A closer look at the withdrawal agreement and its political implications

There seems to be little possibility of the Commons approving the withdrawal agreement on 11 December. It is, however, still worth taking a closer look at the Agreement, as it will frame the political debate over the next fortnight and possibly beyond if a second vote is proposed.

The text we currently have is significantly different from the one drawn up in March 2018. It still provides for a transition period immediately following Brexit, which we now know could be extended up to the end of 2022. During the transition, EU law will operate in the UK much as it does now.

The Agreement also has a ‘backstop’ designed to avoid controls on the border between Ireland and Northern Ireland when the transition comes to an end and if, as seems likely, there is no UK-EU free trade agreement at that point.

What is different from the March 2018 version is the content of the backstop, which now provides for the whole of the UK to be in a ‘single customs territory’ with the EU.

This version of the backstop aligns the UK as a whole more closely to the EU’s regulatory and customs model than had been previously suggested. This has a number of consequences. In particular, if the UK had to apply the EU’s common commercial policy, it would not be in a position to conclude conflicting trade arrangements with third countries on goods.

At the same time, the ‘single customs territory’ would not guarantee frictionless trade.

It would obviate the need for certain checks, for example on rules of origin governing goods entering from third countries, but goods exported from the UK to the EU would have to be checked for compliance with EU law on matters such as plant and animal safety (’sanitary and phytosanitary standards’) and product specifications (’technical barriers to trade’).

To avoid that outcome for Northern Ireland, goods produced there would have to comply with a range of EU laws set out in the withdrawal agreement.

Goods entering Northern Ireland from Great Britain would also have to observe these EU standards and be checked for compliance with them. There would be no similar constraints on goods moving to Great Britain from Northern Ireland.

The backstop is only a default which will not apply if or when a UK-EU trade agreement is finalised. However, the EU is likely to insist that any lasting trade agreement replicates those parts of the backstop deemed essential for avoiding Irish border controls.

To that extent, the backstop will be the template for UK-EU trade relations for some time to come.

But this is the result not of the Agreement as such, but of the UK’s weak bargaining position vis-à-vis the EU. Once Article 50 was triggered, the UK handed an effective veto on the negotiation outcome to the Irish government, which it proceeded to exercise.

This miscalculation on the part of the UK government inevitably shapes all outcomes from Brexit.

In the days following its publication, the withdrawal agreement received near universal condemnation from the Westminster-based political class and commentariat. But this was in reality a condemnation of Brexit itself.

There is no other deal that could have been negotiated once the May government set out its ‘red line’ on freedom of movement, thereby ruling out the EEA option. Parliament was handed the chance to stop this version of Brexit by the Miller judgment, but chose instead to authorise the Article 50 notice through primary legislation.

Voting down the Agreement on 11 December will not produce a better Brexit deal: the EU has said it won’t offer one and its position on this is credible. Either there will be no deal at all, or no Brexit.

MPs supporting no deal will need to explain how they will avoid a public emergency involving food shortages, power cuts and interruption to vital medical supplies.

Those supporting Remain will need to show that they can stop Brexit in time. If the ECJ follows the opinion of the Advocate General in the Wightman case, a unilateral rescission will be effective under EU law, as long as it complies with the UK’s constitutional requirements.

It is not clear whether this would necessitate primary legislation, but some sort of Parliamentary authorisation would be required. If the Court holds against the petitioners in Wightman, the EU Council’s agreement will be needed for the rescission to be effective.

Its unanimous agreement will in any event be required for any extension to the 29 March deadline.

This set of scenarios will hopefully concentrate minds in the coming days and weeks. If it is true, as often suggested, that there is a majority in the Commons for rejecting the no-deal option, this may translate into a reluctant endorsement of the Agreement, if it proves impractical to stop Brexit in time.

What also makes this outcome plausible is that the Agreement, precisely because it is a default, rules little out. A Conservative government seeking a more complete Brexit would have the chance to negotiate one.

Decoupling the UK from the single customs territory would make it possible for independent trade deals with third countries on goods to be agreed. The EU would probably insist on some kind of regulatory alignment for Northern Ireland but how far this extended to the rest of the UK would be an open question.

If, on the other hand, a Labour government took office with the aim of implementing its current policy of a permanent customs union with the EU, it could negotiate with this objective in mind, and probably find a receptive response from the EU.

It would find it hard to get round the commitment in the withdrawal agreement to observe the rules on state aid on a continuing basis, but it’s not obvious that these are any real impediment to its economic policies.

Consider, finally, how a future government elected with a policy of building a more constructive long-term relationship with the EU might be placed.

The overriding merit of the withdrawal agreement is to have made it clear even, hopefully, in Westminster (the devolved administrations were under no illusions), that there is no such thing as a good Brexit. Perhaps reversing it will become government policy sooner than we think.

The self-evident downside of accepting the withdrawal agreement as it stands for Remainers is that while it avoids no deal, it does deliver Brexit.

Some of Brexit’s negative effects could be mitigated by the UK opting into EU regulations on sanitary and phytosanitary standards and technical barriers to trade, a point acknowledged in Annex 3 of the Protocol and paragraph 28 of the Political Declaration.

Only full re-entry, however, would restore the frictionless trade and other economic benefits which the UK currently enjoys, as well as enabling it to resume its place in the European and world order.

The old derogations on Schengen and the Eurozone would no longer apply. But this shouldn’t trouble believers in a European Britain.

By Simon F. Deakin, professor of Law at the University of Cambridge.

Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.

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