Can Brexit Take Place Without Either Major Trade Disruption, or Serious Dilution of the EU Legal Order?

BY JOHN BRUTON

Brexit is a British decision.

It means that Britain is seeking to withdraw from a contract it made with the other EU members, on the basis of which those countries opened their markets to British business, in a way it was not opened to other countries. That was the deal. In business, if one unilaterally withdraws from a contract, one does not normally expect to continue to enjoy all the benefits of the contract, afterwards.  One expects to have to make good some of the losses incurred by the other party. But that is not how British public opinion sees Brexit. It IS how it is seen by the 27 partners of the UK in the EU.

This difference in perspective is at the root of the difficulties in the present negotiation.

The EU has developed, and maintained, an integrated Single Market for business because it has a single unified system for making, interpreting and enforcing a single set of rules. The Single Market is deepening all the time and new fields of business are being made the subject of common rules, thereby opening new markets. This will not stop when the UK leaves. Common rules are what keeps the EU together. They derive from the EU Treaties, which is like a written constitution. It is difficult to amend. The UK, in contrast, has no written constitution, and there is no similar constraint on the UK Parliament.

So UK often looks at problems purely politically, while the EU has first to look at them legally. This causes misunderstandings. UK Ministers sometimes think that a political understanding with France and Germany will be enough to overcome its problems with the Commission, but that is not the way the EU works. France and Germany, and the Commission, are all subject to a common set of rules. This rule based system protects smaller countries and has been the secret of the EU’s success.

The recent Chequers decision by the UK Cabinet says the UK will keep to the  common EU rules for goods, but goes on to say that the “UK Parliament would still have a lock on incorporating these rules in the UK legal order by not passing the relevant legislation”. This is giving with one hand, and taking away with the other. So, even if the UK and EU standards were the same at the outset, they could diverge substantially, depending on the vagaries of British politics. Ultimately the UK Parliament can do what it likes. The UK will not be part of the EU legal order. This builds uncertainty into the proposed arrangement, and is bad for business. This let out clause means that border controls might not be there at the outset, but might have to be reintroduced.

This is a critical issue for Ireland, where the reintroduction of border controls on the 300 mile boundary would be both provocative and impractical. That is why the EU wants the Northern Ireland issue agreed before the UK leaves the EU. The UK wants to take back control, but EU needs to have control too.  This point is not always understood in London. The EU is 27 countries, and all their Parliaments will have accepted any eventual trade deal with the UK. This makes the sort of” flexibility”, the UK says it would like, difficult to obtain. Getting unanimous agreement of all EU Parliaments to a future EU trade deal with the UK will not be easy. That was illustrated by the difficulties in ratifying recent Agreements with Ukraine and Canada, when extraneous domestic issues were used in Belgium and the Netherlands to delay ratification.

If the Commission wants a deal with the UK that will pass in all 27 Parliaments, it will have to exercise great care.

Patience will be required. Sound bites will not always be a help. But before we even get down to detail on trade, there will have to be a Withdrawal Agreement. 80% of the text of the Withdrawal Agreement is already agreed, but 20% remains to be settled. Among the issues that are not settled is the “backstop” to prevent a hard border in Ireland. Here the EU has put forward the proposal that “Northern Ireland remains in a common regulatory area for goods and customs with the rest of the EU”.

It has said it is ready to improve the text of this proposal, if the UK has suggestions to make. But such suggestions need to be within the parameters of what the EU has proposed. This is difficult for the UK for various technical and political reasons, not least because England and Wales, but not Northern Ireland, voted in the Referendum to leave the EU’s common regulatory area.

Opinion on this in the UK is changing, but only very slowly. The implications of a hard Brexit are only now being contemplated by most of the people who voted Leave in 2016. In 2016, these people saw Brexit as an emotional assertion of national identity, rather than as a concrete proposal that would change their lives and livelihoods irrevocably.

I believe UK public opinion needs more time to consider if Brexit is really the best way to express their national identity, and more time to fix some of the inequities in British society that prompted people to vote Leave in 2016. That why I have argued, in an earlier column in this paper, that the period of negotiation under Article 50 should be extended. This could happen if the UK asked for it, but asking for it would require both immense courage on the part of the UK government, and a constructive response from the UK opposition. It is hard to see evidence of either yet, but they could emerge if there is a crisis.

Compliments of John Bruton’s blog –