turn means that, rather than try to develop a harmonious partnership, the government continues to make bellicose demands, most obviously over the Northern Ireland Protocol (NIP).
So far as that is concerned, this week has seen the wearying re-play of the kind of thing we saw when the Trade and Cooperation Agreement (TCA) was being negotiated, with some reports suggesting the government would insist on all its demands being met, others that the EU would make no concession on what is now the core ECJ issue, and still others claiming that a compromise deal is in the offing (£). Each statement is picked over for signs as to what it means but, as at the time of the TCA talks, it’s a pointless exercise because it’s impossible to disentangle the substance from Boris Johnson and David Frost’s tedious gamesmanship.
The real point is that the UK’s choices, whilst they exist, are quite limited. The government can accept the latest EU proposals on checks and formalities, and perhaps get a fairly pointless fudge on the ECJ’s role. In which case, what do the theatrics achieve? Or it can make good on its ongoing threat to trigger Article 16 – but then what? Just more negotiations, but in an even more sour atmosphere. And then what? What is it actually hoping to achieve? The most hardline answer, presumably, would be to completely unpick the NIP and force the EU to put checks in between Ireland and the rest of the single market. But, even assuming that happened, it just leaves a permanently toxic legacy with the EU – not to mention with Dublin and, very likely, Washington.
As this goes on, and the same will be true in any future rows, the EU has plenty of ways of exerting pressure on the UK. It’s claimed by Bill Cash that the EU is delaying ratification of Britain’s associate membership of the Horizon Europe scientific research programme as leverage in the NIP negotiations. Suppose that’s true: welcome to the real world, in which the currency is relative power. What’s the UK going to do? Decide to pull out of Horizon Europe? That would be far more damaging to the UK than the EU. In this and countless other areas the EU can squeeze the UK in pursuit of its own interests, and the UK doesn’t have much to squeeze back with. That’s not ‘punishment for Brexit’, it’s the self-punishment Brexit has inflicted on the UK*.
We’ve left the EU, but we haven’t left Europe
Of course I understand the argument that there’s some domestic political dividend for the Tories in having an antagonistic relationship with the EU. But that isn’t a serious policy if the criterion of such a policy is national and strategic interest. That interest lies in having good neighbourly relations with the economic and regulatory hegemon next door. We have little clout because we’re no longer ‘in the room’ where decisions that affect us are made. That was the choice we (collectively) made. But the facts of geography, history, economy and politics mean that – whether Brexiters like it or not – we live just outside the room. We’ve left the EU, but we haven’t left Europe, to coin a phrase. So we need to be realistic about what that means, namely that we have a bit more clout as a trustworthy friend than as a dishonest antagonist.
Realistically, there’s almost no chance that the present government will develop serious, effective post-Brexit policies in any of the three fundamental areas. It’s possible that no UK government ever will. If that is so, it is a serious problem because the magnitude of Brexit means that ‘post-Brexit policy’ isn’t a discrete area, but shapes what can and can’t be done across just about every other policy area from health and social care to science and innovation.
This also has to mean that any political party which aspires to making a meaningful policy offer has to address Brexit. Clearly that includes the Labour Party, which remains largely unwilling to discuss Brexit as it response to the budget showed. The exception to that is as regards new trade deals such as that with NZ where Shadow Trade Secretary Emily Thornberry has been robust in her criticisms. Presumably that is because it is seen as not being directly critical of Brexit. But that actually applies across the board in that the debate now needn’t – and perhaps at this time shouldn’t – be in terms of whether Brexit should have been done, but must be realistic about the consequences of its having been done.
The danger, as I see it, is that UK politics is moving too slowly, if at all, towards such realism, whilst the economic and other consequences are happening much more quickly, and will be structurally ingrained by the time, if ever, that the politics catches up.
*It’s tempting to include in this the Jersey fishing rights row which as expected has now revived. But that row is more complex and nuanced than simply being a UK-EU stand-off. I’ll probably do more on this next week if, as is likely, it continues. For now, the comments and links from the post where I first discussed the issue (the sub-section entitled ‘Jersey row’) may be useful.
Friday, 7 May 2021
The realities of sovereignty
One way of telling the story of Brexit is that it was sold to the British public as, and perhaps believed by its advocates to be, a project to regain sovereignty but without any economic costs and, even, with economic benefits. Since that was impossible, when it came to be delivered, sovereignty was prioritised despite the economic costs. Of course, there is a huge flaw in that story, which is that the idea that EU membership meant a loss of sovereignty and Brexit meant regaining it was simply false or, at best, as demonstrated in Anthony Barnett’s superb essay from 2018, based on a concept of sovereignty so dated and naive as to be worthless.
Nevertheless, for Brexiters, and perhaps many leave voters, it had a meaning, which had two, related but different, aspects. One was that a country should and could decide ‘for itself’ what rules to follow. The other, more blatantly nationalistic, was that this country, in particular could and would get ‘more for itself’ on its own than it could within the EU because, as Vote Leave insisted (see slide 10 of link), “Great Britain is a great country” with the fifth largest economy, G7 membership, a permanent seat on the UN Security Council, and significant intelligence and military capability.
Sovereignty in practice: latest news
What we are now seeing in abundance are the realities and limitations of those ideas of sovereignty, even within their own terms. It was already plain in the Trade and Cooperation Agreement (TCA) which reflects the way that the UK prioritised sovereignty over anything else. Thus what resulted was, in effect, a tariff-free deal for domestically produced goods and very little more. All of the currently emerging costs to industries and consumers flow from that, including the extensiveness of the checks needed to comply with the Northern Ireland Protocol (i.e. because a ‘deeper’ TCA would have meant a correspondingly ‘thinner’ Irish Sea border).
Norway non-agreement
The most obvious new example is the failure to reach a fishing deal with Norway, with potentially devastating effects on British cod fishing. Before, the UK benefitted from the agreements made between the EU and Norway, which is not part of the Common Fisheries Policy (CFP). Now, it must strike its own deal with Norway but has not been able to. This is an interesting development because, unlike negotiations with the EU, it is not presented in terms of Britain being ‘punished’ for Brexit or as a failure by Norway to recognize Britain as a ‘sovereign equal’. So a lot of the standard Brexiters’ rhetorical smokescreen is stripped away and the reality emerges: UK sovereignty is circumscribed by that of other countries, even quite small countries can and will resist the UK’s demands, and they are more able to do so now that it is not an EU member.
Jersey row
Fishing is also central to this week’s drama over the permits that, because of Brexit and in line with the fishing chapter of the TCA, French fishermen now need to fish in Jersey’s waters (it has arisen now because, until the end of April, there was an ‘amnesty’ under which the pre-Brexit arrangements continued). It’s a highly complicated story as all fishing stories are, but particularly so because of the distinctive constitutional status of the Channel Islands. Thus it is not actually about CFP, but it is about Brexit because the TCA superseded the Granville Bay Agreement, dating back to the nineteenth century but last amended in 2000, which had governed fishing rights in these waters. Scrapping it as part of Brexit was strongly lobbied for by the Jersey Fishermen’s Association during the TCA negotiations. Separately, the UK also chose to leave the 1964 London Fisheries Convention (causing problems for fishing around Guernsey, Alderney and Sark which have been more quietly dealt with by agreeing an extension of the interim arrangements with the EU).
Brexiters see ‘taking back control of our waters’ and being ‘an independent coastal nation’ as emblematic of regaining sovereignty. But the inevitable consequence is to encounter the sovereignty of other countries. For this was not, as some Brexiters are inevitably spinning it, a row with the EU but with France, although the EU is ‘siding’ with France in saying the permits are not being issued as the TCA says they should be (£) (the UK government disputes this – I do not know who is correct, but there are now talks underway).
This carries two lessons. First, that the EU will tend to stand up for its members against third countries, which is one of the ways sovereignty is magnified by membership. Second, it underscores that EU membership does not end national sovereignty. Nor is it necessary to leave the EU to engage in nationalistic posturing to appeal to nativist voters. Hence, with elections in both countries in prospect, foolish and ridiculous words from French politicians threatening to cut off electricity supplies to Jersey were matched by foolish and ridiculous actions from the UK in deploying Royal Navy vessels to observe what turned to be a rather limited ‘blockade’ of St Helier by French (and some Jersey) trawlers. For all the furore, the drama is already fading but it or similar rows have plenty of potential to flare up again.
At one level, all this is (just) yet another Brexit mess, and a reminder of how Brexit has thrown a rock which produces waves and ripples which are now showing up in small and large ways. Interestingly, despite the political rhetoric, as the participation of some of them in the blockade shows, Jersey fishermen are highly sympathetic to their French colleagues, recognizing that they’ve all been caught up in this mess. It also bears saying that as long ago as March 2017 the House of Lords EU Committee warned the government of the dangers Brexit posed for the Channel Islands. But my point here is that this episode illustrates the consequences of a free-for-all between ‘sovereign equals’.
Lugano Convention
This week’s third lesson in the realities of sovereignty, just announced though long-trailed, comes with European Commission’s recommendation that the EU should not accept Britain’s application to re-join the Lugano Convention on cross-border enforcement of legal judgments. Technically, membership is not confined to EU or even single market members, but the Commission’s view is that the UK’s relationship with the single market is now so distant that it should not be re-admitted to the convention. Inevitably this is described by Brexiters as ‘punishment’ but it’s actually no different in kind to the Norwegian fishing non-agreement: other powers have the right to decide not to agree to what the UK wants, and they will sometimes, even often, exercise that right. The eventual outcome will depend on whether the - yes - sovereign member states of the EU decide to follow the Commission’s recommendation.
It doesn’t even matter if, as some may think, the European Commission or Norway or France are miscalculating their interests: that is their prerogative. In fact, much of the Brexiters’ case was based on claims about what was and was not in the EU’s interests. Hence all the stuff about the UK trade deficit, German carmakers and so on. As a matter of fact, these claims were proved wrong – as many of us knew they would be – and the EU prioritised the integrity of the single market. Again, it’s irrelevant to argue that the EU ‘should have’ made a different calculation of its interests. Brexiters have to face the world as it is, not as they imagine it ought to be.
A permanent negotiation
This basic fact is not going to go away. What Britain now faces – not temporarily, but for the foreseeable future – is an ongoing process of negotiating with the EU and others, constantly facing choices about what it will sacrifice in the name of sovereignty, and constantly facing the reality that others have powers, rights and choices which they will exercise as they see fit. That is true both in general but also in relation to specific aspects of the TCA (Jersey fishing permits being a minor example) where there are phased implementations.
Currently, that means primarily the negotiations over the Northern Ireland Protocol (NIP). Several reports this week suggested that the EU is offering some flexibility in its implementation but within the basic parameters of the agreement, and proposing UK alignment with EU Sanitary and Phyto-Sanitary (SPS) rules. This, at a stroke, would remove many of the Irish Sea border checks. So far, the UK government still regards this as incompatible with sovereignty even though, at least for the time being, it doesn’t actually propose to diverge significantly from EU SPS standards.
The issue is, rather, that alignment means ‘dynamic alignment’ (i.e. when the EU rules change, the UK’s are bound to do so) and it’s this which would supposedly violate sovereignty. It therefore becomes a theological argument about whether the UK’s SPS standards are the same as the EU’s because they are agreed to be aligned or because they just happen to be the same at the moment. It’s true that the UK might want (or have) to change SPS as part of a future trade deal, especially with the US. But since, as has been emphasised this week by US Secretary of State Anthony Blinken, that is at best some way off, it is very hard to see why a temporary alignment with the EU could not be agreed.
After all, the UK government would be happy with, and is currently seeking, an ‘equivalence’ agreement (in other words, an agreement in which, whilst standards might not be the same in each market, they are deemed good enough for both). But that doesn’t work from an EU point of view, primarily because it involves a high-trust relationship with a third country that has not shown itself to be very trustworthy during the Brexit process, and about which there are lingering memories of the BSE epidemic as well as one with a shortage of Official Veterinarians (which also a problem for the current arrangements). Additionally, the volume of trade with the UK is much greater (and differently configured) than that of those third countries (such as New Zealand, which is the model usually touted) with which the EU does have SPS equivalence agreements.
And, again, if the UK were to decide, perhaps because of a trade agreement with the US, to substantially change its SPS rules then an equivalence agreement with the EU would presumably go out of the window anyway. Plus I think (I’m not sure – this is a horribly complex topic) that if EU SPS rules changed significantly then any equivalence agreement would have to be renegotiated anyway, so the practical distinction, on sovereignty grounds, between ‘dynamic alignment’ and ‘equivalence’ seems a fuzzy one. (For an excellent explainer of the concepts of dynamic alignment, equivalence and trade agreements in the context of Brexit, see trade expert Dmitry Grozoubinski’s ExplainTrade briefing).
In practical terms, then, dynamic alignment would mean the UK automatically changing the rules (or exiting the agreement) when EU rules changed whilst equivalence would mean re-negotiating (or exiting) the agreement. To any normal person this surely seems like some mediaeval debate about how many angels can dance on the head of a pin. It’s perfectly possible, and there’s just the tiniest sign of it, that what will be created is something which in substance is dynamic alignment but which the UK will call equivalence.
No coherent strategy
To re-iterate, whilst negotiating the operation of the NIP is the biggest immediate issue, the underlying one is that the UK-EU relationship is going to be the subject of a never-ending negotiation, and all the time the UK is going to have to make decisions about what to prioritise: the Brexiters’ peculiar version of sovereignty, or economic and political reality. That is inevitable simply because, like every other country in the world, but more so because of economic and geographic connection, the UK faces the reality of EU regulatory superpower deriving from market size.
It doesn’t seem that there is any coherent strategy for, or even understanding of, this from the UK government. For example, having made an issue of not recognizing the diplomatic status of the EU Ambassador to the UK, the government has this week agreed to do so. That’s the right decision, but by not making it from the beginning the UK squandered good will by posturing – for nothing. This is, precisely, a sign of an absent or incoherent strategy. The same will be true if, after marching up the hill of unilaterally breaking the NIP, the government quietly marches back down and accepts SPS alignment. If so, again it would be the right decision but reached via a foolish route.
Moreover, our relations with the EU cannot be separated from those with other countries for at least two reasons. On the one hand, the UK needs the EU’s support – political, diplomatic, and economic - in its antagonistic relationships with, especially, Russia, Iran and China. In this respect the recent ‘Global Britain’ Integrated Review was inadequate (see section five of link), since it barely touches on the UK-EU relationship despite it being a pivotal one. Though here, too, there are tiny signs of a more realistic approach quietly emerging.
On the other hand, the UK’s primary ally, the US, is deeply concerned with UK-EU relations in general, and the security and political situation of Northern Ireland in particular. This week saw the first face-to-face meeting between Dominic Raab and Anthony Blinken and though couched in diplomatic terms the message was clear: not only will the US not countenance anything that violates the Good Friday Agreement (translation: ‘Brexiters wanting to rip up the NIP, beware’) but it wants “political and economic stability in Northern Ireland” (translation: ‘make the NIP work’).
Irresponsibility or cynicism?
In the face of these realities, the question is how far the UK government is willing to push the Brexiters’ idea of sovereignty. The answer hinges on whether the government is irresponsible or cynical (most likely it will be ‘both’, but it needs to be ‘neither’).
If it is irresponsible then it will push on with the naive sovereignty agenda, making absurd provocations such as that of the EU Ambassador and silly gestures with Royal Navy ships, trashing its relations with the EU and the US by flouting international law, indifferent to the economic and political damage, and indifferent to the security situation in Northern Ireland. It may well do that if there’s no domestic political price to be paid or, indeed, a political benefit as a result.
If it is cynical, it will quietly yield on what to most people are arcane technicalities about, say, SPS whilst bigging up false claims about what Brexit has achieved. This would rely upon Brexiter MPs and commentators being gullible and ignorant, but that’s not a completely outlandish expectation. We’ve already seen this approach deployed with misleading or simply untrue claims about Brexit and vaccines, about freeports, and, most recently and perhaps most ludicrously, about Brexit enabling Britain to resist the aborted football super-league plans.
The UK-India ‘trade deal’
It is also evident in overblown claims about the UK’s post-Brexit trade deals. This was on display again this week when Liz Truss asserted that Brexit had allowed the UK to do a ‘trade deal’ with India. In fact, for the most part, it was a commercial deal of the sort that UK could, and did, make whilst an EU member, just as EU members like Germany have. It’s true that it also contained a Memorandum of Understanding (which may, though it’s by no means certain, eventually lead to a Free Trade Agreement with India), and that couldn’t have been done as an EU member. But the overall claim was misleading although, inevitably, jumped on by those Brexiters who don’t understand that the term ‘trade deal’ is an imprecise one, and not necessarily the same as a Free Trade Agreement, as a vindication of Brexit. In any case, the actual economic benefits of any eventual trade agreement probably won’t be very large, certainly compared with the loss of trade caused by exiting the single market.
These points about trade policy are boringly unoriginal, having been made endlessly in one form or another by many people, including me, for years. But they still matter, because the ongoing false claims about trade deals root back to the basic issues with which I began this post. That is, they pretend that ‘regaining’ sovereignty was not just cost-free but economically beneficial. So it is important to say that some of the claimed benefits did not require this ‘sovereignty’ whilst, overall, the costs are much higher than any benefits which may derive from it.
Moreover, it is important to confront the persistent slipperiness of Brexiters in the way that when challenged about the economic costs they very often resort to saying ‘you don’t understand, it wasn’t about the money it was about regaining our freedom, which is priceless’. But not only was that not how Brexit was sold in 2016, it is also not what is being said about the benefits of an independent trade policy. If Brexiters want to justify themselves in economic terms, then they can’t use ‘priceless’ sovereignty to escape a proper accounting.
But ‘we are where we are’?
I understand the view that ‘we are where we are’ and so there’s no point harking back to the false promises that were made. But I don’t accept it. For one thing, it is galling to hear so many Brexiters now wheeling out as arguments against Scottish independence precisely those they dismissed when made by remainers against leaving the EU. More importantly, the promises made in 2016 are not part of some remote past. Rather, they are only now, since the end of the transition period, actually playing out in terms of practical consequences. That is less than five months ago. So these are not dead issues and one way we know that is, indeed, because the Brexiters are still at such pains to churn out false claims to justify what they have done.
So if there is to be a ‘moving on’ and an acceptance that ‘we are where we are’ that has to start with an honest acknowledgment from the Brexiters – meaning, principally, the government – of where exactly it is that we are. And that means, even assuming that they may have done it in good faith (which requires considerable charity), acknowledging that this particular form of sovereignty they have created presents very serious problems.
If they are to be addressed, or at least ameliorated, it will require a patient diplomacy and a realistic recognition of the powers that other countries, and the EU, have and of Britain’s relatively (not, of course, entirely) limited power. In short, it requires the opposite of both the ‘cynical’ and the ‘irresponsible’ responses we currently see. I’ve mentioned in this post a couple of tiny signs this might happen, but I’m not holding my breath.
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Nevertheless, for Brexiters, and perhaps many leave voters, it had a meaning, which had two, related but different, aspects. One was that a country should and could decide ‘for itself’ what rules to follow. The other, more blatantly nationalistic, was that this country, in particular could and would get ‘more for itself’ on its own than it could within the EU because, as Vote Leave insisted (see slide 10 of link), “Great Britain is a great country” with the fifth largest economy, G7 membership, a permanent seat on the UN Security Council, and significant intelligence and military capability.
Sovereignty in practice: latest news
What we are now seeing in abundance are the realities and limitations of those ideas of sovereignty, even within their own terms. It was already plain in the Trade and Cooperation Agreement (TCA) which reflects the way that the UK prioritised sovereignty over anything else. Thus what resulted was, in effect, a tariff-free deal for domestically produced goods and very little more. All of the currently emerging costs to industries and consumers flow from that, including the extensiveness of the checks needed to comply with the Northern Ireland Protocol (i.e. because a ‘deeper’ TCA would have meant a correspondingly ‘thinner’ Irish Sea border).
Norway non-agreement
The most obvious new example is the failure to reach a fishing deal with Norway, with potentially devastating effects on British cod fishing. Before, the UK benefitted from the agreements made between the EU and Norway, which is not part of the Common Fisheries Policy (CFP). Now, it must strike its own deal with Norway but has not been able to. This is an interesting development because, unlike negotiations with the EU, it is not presented in terms of Britain being ‘punished’ for Brexit or as a failure by Norway to recognize Britain as a ‘sovereign equal’. So a lot of the standard Brexiters’ rhetorical smokescreen is stripped away and the reality emerges: UK sovereignty is circumscribed by that of other countries, even quite small countries can and will resist the UK’s demands, and they are more able to do so now that it is not an EU member.
Jersey row
Fishing is also central to this week’s drama over the permits that, because of Brexit and in line with the fishing chapter of the TCA, French fishermen now need to fish in Jersey’s waters (it has arisen now because, until the end of April, there was an ‘amnesty’ under which the pre-Brexit arrangements continued). It’s a highly complicated story as all fishing stories are, but particularly so because of the distinctive constitutional status of the Channel Islands. Thus it is not actually about CFP, but it is about Brexit because the TCA superseded the Granville Bay Agreement, dating back to the nineteenth century but last amended in 2000, which had governed fishing rights in these waters. Scrapping it as part of Brexit was strongly lobbied for by the Jersey Fishermen’s Association during the TCA negotiations. Separately, the UK also chose to leave the 1964 London Fisheries Convention (causing problems for fishing around Guernsey, Alderney and Sark which have been more quietly dealt with by agreeing an extension of the interim arrangements with the EU).
Brexiters see ‘taking back control of our waters’ and being ‘an independent coastal nation’ as emblematic of regaining sovereignty. But the inevitable consequence is to encounter the sovereignty of other countries. For this was not, as some Brexiters are inevitably spinning it, a row with the EU but with France, although the EU is ‘siding’ with France in saying the permits are not being issued as the TCA says they should be (£) (the UK government disputes this – I do not know who is correct, but there are now talks underway).
This carries two lessons. First, that the EU will tend to stand up for its members against third countries, which is one of the ways sovereignty is magnified by membership. Second, it underscores that EU membership does not end national sovereignty. Nor is it necessary to leave the EU to engage in nationalistic posturing to appeal to nativist voters. Hence, with elections in both countries in prospect, foolish and ridiculous words from French politicians threatening to cut off electricity supplies to Jersey were matched by foolish and ridiculous actions from the UK in deploying Royal Navy vessels to observe what turned to be a rather limited ‘blockade’ of St Helier by French (and some Jersey) trawlers. For all the furore, the drama is already fading but it or similar rows have plenty of potential to flare up again.
At one level, all this is (just) yet another Brexit mess, and a reminder of how Brexit has thrown a rock which produces waves and ripples which are now showing up in small and large ways. Interestingly, despite the political rhetoric, as the participation of some of them in the blockade shows, Jersey fishermen are highly sympathetic to their French colleagues, recognizing that they’ve all been caught up in this mess. It also bears saying that as long ago as March 2017 the House of Lords EU Committee warned the government of the dangers Brexit posed for the Channel Islands. But my point here is that this episode illustrates the consequences of a free-for-all between ‘sovereign equals’.
Lugano Convention
This week’s third lesson in the realities of sovereignty, just announced though long-trailed, comes with European Commission’s recommendation that the EU should not accept Britain’s application to re-join the Lugano Convention on cross-border enforcement of legal judgments. Technically, membership is not confined to EU or even single market members, but the Commission’s view is that the UK’s relationship with the single market is now so distant that it should not be re-admitted to the convention. Inevitably this is described by Brexiters as ‘punishment’ but it’s actually no different in kind to the Norwegian fishing non-agreement: other powers have the right to decide not to agree to what the UK wants, and they will sometimes, even often, exercise that right. The eventual outcome will depend on whether the - yes - sovereign member states of the EU decide to follow the Commission’s recommendation.
It doesn’t even matter if, as some may think, the European Commission or Norway or France are miscalculating their interests: that is their prerogative. In fact, much of the Brexiters’ case was based on claims about what was and was not in the EU’s interests. Hence all the stuff about the UK trade deficit, German carmakers and so on. As a matter of fact, these claims were proved wrong – as many of us knew they would be – and the EU prioritised the integrity of the single market. Again, it’s irrelevant to argue that the EU ‘should have’ made a different calculation of its interests. Brexiters have to face the world as it is, not as they imagine it ought to be.
A permanent negotiation
This basic fact is not going to go away. What Britain now faces – not temporarily, but for the foreseeable future – is an ongoing process of negotiating with the EU and others, constantly facing choices about what it will sacrifice in the name of sovereignty, and constantly facing the reality that others have powers, rights and choices which they will exercise as they see fit. That is true both in general but also in relation to specific aspects of the TCA (Jersey fishing permits being a minor example) where there are phased implementations.
Currently, that means primarily the negotiations over the Northern Ireland Protocol (NIP). Several reports this week suggested that the EU is offering some flexibility in its implementation but within the basic parameters of the agreement, and proposing UK alignment with EU Sanitary and Phyto-Sanitary (SPS) rules. This, at a stroke, would remove many of the Irish Sea border checks. So far, the UK government still regards this as incompatible with sovereignty even though, at least for the time being, it doesn’t actually propose to diverge significantly from EU SPS standards.
The issue is, rather, that alignment means ‘dynamic alignment’ (i.e. when the EU rules change, the UK’s are bound to do so) and it’s this which would supposedly violate sovereignty. It therefore becomes a theological argument about whether the UK’s SPS standards are the same as the EU’s because they are agreed to be aligned or because they just happen to be the same at the moment. It’s true that the UK might want (or have) to change SPS as part of a future trade deal, especially with the US. But since, as has been emphasised this week by US Secretary of State Anthony Blinken, that is at best some way off, it is very hard to see why a temporary alignment with the EU could not be agreed.
After all, the UK government would be happy with, and is currently seeking, an ‘equivalence’ agreement (in other words, an agreement in which, whilst standards might not be the same in each market, they are deemed good enough for both). But that doesn’t work from an EU point of view, primarily because it involves a high-trust relationship with a third country that has not shown itself to be very trustworthy during the Brexit process, and about which there are lingering memories of the BSE epidemic as well as one with a shortage of Official Veterinarians (which also a problem for the current arrangements). Additionally, the volume of trade with the UK is much greater (and differently configured) than that of those third countries (such as New Zealand, which is the model usually touted) with which the EU does have SPS equivalence agreements.
And, again, if the UK were to decide, perhaps because of a trade agreement with the US, to substantially change its SPS rules then an equivalence agreement with the EU would presumably go out of the window anyway. Plus I think (I’m not sure – this is a horribly complex topic) that if EU SPS rules changed significantly then any equivalence agreement would have to be renegotiated anyway, so the practical distinction, on sovereignty grounds, between ‘dynamic alignment’ and ‘equivalence’ seems a fuzzy one. (For an excellent explainer of the concepts of dynamic alignment, equivalence and trade agreements in the context of Brexit, see trade expert Dmitry Grozoubinski’s ExplainTrade briefing).
In practical terms, then, dynamic alignment would mean the UK automatically changing the rules (or exiting the agreement) when EU rules changed whilst equivalence would mean re-negotiating (or exiting) the agreement. To any normal person this surely seems like some mediaeval debate about how many angels can dance on the head of a pin. It’s perfectly possible, and there’s just the tiniest sign of it, that what will be created is something which in substance is dynamic alignment but which the UK will call equivalence.
No coherent strategy
To re-iterate, whilst negotiating the operation of the NIP is the biggest immediate issue, the underlying one is that the UK-EU relationship is going to be the subject of a never-ending negotiation, and all the time the UK is going to have to make decisions about what to prioritise: the Brexiters’ peculiar version of sovereignty, or economic and political reality. That is inevitable simply because, like every other country in the world, but more so because of economic and geographic connection, the UK faces the reality of EU regulatory superpower deriving from market size.
It doesn’t seem that there is any coherent strategy for, or even understanding of, this from the UK government. For example, having made an issue of not recognizing the diplomatic status of the EU Ambassador to the UK, the government has this week agreed to do so. That’s the right decision, but by not making it from the beginning the UK squandered good will by posturing – for nothing. This is, precisely, a sign of an absent or incoherent strategy. The same will be true if, after marching up the hill of unilaterally breaking the NIP, the government quietly marches back down and accepts SPS alignment. If so, again it would be the right decision but reached via a foolish route.
Moreover, our relations with the EU cannot be separated from those with other countries for at least two reasons. On the one hand, the UK needs the EU’s support – political, diplomatic, and economic - in its antagonistic relationships with, especially, Russia, Iran and China. In this respect the recent ‘Global Britain’ Integrated Review was inadequate (see section five of link), since it barely touches on the UK-EU relationship despite it being a pivotal one. Though here, too, there are tiny signs of a more realistic approach quietly emerging.
On the other hand, the UK’s primary ally, the US, is deeply concerned with UK-EU relations in general, and the security and political situation of Northern Ireland in particular. This week saw the first face-to-face meeting between Dominic Raab and Anthony Blinken and though couched in diplomatic terms the message was clear: not only will the US not countenance anything that violates the Good Friday Agreement (translation: ‘Brexiters wanting to rip up the NIP, beware’) but it wants “political and economic stability in Northern Ireland” (translation: ‘make the NIP work’).
Irresponsibility or cynicism?
In the face of these realities, the question is how far the UK government is willing to push the Brexiters’ idea of sovereignty. The answer hinges on whether the government is irresponsible or cynical (most likely it will be ‘both’, but it needs to be ‘neither’).
If it is irresponsible then it will push on with the naive sovereignty agenda, making absurd provocations such as that of the EU Ambassador and silly gestures with Royal Navy ships, trashing its relations with the EU and the US by flouting international law, indifferent to the economic and political damage, and indifferent to the security situation in Northern Ireland. It may well do that if there’s no domestic political price to be paid or, indeed, a political benefit as a result.
If it is cynical, it will quietly yield on what to most people are arcane technicalities about, say, SPS whilst bigging up false claims about what Brexit has achieved. This would rely upon Brexiter MPs and commentators being gullible and ignorant, but that’s not a completely outlandish expectation. We’ve already seen this approach deployed with misleading or simply untrue claims about Brexit and vaccines, about freeports, and, most recently and perhaps most ludicrously, about Brexit enabling Britain to resist the aborted football super-league plans.
The UK-India ‘trade deal’
It is also evident in overblown claims about the UK’s post-Brexit trade deals. This was on display again this week when Liz Truss asserted that Brexit had allowed the UK to do a ‘trade deal’ with India. In fact, for the most part, it was a commercial deal of the sort that UK could, and did, make whilst an EU member, just as EU members like Germany have. It’s true that it also contained a Memorandum of Understanding (which may, though it’s by no means certain, eventually lead to a Free Trade Agreement with India), and that couldn’t have been done as an EU member. But the overall claim was misleading although, inevitably, jumped on by those Brexiters who don’t understand that the term ‘trade deal’ is an imprecise one, and not necessarily the same as a Free Trade Agreement, as a vindication of Brexit. In any case, the actual economic benefits of any eventual trade agreement probably won’t be very large, certainly compared with the loss of trade caused by exiting the single market.
These points about trade policy are boringly unoriginal, having been made endlessly in one form or another by many people, including me, for years. But they still matter, because the ongoing false claims about trade deals root back to the basic issues with which I began this post. That is, they pretend that ‘regaining’ sovereignty was not just cost-free but economically beneficial. So it is important to say that some of the claimed benefits did not require this ‘sovereignty’ whilst, overall, the costs are much higher than any benefits which may derive from it.
Moreover, it is important to confront the persistent slipperiness of Brexiters in the way that when challenged about the economic costs they very often resort to saying ‘you don’t understand, it wasn’t about the money it was about regaining our freedom, which is priceless’. But not only was that not how Brexit was sold in 2016, it is also not what is being said about the benefits of an independent trade policy. If Brexiters want to justify themselves in economic terms, then they can’t use ‘priceless’ sovereignty to escape a proper accounting.
But ‘we are where we are’?
I understand the view that ‘we are where we are’ and so there’s no point harking back to the false promises that were made. But I don’t accept it. For one thing, it is galling to hear so many Brexiters now wheeling out as arguments against Scottish independence precisely those they dismissed when made by remainers against leaving the EU. More importantly, the promises made in 2016 are not part of some remote past. Rather, they are only now, since the end of the transition period, actually playing out in terms of practical consequences. That is less than five months ago. So these are not dead issues and one way we know that is, indeed, because the Brexiters are still at such pains to churn out false claims to justify what they have done.
So if there is to be a ‘moving on’ and an acceptance that ‘we are where we are’ that has to start with an honest acknowledgment from the Brexiters – meaning, principally, the government – of where exactly it is that we are. And that means, even assuming that they may have done it in good faith (which requires considerable charity), acknowledging that this particular form of sovereignty they have created presents very serious problems.
If they are to be addressed, or at least ameliorated, it will require a patient diplomacy and a realistic recognition of the powers that other countries, and the EU, have and of Britain’s relatively (not, of course, entirely) limited power. In short, it requires the opposite of both the ‘cynical’ and the ‘irresponsible’ responses we currently see. I’ve mentioned in this post a couple of tiny signs this might happen, but I’m not holding my breath.
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My book Brexit Unfolded. How no one got what they wanted (and why they were never going to) will be published by Biteback in June 2021. It can be pre-ordered from Biteback, or via other online platforms, as a paperback or e-book.
Sunday, 2 April 2017
Lessons from Gibraltar
The response
in the UK to the EU
Council’s draft negotiation guidelines has been instructive. Most attention
has been focussed on the
paragraph (22) relating to Gibraltar, to the effect that no UK-EU Brexit
agreement will apply there without the agreement of Spain*. This gives Spain a
powerful voice in the Brexit negotiations and calls into question the
sovereignty of this disputed territory, as well as indicating that the EU is
likely to side with Spain in that dispute. Gibraltar, which voted overwhelmingly
to stay in the EU (and, in a previous referendum, to stay in the UK) is significant
not least for being the only part of the UK other than Northern Ireland to have
what on Brexit will be a land border with the EU. (Readers of the blog will
have been alerted to this facet of Brexit, as I
pointed it out in my post in last October; for a detailed briefing on the
quite complex issues relating to Gibraltar and Brexit see
this report by Joe Carberry and Jonathan Lis).
The first instructive point is that, although it was certainly not a major issue during the referendum, the dangers of Brexit for Gibraltar were pointed out by the Remain campaign. In May 2016 the then Foreign Secretary Philip Hammond said:
“I genuinely believe that the threat of leaving the European Union is as big a threat to Gibraltar's future security and Gibraltar's future sovereignty as the more traditional threats that we routinely talk about.”
The reaction from Brexiters was furious. Liam Fox, now the International Trade Secretary, was enraged that the possibility should even have been mentioned, saying “I think there are limits to what you can and cannot say in any campaign that goes way beyond acceptable limits” (sic). All this was reported in the Daily Express under the inevitable headline about ‘Project Fear’.
We can now see that Hammond’s concern was well-founded, and that it was perfectly legitimate to raise it. The same, of course, can be said of most of what was dismissed as project fear, as I pointed out in my post on the triggering of Article 50.
Moreover, and this is the second instructive point, whilst Brexiters may have shouted it down during the campaign they cannot do so now. As the slogans and false claims meet reality, reality wins out. The EU have, as a matter of fact, decided to take this line and now it has to be dealt with. No amount of bluster or outrage can change that. Screaming headlines in the British press are not just ineffective against the EU but, even, harden feeling against the UK. So this is, in microcosm, indicative of the entire shift that has occurred as a result of the triggering of Article 50. As I wrote in my most recent post, Brexiters now have to take responsibility for the consequences of their decision.
The EU’s stance on Gibraltar is a lesson in realpolitik. Of course both the EU and individual member states such as Spain are going to seek to pursue their own interests. On the Gibraltar issue, the UK did exactly the same thing at the time of Spain’s accession to the EU in 1986 (insisting on an open border). Brexiters can, and do, decry this as ‘bullying’ and even, in their hermetically sealed logic, as ‘proving’ that it is right to leave. But that doesn’t change anything: welcome to the real world of international relations (to which irresponsible and ludicrous implications by Brexiters of possible military action contribute nothing good).
In fact, although attracting less headlines, the EU Council’s statement in several other ways underscored the reality of the power plays which will now unfold. In particular, the UK’s desire, expressed in the Article 50 letter, for parallel talks on exit and on future trade has been rebuffed. The latter will only occur once the EU deems that sufficient progress has been made on the former, although that is a softer position than insisting on the complete conclusion of exit talks before future talks. Similarly, the Brexiter fantasy of sector-by-sector access to the single market was emphatically squashed, as was the possibility of bi-lateral negotiations between the UK and individual EU-27 states.
None of this, however, makes the EU’s stance ‘punitive’, as this piece by Vincenzo Scarpetto of Open Europe explains, and it should be understood in the context of a negotiation as discussed in this excellent analysis by Peter Ungphakhorn. It just means that the UK cannot dictate terms in a vacuum as Brexiters imagine. Moreover, completely undiscussed as far as I am aware, section five of the statement makes it very clear that whilst the UK remains in the EU it must “remain loyal to the Union’s interests”, something which I suspect in the months to come will become a matter of some significance.
There is another lesson from Gibraltar row. Brexiters always seem to think that dealing with the EU means, primarily, dealing with Germany and to a lesser extent France. But although these are indeed very significant, the EU is an association of member states and is not ruled from Berlin. The failure of Brexiters to understand this grows out of their narrative of how the UK lost sovereignty from EU membership whereas, in fact, the EU was an arena in which the UK (in particular, one might argue) could exercise and magnify its sovereignty. At all events, the coming negotiations will show that each country within the EU-27 will have some degree of influence.
Spain will be especially relevant not just because of Gibraltar but also because of the large numbers of British residents there and because of their stance towards Scottish independence, something, not coincidental to the Gibraltar row one assumes, revised just today. Ireland, for obvious reasons, will also be highly influential, but each member will to some extent have the opportunity to pursue its own agenda within the negotiations. All of the compromises and trade-offs that Brexiters bemoan about EU membership will not cease, but now the UK will face them alone across the negotiating table rather than as a powerful member, with powerful allies, within the EU. In a similar way, having for years mocked the EU Parliament as a ‘rubber stamp’, Brexiters now face the prospect that any exit deal will be subject to the approval of that body which is drafting its own red lines on what is acceptable.
We are going to have years, now, of Brexiter outrage at having to deal with the inevitable consequences of their policy, as if these were not both predictable and, in fact, predicted. Like a toddler’s tantrum, “it’s not fair” will be the repeated refrain when the world proves not to be amenable to their wishes. And this tantrum will not just be about the EU. Brexiters are excited by the possibility of regaining ‘our seat on the WTO’ but whether or not Brexit means ‘trading on WTO terms’ that is going to bring many more encounters with a reality that does not fit with Brexiter fantasies. An early indication of that came last week with a question from Indonesia to the WTO Agriculture Committee about post-Brexit trade issues. The US, Russia, China and Argentina have all “registered an interest” in this matter, which has potentially far-reaching implications for British agriculture. That may seem an arcane matter, but it shows how post-Brexit Britain will have to navigate a whole new world of complexities which will be as much, or more, political than economic. In this sense, too, the furore over Gibraltar is an instructive pointer to what the future holds.
The first instructive point is that, although it was certainly not a major issue during the referendum, the dangers of Brexit for Gibraltar were pointed out by the Remain campaign. In May 2016 the then Foreign Secretary Philip Hammond said:
“I genuinely believe that the threat of leaving the European Union is as big a threat to Gibraltar's future security and Gibraltar's future sovereignty as the more traditional threats that we routinely talk about.”
The reaction from Brexiters was furious. Liam Fox, now the International Trade Secretary, was enraged that the possibility should even have been mentioned, saying “I think there are limits to what you can and cannot say in any campaign that goes way beyond acceptable limits” (sic). All this was reported in the Daily Express under the inevitable headline about ‘Project Fear’.
We can now see that Hammond’s concern was well-founded, and that it was perfectly legitimate to raise it. The same, of course, can be said of most of what was dismissed as project fear, as I pointed out in my post on the triggering of Article 50.
Moreover, and this is the second instructive point, whilst Brexiters may have shouted it down during the campaign they cannot do so now. As the slogans and false claims meet reality, reality wins out. The EU have, as a matter of fact, decided to take this line and now it has to be dealt with. No amount of bluster or outrage can change that. Screaming headlines in the British press are not just ineffective against the EU but, even, harden feeling against the UK. So this is, in microcosm, indicative of the entire shift that has occurred as a result of the triggering of Article 50. As I wrote in my most recent post, Brexiters now have to take responsibility for the consequences of their decision.
The EU’s stance on Gibraltar is a lesson in realpolitik. Of course both the EU and individual member states such as Spain are going to seek to pursue their own interests. On the Gibraltar issue, the UK did exactly the same thing at the time of Spain’s accession to the EU in 1986 (insisting on an open border). Brexiters can, and do, decry this as ‘bullying’ and even, in their hermetically sealed logic, as ‘proving’ that it is right to leave. But that doesn’t change anything: welcome to the real world of international relations (to which irresponsible and ludicrous implications by Brexiters of possible military action contribute nothing good).
In fact, although attracting less headlines, the EU Council’s statement in several other ways underscored the reality of the power plays which will now unfold. In particular, the UK’s desire, expressed in the Article 50 letter, for parallel talks on exit and on future trade has been rebuffed. The latter will only occur once the EU deems that sufficient progress has been made on the former, although that is a softer position than insisting on the complete conclusion of exit talks before future talks. Similarly, the Brexiter fantasy of sector-by-sector access to the single market was emphatically squashed, as was the possibility of bi-lateral negotiations between the UK and individual EU-27 states.
None of this, however, makes the EU’s stance ‘punitive’, as this piece by Vincenzo Scarpetto of Open Europe explains, and it should be understood in the context of a negotiation as discussed in this excellent analysis by Peter Ungphakhorn. It just means that the UK cannot dictate terms in a vacuum as Brexiters imagine. Moreover, completely undiscussed as far as I am aware, section five of the statement makes it very clear that whilst the UK remains in the EU it must “remain loyal to the Union’s interests”, something which I suspect in the months to come will become a matter of some significance.
There is another lesson from Gibraltar row. Brexiters always seem to think that dealing with the EU means, primarily, dealing with Germany and to a lesser extent France. But although these are indeed very significant, the EU is an association of member states and is not ruled from Berlin. The failure of Brexiters to understand this grows out of their narrative of how the UK lost sovereignty from EU membership whereas, in fact, the EU was an arena in which the UK (in particular, one might argue) could exercise and magnify its sovereignty. At all events, the coming negotiations will show that each country within the EU-27 will have some degree of influence.
Spain will be especially relevant not just because of Gibraltar but also because of the large numbers of British residents there and because of their stance towards Scottish independence, something, not coincidental to the Gibraltar row one assumes, revised just today. Ireland, for obvious reasons, will also be highly influential, but each member will to some extent have the opportunity to pursue its own agenda within the negotiations. All of the compromises and trade-offs that Brexiters bemoan about EU membership will not cease, but now the UK will face them alone across the negotiating table rather than as a powerful member, with powerful allies, within the EU. In a similar way, having for years mocked the EU Parliament as a ‘rubber stamp’, Brexiters now face the prospect that any exit deal will be subject to the approval of that body which is drafting its own red lines on what is acceptable.
We are going to have years, now, of Brexiter outrage at having to deal with the inevitable consequences of their policy, as if these were not both predictable and, in fact, predicted. Like a toddler’s tantrum, “it’s not fair” will be the repeated refrain when the world proves not to be amenable to their wishes. And this tantrum will not just be about the EU. Brexiters are excited by the possibility of regaining ‘our seat on the WTO’ but whether or not Brexit means ‘trading on WTO terms’ that is going to bring many more encounters with a reality that does not fit with Brexiter fantasies. An early indication of that came last week with a question from Indonesia to the WTO Agriculture Committee about post-Brexit trade issues. The US, Russia, China and Argentina have all “registered an interest” in this matter, which has potentially far-reaching implications for British agriculture. That may seem an arcane matter, but it shows how post-Brexit Britain will have to navigate a whole new world of complexities which will be as much, or more, political than economic. In this sense, too, the furore over Gibraltar is an instructive pointer to what the future holds.
*Note: there is some
complexity in decoding what this means. The Sky News political editor Faisal
Islam in a
series of tweets today has raised the suggestion that its true meaning
relates to any future trade deal under A218, rather than to A50 negotiations.
This seems consistent with the wording of paragraph 22 of the Council
guidelines which speaks of ‘after the UK leaves’ but is also puzzling (to me)
in that A218 deals require unanimity anyway, so Spain would have had a veto
already. No doubt more clarity will emerge, but at all events the explicit
reference to Gibraltar in the guidelines is significant.
Update (4 April 2017): A comment below made me ask myself what the implications for Brexit are for the Channel Islands, something I don't recall having seen discussed. A quick search found this recent report: http://www.itv.com/news/channel/2017-03-23/brexit-to-have-significant-impact-on-channel-islands/
Update (4 April 2017): A comment below made me ask myself what the implications for Brexit are for the Channel Islands, something I don't recall having seen discussed. A quick search found this recent report: http://www.itv.com/news/channel/2017-03-23/brexit-to-have-significant-impact-on-channel-islands/
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