Do or die? The October European Council

negotiations

Even given the ups and downs of an extraordinary three years, the last few days and have been noteworthy for the different, frequently contradictory, signals coming out of Brussels, London, and Belfast.

Despite the apparent wish on both sides of the Channel to reach an agreement that would allow for the UK’s orderly withdrawal from the EU, it was still unclear late on the eve of Thursday’s summit whether a deal could be reached.

As ever throughout the process, the unbridgeable differences appeared ultimately to lie not between the EU and the UK, but within the UK.

The feeling in Brussels is that we have been here before.

High hopes

After a summer of uncertainty and concerns that no deal was increasingly likely, expectations that an agreement was possibly strengthened considerably over the last week.

This new optimism was prompted by a sense that the Johnson government was indeed serious in its attempts to negotiate a deal, and was not simply going through the motions before declaring that the talks had broken down due to the EU’s obduracy.

The first signs, in the late summer, were a preparedness on the part of the Johnson government to address the Irish backstop.

This was partly motivated by the new government’s discontent with the deal struck by its predecessor: keeping the whole of the UK in a customs union after Brexit would prevent it from making buccaneering trade deals across the globe (which had, in turn, been a key part of the rationale for leaving).

Theresa May had wanted a Northern Ireland-only customs union, and had agreed a text to this effect in February 2018, but the DUP had vetoed this position on the grounds that it would lead to a differential treatment from the rest of the UK.

The Johnson government’s wish to return to a Northern Ireland-only backstop was not unwelcome to the EU.

Not only was this the arrangement to which it had already agreed, but the whole-UK solution would be cumbersome, costly, and difficult to manage.

Indeed, the EU had only agreed to the whole-UK option to save May’s majority in the wake of the DUP’s veto of the Northern Ireland-only option.

The Northern Ireland-only arrangement posed its own problems, however, notably how the Irish border could at the same time remain open according to the terms of the Good Friday Agreement, and function as an external border of the EU.

The Johnson government initially proposed technological solutions – the so-called ‘alternative arrangements’ favoured by hard Brexiters, but already been rejected as infeasible by the EU when first proposed by the May government.

The Johnson government then came back with a proposal for two borders, which again would not provide a level of certainty acceptable to the EU, and finally a solution which would place the border in the Irish Sea, about which the DUP were known to have reservations.

Although a Northern Ireland-only proposal considerably narrowed the differences between UK and EU, two new demands of the Johnson government complicated negotiations.

The first was London’s insistence that Northern Ireland should have the opportunity to decide whether or not it wanted to remain part of an EU customs union, which to the EU would undermine the backstop’s function as insurance for observing the Good Friday Agreement.

The second was the UK’s rejection of a level playing field: the aim of regulatory divergence increased the importance for the EU of assuring the integrity of its external border whether on the island of Ireland or in the Irish Sea.

Towards an agreement

Reports from Brussels earlier this week suggested that important progress had been made and that an agreement was possible.

However, there would not be sufficient time for copies of any legal text to be transmitted to the national capitals of the EU27 for scrutiny by government lawyers, and therefore for the heads of government to discuss at their meeting on Thursday.

Indications from various reports late on Wednesday evening were that the various points had been agreed.

Northern Ireland will be part of the UK’s customs territory but follow EU customs rules; there will be some exemptions for goods under criteria agreed by a joint committee; and a rebate mechanism will be included which must comply to EU state aid rules.

The provisions of the earlier deal relating to citizens’ rights, the UK’s financial commitments, and the transition period remain unchanged.

Finally, on consent, the agreement will refer to a mechanism, which according to RTE’s Tony Connelly, will work in the following way: after four years, Stormont will decide by simple majority whether to maintain the arrangements for four more years.

If vote is affirmative, after four more years there would be another vote, this time to see if this has cross-community support.

If not, there would be a two-year cooling off period; and if Stormont is not in a position to vote, the arrangements stay.

With respect to the Political Declaration, which is not a legally-binding text, the UK has asked for a specific reference to a future relationship based on a free trade agreement with zero quotas and tariffs, but with no references to a customs union.

The EU has underlined that guarantees concerning a level playing field will need to be strong, due to the UK’s geographical proximity to the EU, and that this will require appropriate mechanisms to oversee fair competition.

The concern in the national capitals is that the UK will become a low-cost, deregulated competitor on the EU’s doorstep – and this concern will naturally shape the terms on which access for UK businesses to the single market is granted.

What happens now?

The European Council meets today, as a 27 (that is, without representation from the UK).

It will discuss the state of the negotiations, but will not be able to adopt a text.

In the meantime, negotiations will continue and if progress is sufficient, a full European Council could be convened at the end of the month.

Discussion of an extension to the deadline of 31 October has not been prominent.

The main test, however, will be domestic: whether the government can muster a parliamentary majority in support of the agreement.

The government is in a minority, so will need to find support from other parties.

The DUP has already expressed strong reservations, and it is unclear whether it can be won over by Number 10’s promises to make substantial investment in Northern Ireland.

Most of the Labour Party will vote against, although an unknown number of its MPs are likely to defy the whip and support the government.

It is also unclear how the 21 Conservative MPs who had the party whip removed in September will vote.

By Hussein Kassim, senior fellow at The UK in a Changing Europe and Professor of Politics at the University of East Anglia

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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