02 August 2019

The prime minister is looking for a way to dump the backstop and avoid a no-deal Brexit. He could opt for a ‘standstill agreement’ – but even that presents big problems for both the UK and the EU, writes Georgina Wright.

David Frost, the UK’s new EU sherpa and lead Brexit negotiator, met with EU officials in Brussels yesterday. His message was clear: Prime Minister Johnson intends to take the UK out of the EU on 31 October, preferably with a deal. But if the EU refuses to drop the Northern Irish backstop then the UK may have no other choice but to leave with no deal.

One way to avoid both the backstop and a no-deal exit would be to agree an indefinite ‘standstill agreement’, where the UK would be outside of the EU but continue to be part of the single market and customs union until the future long-term relationship between the UK and EU is agreed. The backstop would disappear as it would be rendered nugatory by the eventual long-term relationship. The UK would continue to contribute to the EU budget and, presumably, citizens’ rights would be guaranteed by both sides.

But if the EU is to accept such a deal, it will want to retain some form of oversight to ensure the UK respects and enforces single market rules. The easiest way to do this would be for the UK to temporarily join the EU’s customs union and European Economic Area (EEA), or make use of its institutions.

Temporarily joining the EEA would be the easiest route to securing a backstop-free deal

To do this, though, the UK would need the consent of all EEA countries (both EU and non-EU) – almost certainly at the cost of accepting freedom of movement and observing all the rules of the single market until a new agreement is in place. The UK would also need to strike separate arrangements for areas not covered by the EEA, for example on security and fishing.

The EEA route would be the EU’s preferred approach for two reasons. First, EU leaders have repeatedly rejected UK requests for a single market ‘a la carte’, where UK businesses receive all the benefits without being subjected to the same obligations or enforcement. It rejected this when Theresa May asked for it – and would almost certainly reject it if Johnson were to follow suit.  

Second, the EU has to meet wider international obligations too. Some countries who have trade deals with the EU, such as South Korea and Japan, would like greater access to the single market. The EU has not conceded on the grounds that it cannot verify that these standards are being respected and enforced abroad, as it can for EU and EEA countries. Concede it for the UK and it likely that the EU would have to concede for others.

The UK could use EEA institutions without formally being part of the EEA architecture

Joining the EEA may not be politically palatable to all in the UK, especially if it is framed as being little more than another form of ‘EU vassalage’. But MPs might be more open to the UK making use of EEA institutions without formally joining it.

This is known as ‘docking into’ the European Free Trade Association (EFTA) Court – the judicial body that interprets EEA rules and deals with disputes over their application in the EFTA states – and the EFTA Surveillance Authority, which makes sure EU standards are being enforced. This would guarantee some level of independent oversight, while avoid trapping the UK into another institutional framework.

But this looks a lot like the ‘Common Market 2.0’ idea supported by the likes of Nick Boles and Oliver Letwin; it is hard to see how it squares with the approach to Brexit being taken by Johnson’s government.

Both the UK and EU27 would need to think carefully about how to ‘sell’ a standstill agreement

The challenge for the UK government will be to convince MPs that there is a way out of such an agreement. After all, the backstop was intended to apply “unless and until” alternative arrangements, which both sides agree on, can replace it. If the UK is not able to leave this “standstill” until the border is resolved then some might think there is still a risk that the UK could be trapped indefinitely. This would mean continued adherence to EU rules and tariffs and, crucially, would remove the UK’s ability to have its own independent trade policy (as trade agreement could only come into force after the UK has left). Strict rules around process, timing and an end point of this standstill could help.

Of these, the end point might prove most complex. The UK government under Theresa May argued that the Irish border needed to be dealt with as part of the long-term relationship. But that was not good enough for the Republic of Ireland, who in 2017 demanded there be an insurance policy: the backstop. The big question for the EU is how this standstill ends if the promised UK–EU free-trade agreement – without a hard border in Northern Ireland – fails to materialise.

If the Republic was not prepared to trust a May government, it is unlikely it will put any more faith in that of her successor. Plus, there is not much political mileage for EU leaders in being seen to blink in the face of Johnson’s intransigence. If Boris Johnson manages to convince his own Parliament that a standstill agreement is worthwhile, his next challenge will be to convince the EU27 that it would benefit them too.

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