The Withdrawal Agreement has foundered, and beneath the froth and fury of Parliamentarians blaming the prime minister, the opposition, the European Research Group, the European Union, and indeed each other for the deal’s undoing, the rocks of the Irish backstop await the next unfortunate attempting to pass.
The prevailing consensus is that there can be no deal without a backstop of some sort; that the Irish border is too integral to the EU’s negotiating position; and that there can be no solution which sees the border hardened with infrastructure. Even the addition of cameras is rejected as an intolerable imposition.
At the same time, the government of the United Kingdom is fixed on leaving the single market and on leaving the customs union, while Parliament is understandably unwilling to leave Northern Ireland within the EU’s regulatory and customs framework.
Together, these positions seem to rule out any possibility of a deal. We must either crash out or stay in. And if we leave without a deal, the blame will fall upon the United Kingdom.
To put my cards on the table, I do not believe that this is an entirely fair or accurate analysis. While Theresa May has been at varying times incompetent, unclear, dishonest, and unimaginative – simply calling for a technological solution without any further detail does not qualify as “imagination” – the European Commission and Dublin have been inflexible, short-sighted, and have put the pursuit of home-field advantage in future negotiations ahead of finding a withdrawal agreement acceptable to the UK. If the Commission could watch the furore over the backstop over the last two months and believe that the deal can pass, then it has even less political sense than I had previously credited it with.
The backstop locks Northern Ireland into the single market, and the UK into a customs union with the EU until a deal can be found that guarantees no border infrastructure will be put in place. In addition, Britain must commit to providing a “level playing field”. In practice it means the UK signing up to “dynamic alignment” on EU state aid laws – so copy-pasting EU law without a say, adopting EU tax policies, and committing to a principle of non-regression on labour and environmental regulations.
The problems with the backstop come in two varieties; the obvious ones now, and the ones which kick in when we start attempting to negotiate any future deal.
The first and most important problem is that the backstop is profoundly undemocratic. Rules would be made in Brussels without any British say or vote, and would then simply enter into force over Belfast. Some of the more vehement voices in the debate have described it as a partial regulatory annexation of Northern Ireland – a description which is not completely without merit.
Second, it locks the UK into a customs union. We would be unable to make trade deals with any country the EU has not. Better still, the functioning of this customs union is one way; we must lower tariffs on countries the EU has signed deals with. They are under no obligation to do the same for us. Our exporters will not only be unable to compete on an even footing with these third countries, they will also be at a disadvantage relative to their European counterparts.
Third, the non-regression components not only introduce a means for the EU to pass law for the UK without any democratic say, they bind our policies to that of the bloc in ways which tie our hands when attempting to mitigate the damage of leaving, or to reshape our economy for the 21st century.
The fourth and fifth problems kick in further down the road. To begin with, the backstop is a nightmare for unionists in general – not just May’s allies in the DUP. The backstop would diminish links with the rest of the United Kingdom in favour of preserving ties with the Republic. It is difficult to see a set of circumstances in which this does not lead to resentment. Dialogue has focused on the need to minimise the grievances of republicans on both sides of the border. It is entirely plausible that a Brexit which sells unionists down the river could equally lead to a flare-up of tensions; these concerns cut both ways. If checks and differences are a disaster on land, they cannot be a simple illusory concern in the Irish Sea.
The deal also tears up the integrity of the UK’s internal market. The deal will require checks on goods shipped from the UK to Belfast. And without checks on goods moving the other way, we will find a backdoor for EU goods undermining the EU’s desire to do any deal improving the UK’s access to its market*.
The fifth is more subtle. The backstop is essentially designed in such a way that it is likely lead the UK bit by bit into a relationship akin to that of Ukraine or Norway, where we become a passive recipient of EU rules. The backstop does not come into force until after we leave, and would kick in by 2022 at the latest if no deal could be found. Once we are facing the automatic imposition of a regulatory border between parts of the United Kingdom, we must trade off a desire to preserve constitutional integrity against a desire to be a rule-maker rather than a rule-taker. We diminish our union, or we surrender our sovereignty. It is explicitly written in a way which reduces the costs of the Norway model relative to something like Canada.
The obvious point in response to this is that the backstop was negotiated by the British government, and that Theresa May should not have signed up to a deal which she could not get through. You’ll find no disagreement with this statement here; May signed up to a deal because she was desperate to make progress, and managed to obfuscate the issue by talking about cameras and drones – ignoring the objective reality that the latter are really only useful for shutting down major airports.
The rejection of the deal reflects in part the UK’s red lines; May herself said that no British Prime Minister could agree to a deal which cut away Northern Ireland. But it also reflects the EU’s unspoken red lines. And its failure is every bit as much a function of these as it is the UK’s.
Assume for now that the Commission’s preferences are fixed, and that a working backstop must be found. Everything we have heard so far – every proposal, every argument – has begun from the position that it is the UK which must make concessions for the border to work. Dublin and the Commission have done a masterful job in framing the negotiation in these terms. But there is nothing inherent in the idea of a backstop that demands this.
The initial requirement was simply an arrangement which preserved the current status of the Irish border. Given that the UK does not wish to remain in the single market, this will require a regulatory barrier somewhere. There is nothing which says this must be between the UK and Northern Ireland.
Consider the following model. A full regime of regulatory equivalence between the UK and EU – as exists within the single market when technical standards differ between nations – is ruled out early on. Instead, an exception is made for Ireland. Goods made in the UK can circulate freely on the island, with full equivalence and without customs checks. To preserve the UK’s internal market, the UK agrees that EU standards are equivalent to its own.
To protect the EU’s single market, goods flowing from Ireland to the EU face the same regulatory and rules of origin checks as those coming from the UK. These could be diminished through the processes the EU has suggested for checks in the current backstop arrangement.
Differences in UK and EU standards post-Brexit are likely to reflect economic convenience more than they are genuine differences in quality or safety. And to the extent that the latter elements are relevant, it is more than likely that the UK will be the party seeking to cut costs. The cost to the British consumer of this deal is negligible.
Irish businesses could be undercut to a degree by their British counterparts. They will also face increased costs in trading with their single market. But there would also be benefits, with the circulation of lower cost goods likely increasing consumer welfare. And, of course, there would be no hard border.
Now. It is obviously far too late to float this idea in real life. But even if there was sufficient time, would the EU accept this arrangement? The likelihood is that it almost certainly would not, and for precisely the same reasons that the UK won’t accept the current backstop. It breaks off a part of the internal market. It places frictions where none existed before.
The EU in public acts as though regulatory checks are a minor issue. It has kindly offered to “de-dramatise” the existing backstop, with checks at “company premises or at the markets”. Surely if such an offer is good enough when breaking the territorial integrity of a country, it will be good enough when loosening the bounds of a trade deal between Ireland and the continent?
If the EU insists that it does not want regulatory checks on trade from Ireland to continental Europe, then the existing backstop offers a neat solution. To paraphrase the Withdrawal Agreement, there is nothing that “prevents the European Union from ensuring unfettered market access for goods moving from Ireland to the rest of the European Union’s internal market”. Only if the EU insists on checking UK goods will any checks be needed. And yet, one feels, this would somehow not be a persuasive argument when put back to the Commission.
Moreover, there are several elements in the existing backstop that are not present in this model. It does not carve up a country, diminish democratic sovereignty, or inflame sentiments on either side of the unionist/republican divide in the way the current offer does.
And yet even with these omissions it is almost certain that the EU would reject such an offer out of hand as unthinkable, despite claiming that these are completely reasonable requests when applied to the United Kingdom. Dublin and Brussels have framed the issue in such a way that all the concessions are supposed to come from the UK’s side, but that is manifestly not a reasonable state of play. And it means that the blame for border infrastructure should be more evenly apportioned than the current debate acknowledges.
The EU’s position is not – and has never been – that it is open to any solution which preserves the border, because nothing like this deal has ever been on the table. It has not been on the table for reasons which line up with those given by the MPs who rejected the current offer. The EU’s red lines mirror those given by the UK; they are simply unspoken.
The EU’s true first priority is preserving the integrity of the single market. This is why simply ignoring the border and accepting smuggling as the price of peace is not on the table; for all the the Irish government would like to avoid infrastructure and checks in the event of a no-deal Brexit, the bloc would eventually insist that such checks were put in place. Everything else follows from this. For the United Kingdom, the priorities would appear to be the retention of sovereignty, and the preservation of the Union. The simple truth is that if negotiations fail, then both parties are equally at fault. The UK should not have to offer ever larger concessions on the border to secure a deal. There comes a point when the requests made are unreasonable.
At this point, the argument might be put forward that this is typical British arrogance and exceptionalism; the belief that the United Kingdom deserves special treatment which would not be meted out to any other country. This alternative backstop would fundamentally compromise on what the EU is.
We could just as well flip that on its head. The current backstop fundamentally compromises on what the United Kingdom is. How is the current offer anything other than typical Brussels arrogance, a reflection of the federalist mindset that national sovereignty and integrity does not really matter in the way that the institutions of the European Union do?
The EU seems to believe that it’s perfectly natural that the UK should simply carve away a part of itself to make the process of leaving easier, and in doing so bind itself to a host of EU laws. That it’s also perfectly natural that EU firms – by virtue of setting the rules – should enjoy a competitive advantage in Northern Ireland; no checks, no special production runs.
The preferences of the UK and the EU mirror one another. It is not that the EU wants no border and the UK won’t accommodate, it’s that both have red lines – one clear and one unspoken – which are more fundamental than the status of the line between Tyrone and Donegal. We simply accept one as more reasonable as that is how it has been framed.
Generally speaking, economists would say that the outcome of a bargaining process favours the side with the least to gain relative to their outside option. Pro-Europeans have something like this principle in mind when they proclaim that the relative sizes of the two parties make it inevitable that the UK will give way. But there are many other factors in play, and many of them suggest that things may not quite be so simple.
For instance, tying ones hands can be a diplomatic advantage. The EU can huff and puff about the difficulty of treaty change accommodating any deal, and insist that all flexibility take place on the part of the UK. The UK, on the other hand, – by virtue of a largely unwritten constitution – simply has to find a way to get an act through parliament. What in usual times is a weakness for the EU and a strength for the UK is flipped in the negotiating process.
The EU’s current stance relies on the assumption that the UK, when it comes down to it, is bluffing about territorial integrity. What if it isn’t? What if the thought of breaking up the union is genuinely so costly as to rule out passing the withdrawal agreement? Very quickly, we find that the UK’s negotiating position is stronger than we had originally assumed.
The basic reality of a negotiating process is that you cannot make a claim that your partner finds worse than what happens by default if no agreement is reached. The default here is that the UK leaves with no deal, and there is a hard border in Ireland.
If the EU cannot give way on the backstop and the UK will not accept it, then this is what will happen unless there is no Brexit at all. Under these circumstances, given the EU’s red lines it would be sensible to begin negotiating from the position that the border should be softened rather than erased with a view to avoiding the disruption a no deal Brexit would bring. Second-best is better than absolute worst.**
It is probably too late to come up with an alternative backstop. The UK played its hand appallingly at the beginning of the process, initiating Article 50 without a clear idea of what it wanted, and simultaneously drawing red lines which ruled out options, but failing to make sufficiently clear that compromising the status of Northern Ireland would not work in the Commons.
If Britain really wanted to ensure the EU understood this, it should have narrowed its options. Making decisions costly can have benefits. Ruling out a separation of Northern Ireland from the UK – and investing in no deal preparation from the beginning – would have strengthened our bargaining position considerably by making a semi-credible threat to walk away if the backstop was not softened considerably. Half-hearted preparations over the last six months of the process look like what they are; a sudden and growing panic.
Simultaneously, the EU has committed enough diplomatic capital to the idea that there can be no hard border that it may not now be possible for it to back down. Beyond a certain point, it will have committed so strongly to the idea in public that a revocation would fatally undermine future negotiations.
If we have reached this point – and the UK turns out not to be bluffing – then a return to the table is impossible. Both sides have taken hard stances in the hope that the other will give way, only to find that they cannot now back down. The only options left are a no-deal Brexit, or no Brexit at all. It’s that, or the UK backs down and finds itself trapped by the backstop between Scylla and Charybdis.
*Updated 19 January to make clear the difference between checks required by the WA and those which could result from policy decisions.
** Updated 22 January to spell out explicitly what should be quite a clear point in any negotiating game.