Northern Ireland could be caught in a tariff trap imposed by a British minister. How can such a muddle be avoided in future?

Whatever that latter day Rumpole attorney general Geoffrey Cox comes up with by way of alternative arrangements to try to seal the withdrawal deal at Sharm el Sheikh  at the weekend, Northern  Ireland’s own arrangements are  the least likely  to be replaced, as the Irish Times’ Denis Staunton  has warned.        and is bound to cast fresh doubt on the DUP’s support for a revised deal.

(Attorney General)  Cox wants the EU to make explicit the temporary nature of the backstop on the grounds that article 50 cannot be the basis for Britain’s future relationship with the EU, only for its withdrawal.

The EU is willing to consider the proposal if it is presented, but two potential problems are apparent already.

One is that the backstop rests on two separate legal pillars. Its Northern Ireland-only measures are supported by the EU law underpinning the areas of North-South co-operation outlined in the Belfast Agreement. These can be open-ended.

The UK-wide customs arrangement, on the other hand, is based on article 50, and the EU accepts that it must be a starting point for the future relationship rather than a landing zone. EU negotiators are happy to consider fresh legal assurances that the UK-wide backstop measures – which the British government requested – must be temporary.

But they cannot offer the same assurances about the Northern Ireland-only elements which matter most to the DUP, whose support the prime minister views as essential to winning over a sufficient number of her own backbench Brexiteers.

The sticking point of the backstop is creating enormous problems for its arch defenders, as the FT’s Arthur Beesley explains:

Leo Varadkar’s government is facing demands to seek emergency aid from Brussels after Michael Gove, UK environment secretary, said reports that Britain would operate a zero-tariff regime in a no-deal were “not accurate”.  Mr Gove is preparing tariffs and quotas on beef, lamb and dairy products ahead of Britain’s scheduled exit date of March 29, sending shockwaves through an industry that sends 37 per cent of its exports to the UK. Irish beef could be hit with tariffs of up to 53 per cent if Britain applied World Trade Organisation rates, which would translate into a €750m hit in the beef sector alone.

(Tariffs) would decimate much of Ireland’s agri-food exports to the UK,” said Paul Kelly, director of Food Drink Ireland, an industry lobby that has called for a special stabilisation fund to help offset any UK tariffs. He added that, for the €4.5bn of food and drink that Ireland exports to Britain, the UK could place an additional €1.7bn in tariffs.

 In the event of No Deal, Northern Ireland’s agribusiness  being so integrated with the Republic’s,  would therefore  be caught in a UK tariff trap imposed by the UK minister – a situation you have to go back before 1798 to see something similar – and you know what happened then.     

Could the negotiations have been handled differently  to minimise the problems all round?

I cannot see any radically different alternative for NI  other than  the terms of the NI specific  backstop,  so long as  the deal for GB includes closely similar regulation and can at least be reviewed if not vetoed by a sitting Assembly.

That old Brexiteer  David Davis was right about one thing – that the sequencing of  Brexit – get out first, then do the real deal later –  would prove to be an enormous handicap.  Simon Nixon, the chief leader writer of the Times, analyses the essential problem of the negotiating  strategy required under the Lisbon treaty  and why it shouldn’t be repeated in the next phase of the negotiations in the years to come.

 The British government complained about the sequencing from the start. The Brexit secretary David Davis boasted this was to be the “row of the summer” in 2017. Ministers argued that it was impossible to resolve the Irish border issue without settling the relationship while Theresa May continued to claim until early 2018 that the future relationship would be settled by the time Britain left. Some EU leaders appear to agree, privately arguing that the failure to do so was politically naïve.

Both sides came to the conclusion that delaying detailed negotiations of the future relationship until after Brexit offered the best chance of reaching a deal. Brussels came to this conclusion first. In public, the commission argued that the problem was legal: the treaties forbade it to negotiate a trade deal with a current member. In private, officials were clear the real obstacle was political: if Britain tried to force a detailed negotiation of the relationship before it had left, Brussels would be obliged to take a tough line. “Once the UK has left, we will be able to be much more flexible,” a senior commission official told me in late 2016.

This strategy contained one serious and possibly fatal flaw. It required the UK to pay the €40 billion divorce bill and exit the EU with no guarantee that it would be flexible and having given up its leverage in future negotiations. Brussels’ professions of future goodwill may have been sincere but British politicians would have to sell this arrangement and they were being asked to take an enormous amount on trust. The commission also woefully underestimated the political sensitivity of the Irish border issue, failing to anticipate the strength of feeling the backstop engendered.

Yet Theresa May ultimately went along with the commission’s sequencing for the good reason that she too came to realise that too much clarity on the future relationship was politically dangerous. After 18 months of mulishly refusing to acknowledge that there was no conceivable way that Britain could pursue an independent trade policy while continuing to enjoy frictionless trade with the EU, she was eventually forced to come to the same conclusion that Brussels had understood from the start: that there is no good Brexit deal to be done, that Brexit is a calamitous lose-lose proposition and that the politically toxic challenge of sharing out the losses would be easier once we had left the EU. She embarked on a strategy of obfuscation and subterfuge. She attempted to pull the wool over Britain’s eyes with a vague political declaration that provided for a “spectrum of outcomes” that enabled her to avoid acknowledging the compromises ahead.

One way or another, this attempt to deliver Brexit by stealth will reach the end of the road next week. Mrs May has until February 27 to persuade MPs to back her deal before parliament will force the government to seek a delay and avoid a calamitous no-deal Brexit that it becomes clearer every passing day will plunge the country into turmoil. It is possible that the threatened resignation of a number of ministers who have pledged to back the Cooper-Letwin amendment that would hand parliament control of the Brexit process may yet be enough to spook enough hardline Brexiteers in the Tories and the Democratic Unionist Party into backing her deal next week, even though it will almost certainly be effectively unchanged since it was defeated by a record parliamentary majority in January. Mrs May’s leverage will never be greater than now.

But if the Cooper-Letwin amendment passes, or the prime minister tries to save her political skin by conceding a delay herself, it should be clear that a new strategy is needed. Whoever takes responsibility for the next phase of Brexit negotiations will have to acknowledge that MPs will never vote for what the former Brexit minister Lord Bridges of Headley described as a “gangplank into thin air”. The current sequencing will have to be abandoned.

If any delay to Brexit is used to engage in yet more brinkmanship over the Irish backstop then it won’t be long before Britain faces another no-deal cliff edge. There will be no resolution to the crisis and continued uncertainty will only inflict further damage on the economy. The only rational option will be to use the extra time to flesh out the political declaration so that it no longer reflects a spectrum of options but offers a far more detailed explanation of what the future relationship will be so that when the deal next comes back to parliament, no one is under any illusions what they are being asked to accept.

Fleshing out the future relationship will take time. With European Parliament elections in June — and allowing time for further political turmoil in Britain – that points to any Brexit delay needing to be closer to a year than a matter of months. The EU, which must agree to any extension, should recognise that anything less would be pointless. Meanwhile the original Brexit problem first identified by Brussels and eventually accepted by Mrs May will remain: when daylight has been shone on the reality of what the future relationship actually entails, when the trade-offs have been resolved and the losers on both sides publicly identified, who will ratify any Brexit deal?

 

 

 

 

 

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