Proceed to Phase Two. All systems go for Brexit?

Sylvia de Mars, Aoife O’Donoghue, Colin Murray and Ben Warwick. Contact: aoife.o’[email protected].

The UK Government has exuded palpable relief at finally clearing the hurdles of phase one of the negotiations, covering the financial settlement, citizenship and Northern Ireland.

In keeping with the notion that ‘nothing is agreed until everything is agreed’, the UK Government have sought to talk up the progress that has been made without dwelling on the details. The published Joint Report is, in many places, opaquely worded.

This space for constructive ambiguity is important, as specific details will only emerge as further issues relating to the UK’s future relationship with the EU are tackled in the next phases of the talks.

It also allows Theresa May to keep her parliamentary majority from fragmenting, at least for the time being. Conservative MPs and their DUP allies maintain a wide spectrum of positions on Brexit.

The shape of the Phase One agreement nonetheless tells us much about the final shape of Brexit.

As part of an ongoing project on the impact of Brexit on Northern Ireland we have published our immediate reaction to the Phase One agreement in the form of an annotated commentary upon the Report.

Three key issues are central to understanding how this Report changes the dynamic of Brexit insofar as it impacts on Northern Ireland: they are, first, the categorisation of individuals, second, the difference between EU rights and freedoms, and third, the role of consent in any change to the status of Northern Ireland.

The Report spins a complex web of people categories. Northern Ireland is given special status that guarantees much access to EU rights and freedoms, even if the conditions necessary to assure such access are not always spelled out.

Irish Passport holders resident in Northern Ireland will have the best access, followed by UK passport holders entitled to Irish passports. UK passport holders resident in Northern Ireland who are not entitled to Irish passports (for instance if they are born in Britain without a connection to Ireland) will enjoy a more limited set of rights.

The most significant rights differentiation concerns EU nationals resident before Brexit, who will have far more rights (stemming from EU law and guaranteed by the Withdrawal Agreement) than EU nationals who become resident in Northern Ireland after Brexit.

From an administrative perspective, these distinctions will require considerable effort to untangle an individual’s status, and the rights they enjoy as a consequence. For a population of 1.8 million, that is a tremendous amount of variation in legal and right-bearing status.

Even though the distinctive operation of EU rights in Northern Ireland will be incorporated through a range of mechanisms, access to those mechanisms will be varied. Those entitled to EU citizenship will be able to exercise free movement of services while remaining resident in Northern Ireland: because their EU ‘citizenship rights’ remain protected, they will be entitled to go to any EU Member State and provide a service there.

Similarly, Northern Ireland nationals residing in Northern Ireland continue to have the right to ‘establish’ (for instance, setting up a company) in any other Member State.  However, such retained rights do not come with EU-wide reciprocation, and that has consequences for those wishing to do business in or with Northern Ireland.

A German national resident in the EU27 will no longer have the right to provide services to Northern Ireland, or to establish a business in Northern Ireland.  Any company established in Northern Ireland, in fact, will fall outside the scope of EU law under the terms set out in the Joint Report.

This limits the extent to which Northern Ireland-established business can freely operate across the remainder of the EU… with the exception of Ireland, presumably, as the freedom for Irish nationals to provide services to, reside in, and set up business in Norther Ireland are guaranteed by the Ireland Act 1947 and the Common Travel Area rules rather than exclusively by EU law.

The long-term enforcement of retained EU rights in Northern Ireland, whether held by EU nationals who were resident on the withdrawal date and never left, or held by Irish nationals who, when resident in Northern Ireland, will always have EU citizenship status, remains to be negotiated; all we know about this so far is that UK courts will have a further 8 years post Brexit to refer questions on how EU citizens’ rights work to the CJEU.

The Good Friday/Belfast Agreement’s requirement of consent is also built into the Report. This recognises that the EU provided the context in which the Good Friday/Belfast Agreement was negotiated, but also that any change to the status of Northern Ireland – for instance, if it were to choose to become an autonomous customs territory along the lines of Hong Kong and Macao – must have the consent of the Northern Ireland Assembly and Executive.

This means that the events of the past fortnight, where the DUP found itself in extensive discussions with London over the wording of this Report and the status of Northern Ireland, cannot be replicated.

Representatives of both major Communities must be involved in any future decisions which will affect the exercise of powers devolved to Northern Ireland, thereby providing an additional impetus to restarting power sharing.

That said, the main thrust of the Joint Report seems to be that if Northern Ireland’s politicians do not collectively agree to act separately from the remainder of the United Kingdom in post-Brexit trade arrangements, this outcome is foreclosed.

The provisions in the Report which aim to avoid the creation of a hard border make clear that in the ideal situation, the UK-EU negotiations will find a solution for a future relationship that avoids a hard border.

However, as has been reported frequently, the ‘solutions’ currently proposed by the UK have been met with scepticism if not scorn by the EU and Ireland – a pure ‘technological’ solution to the border simply does not seem possible.

Indeed, the Joint Report suggests that technological solutions would only be acceptable to both the EU and the UK if they involve no physical infrastructure at the border whatsoever.

Cameras may cut down on the physical patrols, but it is difficult to see how they can be installed without any ‘infrastructure’.

Should technology fail to save the day (and should imaginative solutions turn out to be imaginary ones), the UK promises to instead attempt to arrange a special solution for the island of Ireland – which seems to imply the type of ‘special status’ that Sinn Fein have been advocating for.

We struggle to imagine how anything short of an arrangement that treats the ‘island of Ireland’ as a single free trade and customs area would successfully avoid a hard border.

Given DUP opposition to ‘special status’ for Northern Ireland, it seems that this provision is included in the Joint Report as a possibility which will only manifest if the confidence and supply agreement between the DUP and the Conservative party somehow ends.

As neither Option A (“magical technology”) nor Option B (“special status”) seem to genuinely be in the cards at this time, the true guarantee of interest in the Joint Report is the ‘if all else fails’ failsafe agreed between the EU and the UK.

This is something they describe as the UK as a whole guaranteeing ‘full alignment’ with the relevant parts of the Single Market and the Customs Union to ‘North-South cooperation, the all-island economy, and the protection of the [Good Friday] Agreement’.

There has been a lot of discussion about just what ‘alignment’ here means since rumours of the agreement started surfacing on Monday; and, more interestingly, what extent of EU law would be covered by this promise of ‘alignment’ is also open to debate.

We would suggest that ‘full alignment’ cannot be read as divergent regulation achieving similar goals, but rather implies identical regulation in the necessary fields; and that those necessary fields cover at least the full scope of the Single Market rules on trade in goods (including energy) and trade in agriculture, as well the creation of a ‘customs union’ between the UK and the EU.

Any ‘full alignment’ short of this would not actually obviate the need for a border.

Therefore, if nothing else works, the UK has promised to both keep not only Northern Ireland but the entire UK compliant with a significant extent of internal market law, and to conclude a customs agreement with the EU no matter how the rest of the negotiations pan out.

The Joint Report suggests in a ‘failsafe’ scenario that if Northern Ireland seeks to pursue different regulation than the rest of the UK then the Northern Irish Assembly and Executive can do so, at which point the UK would take steps to prevent the creation of a border in the Irish Sea.

However, this again seems to envisage a scenario in which all Communities in Northern Ireland support ‘special status’ in the form of an autonomous customs territory which has free trade agreements with both the EU and the UK.

This eventuality is difficult to reconcile with the DUP’s opposition to any separation of Northern Ireland from the rest of the UK. It is difficult to see how this would result in anything beyond all three territories (UK, EU and NI) adopting the relevant EU rules to make the borders between them as ‘soft as possible’ – the EU, after all, is not promising to change its rules in light of UK desires in this Report.

The Phase One agreement has forestalled talk of the negotiations betraying the spirit of Brexit (although Nigel Farage has been quick out of the blocks to castigate the deal as an unacceptable national humiliation).

But 96 years on from the conclusion of the Treaty that established the Irish Free State, we can now be confident that such talk is inevitable.

All those competing visions of Brexit cannot be accommodated within the framework taking shape at this stage, which suggests a ‘softer’ outcome than desired by some.

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