#Brexit : Despite Trump, has May learnt the Art of the Deal?

| July 13, 2018

As the Brexit negotiations finally get serious, Owain Glyndwr looks at some of the sticking points and possible compromises. Although it would have been helpful if the British Government had worked out before triggering Article 50 what future relationship it wanted between the UK and the EU, it was not the disastrous delay of more than a year that caused anger at Westminster when the long-waited policy document finally appeared.

MPs did not complain about 15 lost months but were outraged by a 15 minute wait for copies of the White Paper The Future Relationship between the United Kingdom and the European Union. They did not have it in their hands when the new Brexit Secretary, Dominic Raab, began to speak.

In desperation, he said that MPs could view it on his department’s website. It was an idea scornfully dismissed by people who still have Acts of Parliament written on vellum made from animal skin. Mr Raab could not have been less popular if he had proposed measuring road distances in kilometres instead of miles.

The centrepiece of the document, a ‘facilitated customs arrangement’ that would allow the UK to leave the Customs Union without creating the need for border checks, was received with little enthusiasm. It would deploy new technology so cutting edge that it might not even have been invented yet. Mr Raab received little backing for any of his ideas. The closest he got to support from his own side was talk of swallowing pride and having to accept a ‘half-loaf Brexit’.

The grumpy acquiescence of a majority of MPs is both the most the British Government can hope for and the least it needs. It must try to combine enough complaining Tory Brexiteers with Conservative and Labour EU-enthusiasts, who aren’t prepared to risk crashing out with no deal.

Dominic Raab and Theresa May can expect no help from David Davis and Boris Johnson, who resigned as ministers in protest at the proposals imposed by the Prime Minister on her cabinet during an all-day meeting held at her country retreat, Chequers.

Such comfort as she was given came from unexpected quarters. The proposal to accept the single market’s rules for manufactured goods and food products was described by the Brexiteer Conservative MEP Daniel Hannan, as ‘very close to the line’, by which he meant just about acceptable.

‘I’m a bit more relaxed than some Eurosceptics around alignment on goods. Most of these rules are set at global level, rather than European level, and the idea of Britain basing its economic recovery on some different specification of washing machine is silly’, he said.

Even the members of the European Parliament’s Brexit Steering Group, chaired by Guy Verhofstadt, welcomed the proposal for a UK-EU Association Agreement, if only because that’s what they had been calling for throughout the 15 month wait for the British Government to make its proposals. But they said that outsourcing EU customs competences could not be part of any agreement.

So the idea of a ‘facilitated customs arrangement’ has not worked its magic in Brussels, although –or rather because- it’s widely seen as a case of British magical thinking. However, the White Paper refers only to its ‘phased introduction’, implicitly acknowledging that the UK will have to stay in a de facto customs union with the EU for an extended period –and guarantee not to end it if that risked creating a hard border in Ireland.

All of which might explain why the Irish Taoiseach, Leo Varadkar, said that the EU should be willing to compromise as well. ‘If the UK is able to relax from some of its red lines, then the European Union should be flexible too. I think perhaps we are now entering into that space’, he said.

Although the political importance to Ireland of ensuring an open border with Northern Ireland cannot be overstated, it is worth remembering that Ireland has a strong economic interest in keeping open the United Kingdom’s maritime borders with the European Union as well. Great Britain is Ireland’s biggest export market, as well as being the so called ‘land bridge’, the cheapest and fastest route between Ireland and continental Europe.

The backstop of a border in the Irish Sea, making Northern Ireland the only part of the UK still in the Customs Union, is not the ideal solution for the Republic, any more than for the unionists in the North. Nevertheless, it would be a mistake to assume that it won’t happen.

Theresa May could soon face defeat at Westminster on legislation paving the way for future free trade deals. The most furious Brexiteer MPs have been emboldened by Donald Trump. The American President has claimed that the Chequers proposals will kill any chance of a UK-USA trade deals. His remarks might have been undiplomatic but that doesn’t make them wrong.

Agricultural exports would be an important part of any trade deal for the Americans but could not happen if the UK is still following EU rules that ban chlorinated chicken, hormone-treated beef and genetically modified crops. In any event, the UK Government knows that it must have a solution for Ireland if the EU rejects its current proposals.

The Democratic Unionist Party in Northern Ireland has strong roots in the province’s farming community and knows the importance of keeping agriculture on the all-Ireland basis agreed as part of the peace process. If that means checks on lorries on board ferries across the Irish Sea, the DUP might just live with it.

In the rest of the UK, farming is of minor economic importance. Cheaper food prices, as a result of imports from the rest of the world, would be a Brexit dividend for voters. The farmers would protest, probably loudly enough to feed a narrative in most European countries that Brexit was a painful experience that no other EU member state would want to copy.

That might give the Commission and Council, perhaps even the Parliament, enough political cover to reach a customs and single market access agreement with the UK on manufactured goods. It would be linked to a deal on workers’ mobility -not quite freedom of movement of people but possibly close enough. The devil will of course be in the detail but that is also where a solution might be found.

 

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