This week was another important one in the Brexit process. I was planning to write about the economic impact of Brexit and in particular what Nissan’s decision to build a battery Giga-factory in the UK and the letter by Marks & Spencer chairman Archie Norman tell us about Brexit. However – tellingly – with Lord Frost and Secretary of State for Northern Ireland Brandon Lewis presenting their proposals for changes to the Northern Ireland Protocol (NIP) in a command paper, the news agenda once again was dominated by the situation in Northern Ireland – relegating any other Brexit-related issues to the background.
Frost’s Northern Ireland Strategy
To briefly summarise what has happened regarding the NIP this week: The command paper proposes an extensive renegotiate of the NIP, based on ‘solutions’ that had been on the table at least as early as early as October 2019, but had been deemed unacceptable to either the UK or EU side or unpracticable. These include a regime for sanitary and phytosanitary (SPS) rules that are based on ‘equivalence’ rather than alignment, a change to the governance of the NIP that would take the European Court of Justice (ECJ) out of the equation, and a change to state aid rules as applied to Northern Ireland.
The EU’s response did not even enter into the details – of which there are few anyways – of the proposals, but simply reiterated the fact that the NIP was not up for renegotiation at this stage. From the EU’s perspective, any solution to the NI situation will have to be found within the framework of the protocol. The ‘command paper’ can only be seen as another instance of the UK government playing hard ball, by making proposals it must know – and has been told – are unacceptable to the EU. Indeed, following the publication of the command paper, EU sources saw it as ‘unhelpful’ and warned that it would undermine some progress that was made in recent weeks over a more cooperative approach to the implementation of the NIP (notably the EU agreeing to the extension of grace periods on chilled meat until the end of September and changing its rules to guarantee supply of medicine to NI).
What is going to happen next then? In the short run not much probably, because the EU parliament is now on summer recess. When it comes back, some observers believe there is some leeway for the EU to compromise on certain specific issues raised in the command paper and the EU may be ready to make some additional concessions to meet the UK half-way. Yet, it is highly unlikely there will be enough movement from the EU on most of these issues to satisfy the UK government’s hard-line stance. Rather than a resolution of the problem, the most likely outcome is heightened tensions and unresolved problems in NI.
The trust conundrum
Partly, the stickiness of the NI issue is due to a trust conundrum built into the UK government’s approach as reflect in the latest proposals. The only acceptable solution to the UK Government – an ‘equivalence regime’, where each party adopts the standards it wants, but the other commits to accepting them as equivalent or low-risk and hence not imposing any border controls or enforcement by the CJE – requires a high level of mutual trust. The EU has already shown considerable trust in the UK when the NIP was adopted, by essentially outsourcing the policing of its external border (between GB and NI) to the UK. However, the UK’s actions in the last months – extending grace periods unilaterally, breaking international law etc. – undermines the very trust the UK government’s only acceptable solution requires. Relatedly, the UK government’s refusal to sign up to a Swiss-style SPS agreement, which would remove around 80% of the border checks currently necessary, but would require alignment of UK rules on EU rules, may suggest that the UK is planning to significantly deviate from existing EU rules, making it more difficult for the EU to accept a trust-based solution. Of course, for the UK government the reasons to refuse such a pragmatic solution are mainly ideological (taking back control, sovereignty, and all that). But someone inside the EU may be suspicious about what the refusal to accept alignment may tell us about the UK’s future plans in terms of SPS standards. (Moreover, it is probably not mentioned often enough that the UK has a chequered record in terms of SPS and food safety as illustrated by the Mad Cow disease that led to a temporary ban of British beef in Europe).
Making sense of the UK government’s strategy
So, what is the point putting forward these proposals? Partly, the reason will be domestic and meant to support the narrative that the UK is being pragmatic, suggesting various possible solutions, while the EU is being stubborn, unreasonable, bureaucratic, and inflexible. This is a key element to Johnson’s divisive political strategy that brought him to power and won him the 2019 General Election.
This strategy is disingenuous not only because the government must know most proposals had been considered before and are unacceptable to the EU, but also because it denies the EU the right to protect its borders in anyway it sees fit – the very same right in the name of which we left the EU. Indeed, whether we think the EU’s stance is unreasonable, ‘theological,’ ‘purist,’ Brexiter’s own interpretation of ‘sovereignty’ is that you get to decide what rules you apply to apply to your territory without anyone else telling you. That’s what the EU does. Brexiters being unable to accept that is another illustration of their bad faith.
Worse still, the UK government continues to pursue an outcome to the NI and especially the Irish Sea border issues that essentially does not exist as Daniel Kelemen’s Brexit Trilemma illustrates nicely: You cannot leave the single market without having either a border either between NI and the Republic of Ireland or between GB and NI. As Irish Times columnist Fintan O’Toole argued, the Johnson government’s stubborn pursuit of that impossible solution may be the result of Johnson’s inability to acknowledge that choices have consequences. Or in other words, that having your cake and eating it is a fundamentally unrealistic expectation to have in life and especially in politics. I would go one step further and argue that Brexiteers extensive reliance on ‘cakeism’ is due to more than just a lacking sense of realities. Indeed, chauvinist ideologies like right-wing national populism are unable to accept compromising, and give-and-take approaches in politics, because they are fundamentally based on the will of absolute dominance and control over one’s own life and over that of others. Any element of cooperation is seen as a weakness. A ‘real man’ (or woman but mostly man!) can do it all by himself and can get everything he wants. Therefore, although commentators agree that to solve the NIP issues the UK would have to start comprising (see for Maddy Thimont Jack’s or Chris Grey’s blog posts this week) such compromise is fundamentally contrary to everything the Johnson government believes in and hence very unlikely to happen. Indeed, anyone buying into the nationalist-chauvinist Brexiteer narrative or believing in the writings of Ayn Rand will be unable to understand that humanity’s great evolutionary achievement is cooperation not selfishness. Therefore, any change to the government’s post-Brexit NI strategy and any end to the collision course on which the Johnson government has engaged, will most likely require a change in personnel at the very top of British politics.
Another - more benign - explanation for the proposals may be that the UK Government may not take the consequences of not respecting the NIP seriously. The EU has already launched legal action in reaction to the UK Government’s unilateral extension of grace periods. These legal measures will take a long time to reach a resolution, but the TCA also allows parties to introduce retaliatory tariffs in case the other party breaches the protocol. While subject to legal challenge as well, such tariff measures could presumably be introduced quickly and would potentially hurt all of UK business – not just those concerned with NI issues. They would almost certainly lead to the UK triggering Art. 16 of the protocol, which allows one party to temporarily suspend the protocol unilaterally. Concretely that would then mean the UK simply ignores the protocol and lets British companies export to NI without border checks required by the EU.
What could the EU do to prevent its Single Market from being breached in this way? As I wrote before, it’s options are pretty limited. Of course, introducing retaliatory tariffs on UK goods may put economic pressure on the UK government. But it would also be met by UK reactions – presumably imposing tariffs on EU goods in return – leading to economic damage being multiplied on both sides. Plus, the economic pressure would not solve the immediate issue of potentially sub-standard GB goods being traded inside the EU single market. The only two options for the EU to prevent that from actually happening would be to impose its own border checks between NI and the Republic of Ireland – thus reneging on its own red line since the beginning of the Brexit process – or – even worse perhaps – to impose border checks between the Republic and the rest of the EU. Both are politically unacceptable solutions, which means – in the short term at least – the EU would have to accept the breach of the single market. Might the UK Government therefore estimate that de facto it might be able to get away with extending grace periods unilaterally and thus score another domestic media effective ‘victory?’ While this would of course not solve any of the issues and indeed damage the post-Brexit relationships with the EU further, it would presumably extend the Johnson Government’s popularity for another few months, which may be all what the government is thinking about.
An additional complication here is that with the command paper, the UK government explicitly rejects the governance mechanisms it agreed to two years ago – namely by rejecting the legitimacy of EU Institutions and the European Court of Justice (ECJ) to adjudicate disputes under the protocol (paragraph 67). This may very well lead to a trade war in which the legal basis to settle it itself is disputed. This would come close to a situation of international anarchy where the parties will try and solve their problems purely based on power not in an ordered rule-based fashion.
Is reality starting to sink in?
Once again Northern Ireland has hence dominated the news agenda. The governments approach to NI makes sure the discussions focus not on reality, but takes place in the realm of wishful thinking.
Yet, perhaps driven by my own wishful thinking, I noticed some evidence that reality may finally be sinking in among Brexiters. Indeed, directly, or indirectly, willingly or unwillingly – but always without taking responsibility – examples are mounting that Brexiters start acknowledging that so far Brexit has been a failure. Most importantly, Lord Frost now acknowledges that the NIP is unsustainable if the goal is to achieve a hard Brexit and taking the UK out of the EU single market while guaranteeing frictionless trade. This is patently contrary to the PM’s big mouthed ‘have-your-cake-and-eat-it’ declarations when the TCA and NIP were concluded, and thus either an acknowledgement of bad faith or of failure in the negotiations with the EU.
Further evidence that the Government now understands that its Brexit deal (including the NIP) was a failure comes from the fact that it now seeks to blame Parliament – in particular the Benn Act that made a no-deal outcome impossible – to explain why it accepted the terms of the NIP and TCA. Whatever the truth behind this strategy of apportioning blame, we are miles away from the Brexit government taking credit for dividends from a Brexit that was meant to be unmitigatedly good for the UK, the easiest trade deal in history, and oven-ready. That in itself is ample evidence of failure.
Then there was of course the extraordinary Dominic Cummings interview with BBC’s Laura Kuenssberg where he stated – in his habitual cold and cynical fashion – that it was perfectly reasonable to consider Brexit a mistake.
The realisation that Brexit provides few dividends and a lot of costs starts creeping into the discourse of public officials too. Thus, on Twitter, Paul Waugh quoted a Number 10 spokesperson who used – presumably inadvertently – the term ‘Brexit red tape’ (“Lord Frost and the business secretary have launched a consultation on reforming and modernising the way regulation and rules are set in the UK to slash Brexit red tape.”)
Even the Express cannot avoid reporting on the Brexit-induced shortages of lorry drivers, fruit and veg pickers, and other workers. Although, of course, they blame the EU for it. Indeed, in a most extraordinary article entitle ‘Farmer blasts EU red tape stopping workers flow to UK,” the Express now blames the EU for stopping immigrants from coming to the UK!! The ‘journalist’ states that the “EU has caused frustration for UK farmers as post-Brexit red tape has made it more difficult to get migrant workers.”
The sad thing – of course – is that the very evidence that proofs that the Leave side’s arguments during the referendum campaign were fundamentally wrong, is still used to convince Express readers that they were right all along.
This distortion of evidence and truth by both the UK Government and the pro-Brexit right-wing press will continue for some time. But the increasingly obvious reality of the impact of Brexit on the UK economy will make it increasingly harder to weave the web of lies needed to maintain the illusion of a successful Brexit.
The widely-reported empty shelves in supermarkets that result from a Brexit-induced shortage of lorry drivers and fruit and vegetable pickers and packers can still be blamed on Covid and the results of the NHS Test & Trace system asking people to self-isolate (the so-called ‘pingdemic’). Yet, as the government is taking measures to address the problems of key workers who have to self-isolate, Brexit reality will become a bit clearer still and one day it will increasingly have to be accepted.
Pro-Brexit Labour
Surprisingly though, just as reality starts to bite and the damage caused by Brexit becomes all but undeniable, senior labour figures seem to have made their peace with it and are ready to move on by - as William Keegan puts it – ‘lamely accepting a Brexit that is manifestly a disaster and needs to be reversed’. Lisa Nandy is downplaying the divisions created by Brexit. Emily Thornberry is adamant that ‘re-joining’ is not going to be labour strategy. Thornberry’s arguments are valid to some extent of course: the terms of re-joining would necessarily lead to a worse deal than what we had.
Yet, senior labour figures’ attitude may mainly be driven by the still dominant view that Labour’s path to victory at the next General Election will necessarily have to lead through winning back the former labour heartlands that have mostly voted for Brexit and for Johnson in the 2019 GE. That belief is most likely false.
Yet, with Brexit reality biting, there may soon be an opportunity window for a bolder political strategy that does not engage with the Johnson government on its own terms, but that shapes the political agenda. There are signs that the public may start supporting alternative relationships with the EU than the distant and fraught one the Johnson Government is proposing. Nandy seems to acknowledge that, but does not see re-joining as a possible alternative to the current state of affairs. Yet, based on the experience of non-member countries such as Switzerland and Norway, it is obvious that the EU does not currently have a model for stable cooperative relationships with neighbouring countries that offer the benefits of membership without its downsides. Small countries may be willing to pay a considerable economic prize to maintain a certain autonomy, as joining a club that is perceived to be dominated by large economies is a daunting prospect for a small country. For a large and influential country like the UK, only an ideological approach based on an extreme interpretation of ‘sovereignty’ would make a closer economic relationship – which will necessarily imply closer alignment of rules – without having a say in EU-internal affairs more attractive than membership. If labour were to come to power, seeking a closer relationship would sooner or later necessarily lead to a realisation of that fact and therefore bring the re-join question on the table again. Ruling out re-joining categorically now, as Starmer and others have done, may make some political sense in the current heated public debate especially if the goal is to reconquer the ‘red wall,’ but it may also lead to Labour further alienating an important part of its electorate and create roadblocks to quite possibly the best outcome in the long-term.