The UK government published its plan to replace the Irish backstop on 2 October.
It has proposed new arrangements that would see Northern Ireland remain aligned to EU single market rules for goods, but UK rules for customs for at least four years subject to Stormont approval.
The UK is trying to trap the EU in a binary choice. There will be checks in Ireland in both the deal and no deal scenarios.
The former would include the benefits of the Withdrawal Agreement, including citizens’ rights protection and the financial settlement. The latter would also see checks but with much more disruptive effects.
From an EU perspective, the UK government’s proposals are problematic in two main respects.
The proposals ask the EU to take steps that could undermine the core principle of the indivisibility of the four freedoms. They would also undermine the democratic role of the EU institutions.
While the proposals are more likely to receive the support of a majority of MPs, they show a lack of understanding of the EU’s interests. This is likely to be a continuing barrier during any future relationship negotiations.
Proposals require changes to EU law
The UK’s proposal would necessitate a change to EU law to stop the entry into the single market of products prohibited or restricted by EU rules.
The proposal claims that the application of the Union Customs Code (UCC), the law which implements the EU’s customs union, is ‘not an appropriate approach under the amended Protocol, as Northern Ireland will be in the UK customs territory’.
The UK also requests that goods movements between Ireland and Northern Ireland should not require entry or exit summary declarations as provided for by the UCC.
It also argues that some small traders should be exempted from customs processes and from paying duty. These traders make up the majority of cross-border transactions.
The UK is asking the EU to change the way it polices the frontiers of the single market.
The UCC only allows for exemptions in the form of customs prohibitions and restrictions that member states may impose as justified on the grounds of, inter alia, public policy or public security.
It does not provide for exemptions whereby these prohibitions and restrictions can be waived.
When customs exemptions have been created in the past through separate secondary legislation, they have been strictly time-limited and subject to oversight by the EU institutions.
The creation of customs exemptions on the Irish-UK frontier for at least four years and subject to devolved Northern Irish approval would therefore be unprecedented.
This could incentivise other member states to pursue similar derogations.
What the UK may perceive as exceptional measures specific to the Irish situation could mean a wider threat to the principles of the single market for the EU.
These exemptions would require the creation or revision of EU law. The European Council has no authority nor legitimacy to provide for such amendment outside of the prescribed treaty procedures.
This betrays a lack of understanding from the UK that the customs union is an exclusive competence of the EU and the internal market is a shared competence with the member states.
These rules cannot be determined through last-minute backroom deals, but must be subject to the democratic procedures outlined in the treaties.
These procedures require a legislative change which would normally take months to go through the relevant stages of the EU’s law-making process. This could be carried out during the transition period.
But then there would be no legally binding guarantee for the UK government before it agrees to a revised Withdrawal Agreement that such exemptions will be operative.
On the other hand, it would be extremely difficult to amend the law and provide this guarantee before exit day on 31 October.
Even if it were possible, there would not be time for effective scrutiny by the EU institutions.
Taking the EU institutions out of the game
One option to overcome these constraints would be for the EU27 to use international law to pre-commit themselves to create the exemption.
This could be achieved through Declarations to initiate legislation within the Protocol to the Withdrawal Agreement.
This form was used with regard to social security legislation in David Cameron’s pre-referendum renegotiation of UK membership.
However, the resort to international law to make legislative commitments would pose serious legitimacy problems for the EU.
The European Council is a closed intergovernmental forum. There would be no transparency nor scrutiny.
When the EU institutions do come to exercise their roles in revision of the EU treaties or legislation, the member states will have bound them through the prior international law agreement.
The results of the match will have been pre-determined before the players enter the pitch.
This would be a restriction on the democratic role of the Council and the European Parliament in service of the interests of a departing member state.
The European Parliament Brexit steering committee has already stated that the new proposals ‘breach a range of fundamental principles and red lines’ passed in resolutions of the European Parliament, and that they could leave the EU with a ‘significant hole in its Single Market’.
The consent of the European Parliament is necessary for a Withdrawal Agreement to be approved.
A potentially dangerous precedent?
The UK’s requests for exemptions from the Union Customs Code asks the EU to prioritise the sovereignty claims of a departing state over the expression of the shared sovereignty of the remaining member states contained in legal text.
This could set a dangerous precedent which other Member States may seek to use to the detriment of the four freedoms for individuals.
The question for the EU27 is whether the sacrifices to the integrity of the EU legal order are justified by the existential threat posed by a no deal Brexit and the realpolitik incentives presented by the UK offer.