04 December 2018

The Attorney General confirmed what was obvious from the Withdrawal Agreement: there is no unilateral exit from the Irish backstop. All the possible exit routes all have problems, says Jill Rutter.

In his Commons statement, the Attorney General Geoffrey Cox said what the Prime Minister admitted at the Liaison Committee last week: there is no “unilateral withdrawal clause” with regards to the Irish backstop. That means if the Prime Minister’s Brexit deal is accepted, the UK will face a choice in July 2020 of exiting the backstop or extending the transition period.  

The Government insists any backstop, if it were needed, would only be temporary – which implies it sees a negotiable exit route. That is not so obvious.

There are four possible ways of negotiating an exit from the backstop:

Exit route 1: Chequers

The Government hopes to exit the backstop through a UK-wide trade deal with the EU. The Chequers plan was carefully crafted to meet the requirements to remove the backstop: continued regulatory alignment with only those EU rules on goods that give rise to border checks, a “common rulebook”, and a “Facilitated Customs Arrangement” to remove customs checks by allowing the UK border to also be the border of the EU customs territory. 

The only problem with the Chequers plan as a solution to the Irish border is that the EU rejected it. The EU disliked the segmentation of the Single Market between goods and services and hated the Facilitated Customs Arrangement.

Even the PM has admitted that she still had to convince some in the EU to buy her proposal. Although at the Exiting the EU Committee, chief official negotiator Olly Robbins insisted that a lot of Chequers lives on in the political declaration on the future UK-EU relationship. 

Exit route 2: “facilitative arrangements” and technology

The political declaration on the framework for the future UK-EU relationship holds out an olive branch of the potential for “facilitative arrangements and technologies” to help reduce customs frictions. 

The ERG put forward an approach that would use a range of customs simplifications, currently used (but not at the scale or intensity envisaged) to avoid a hard border. Indeed, such an approach would likely have to be combined with a large number of exemptions for small traders, which was what the Government envisaged in its initial Maximum Facilitation proposal last year.

The EU would have to accept that these systems offer a secure customs border. But the problem is that customs is not the only border process. The EU also uses border checks to protect the regulatory standards of the Single Market and imposes particularly onerous checks on animal and food exports (which constitute a high proportion of cross-border trade).   

And although a way may be found to avoid checks at the border and associated infrastructure, the Northern Ireland protocol in the Withdrawal Agreement recalls the stronger commitment in last year’s joint report: not just to avoid border checks but to avoid any new checks. For this to be a way out of the backstop, the EU would have to be prepared to move.

Exit route 3: Leave Northern Ireland behind

The EU does not believe that the Government is serious about the constitutional difficulties of the EU’s original proposal for the backstop. That proposal would have left Northern Ireland in the EU customs territory and subject to some Single Market rules for goods leaving a hard border in the Irish Sea. 

If the UK wanted to pursue a Canada-style deal – and an independent trade policy – but for Great Britain, not Northern Ireland, it could propose reverting to the EU’s preferred solution.  While some in Northern Ireland might welcome this as a best, rather than worst, of all worlds solutions (a point made by the Irish Ambassador here last month), it raises problems about how Northern Ireland would influence EU decision making, as well as requiring the hated east-west checks and customs processes.

More importantly, the DUP has made clear that it will not accept this now, or in the future, and the SNP would demand similar treatment for Scotland.

Exit route 4: Norway+ customs union

The Chequers plan attempted to reverse-engineer the minimum requirements in a trade deal to avoid a hard border. But the EU may insist that the only way to do this on an all-UK basis is through long-term membership of the Single Market (like Norway) and through a permanent customs union. 

That would remove the risk of a hard border, but it would breach the Government’s red line on freedom of movement and ability to run an independent trade policy.

If all those routes are unavailable, there is one that does not need agreement.

Exit route 5: The nuclear option

The UK could in future decide to abrogate the Withdrawal Agreement entirely and breach international law.

This would have significant consequences for the UK’s reputation with international trading partners, while the practical implications for the UK-EU relationship would be similar to an acrimonious ‘no deal’. That means uncertainty for UK citizens in the EU and EU citizens in the UK, major uncertainty with regards to the Irish border and loss of any preferential trade access covered in the backstop.

The final judgement on the exit from the backstop will fall to the institutions created to oversee the Withdrawal Agreement – the Joint Committee and potentially to the dispute resolution tribunal.

Olly Robbins may be right that the EU will find the current incarnation of the backstop “uncomfortable”, and that may make it more willing down the line to reconsider something more like Chequers on regulation and a mix of technology, facilitation agreements and exemptions for Irish small traders to fix customs. But none of these options look negotiable, let alone implementable, during the agreed 21-month transition.

Ministers need to accept that there is no clear, negotiable route out of the backstop, without one side moving significantly from its current position. 

Comments

Its time to take ownership of this sorry cause - I've heard this lady on the TV and to say her glass is half empty is an understatement. All those MP's who have voted Remain (in the EU) are doing and have done their damndest to stop Brexit. This lady included. Now is the time to look at this and sort it. Nothing is impossible. Those who can see the invisible can achieve the impossible.

Overall, the UK imports more than it exports meaning that it runs a trade deficit. A deficit of £138 billion on trade in goods was partially offset by a surplus of £107 billion on trade in services in 2018. The overall trade deficit was £31 billion in 2018.

United Kingdom's Top Trading Partners
United States: US$64.4 billion (13.3% of total UK exports)
Germany: $47 billion (9.7%)
Netherlands: $33.3 billion (6.9%)
France: $31.8 billion (6.6%)
Ireland: $28.3 billion (5.9%)
China: $27.5 billion (5.7%)
Switzerland: $25.4 billion (5.2%)
Belgium: $19.1 billion (4%)

So you all reading this can see these European friends of ours (who by the way your grandfathers and their fathers fought two world wars to save them and us) need us far more now than we potentially need them. Of course the ideal solution is business as business without the membership card. Could we do that? Have a think, it would be the greatest deal ever. Those EU countries above would not lose out on their valuable exports, we would not lose out on selling our exports - a staus quo an equilibrium on fair trading.

Trucks and vans and cars go over the Irish border hourly, they do it now and we have a membership card (expiring 31/10/19) Eire are a member, could Eire step in and allow Northern Ireland a sort of piggy back/associate membership just so as to enable free movement of these vehicles. It cant be Rocket Science people can it?

Only 5 per cent of Northern Ireland’s GDP goes to Ireland, and only 1.6 per cent of Irish exports go to Northern Ireland.

Exports to the Republic of Ireland made up 33% of Northern Ireland’s goods exports in 2016—but only about 1.5% of the Republic’s goods exports went to the North that year. This trade was worth over £4 billion. Around 100 large Northern Irish companies made deliveries across the border that year (about 11% of all deliveries going from Northern Ireland to Ireland).

This is how the total looks:
Exports to :
Great Britain = £10.5 billion
Rep of Ireland = £2.7 billion
Rest of Europe = £1.9 billion
Rest of World = £3.7 billion

Why does the border matter?
Both the UK and Ireland are in the EU, and within the EU goods and services can cross borders without undergoing any customs checks.

I read that the current situation is underpinned by our membership of the EU customs union and single market. It is the government’s position that we will leave both of these after Brexit. If this happens, it is stated checks on goods will be needed in some form. Poppycock! Cannot ingenious minds just allow this small traffic to continue - maybe introduce a clause within Eire' s membership?

We will be a force to be reckoned with, do not believe for one minute we cannot be, look at the trade deficit, look at the opportunity, cease it with both hands and your beautiful minds - we can do this people - we can do this.

Namaste - believe