After eighteen long months, the government has for the first time privileged pragmatism over ideologyby Jonathan Lis / December 8, 2017 / Leave a comment
Photo: Jens Kalaene/DPA/PA Images Let us call this now: hard Brexit is dead. It is no more; it has ceased to be; it is an ex-hard Brexit. Today’s deal on the first phase of withdrawal is the final nail in the coffin for the government’s attempts to leave the single market and customs union. It cannot now do either of them while satisfying the agreed wording for the deal, available to read here. Here’s why. Paragraph 49 is crucial. It states that “in the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union which, now or in the future (my emphasis), support North-South cooperation… and the protection of the 1998 [Good Friday] Agreement.” The fact it mentions both the single market and customs union is key. Dublin and Brussels have not, at any point in these negotiations, wavered from their belief that an open Irish border requires both customs and regulatory harmonisation between Northern Ireland and Ireland, as now. The single market ensures equal standards, so goods do not need to be checked at the border; and the customs union guarantees that no tariffs need to be paid either. There is no precedent for an open border between two European states unless they share both the single market and customs union. Norway is in the European Economic Area, but still faces and imposes tariffs on some agricultural and fish products, and Norway and Sweden must also perform rule-of-origin checks on goods crossing their shared border. Turkey, on the other hand, is in a partial customs union with the EU but not in the single market, and there is heavy infrastructure on its border as well. In other words, any “agreed solution” to the hard border problem will, for all intents and purposes, involve continued single market and customs union membership. That, simply, is the new reality. Any effort to put a border in the Irish sea would be unacceptable to the DUP and a number of Conservatives. Brexiteer claims that unspecified “technology” could prevent a hard border are not credible. But what if the two sides don’t find that solution? According to paragraph 49, even if there is no specific agreement on Ireland, the UK will be compelled to harmonise itself with the EU on those parts of the single market and customs union which ensure an open border. That means we will stay aligned on tariffs and standards for the key products traded across that border: particularly machinery and industrial equipment, chemicals, and of course, agriculture. Agricultural tariffs and standards will not be in the UK’s gift to determine; not only that, but the reference to “in the future” guarantees permanent alignment. When the EU changes its tariffs or regulations in these product areas, the UK will be obliged to follow suit. “Hard Brexit is no more; it has ceased to be; it is an ex-hard Brexit” The core result, whether that “agreed solution” is reached or not, is that the UK will not be able to sign the free trade deals it seeks. New Zealand demands, above all, reduced tariffs for its dairy and meat products; and the US expects us to re-align our food standards and regulations to accept that famous chlorinated chicken and hormone-treated beef. US Commerce Secretary Wilbur Ross effectively insisted upon it in a speech last month. The UK will be powerless to satisfy either country. The deals will not happen. How, then, to reconcile paragraph 49 with paragraph 45’s reference to the UK “leav[ing] the European Union’s Internal Market and Customs Union”? The answer is that we cannot and do not reconcile it—at least not yet. The moment of reckoning in London will come soon enough. Because today’s agreement has already daubed the writing on the wall. And, of course, nomenclature is everything. We are indeed leaving the EU’s Internal Market—but are we leaving the European Economic Area that replicates it? Certainly, we are also bound to leave the EU Customs Union as a consequence of leaving the EU, but the text does not exclude “a” customs union which performs all the same functions—and indeed, the government has already deployed this verbal smokescreen to pretend that we are going to leave the customs union before a transition period. One phrase in paragraph 49 causing confusion is “in the absence of agreed solutions.” Some on the Leave side have fretted that this agreement traps us into regulatory alignment even if we walk away from the table; and some Remainers are optimistically asserting that we can jump from the cliff and land in the single market and customs union. Neither scenario is accurate. These “agreed solutions” refer to agreement on Ireland in the context of an overall deal. That deal must be endorsed by the European Parliament in accordance with Article 50. If there is no deal on anything, neither the UK nor EU is obliged to follow any of this agreement. In that scenario, the only destination for the UK is a cliff-edge in all its rocky horror. Although today’s deal leaves the UK government basking in its hard Brexit delusion for a few more months, we have witnessed a key transformation in this process. Thanks to this agreement, the UK has committed for the first time to deliver a set of absolute outcomes, from which policies necessarily follow. Until now, the government had made its key objective the fulfilment of arbitrary policies, for purely ideological purposes and without any regard for the consequences whatsoever. Thus, the UK resolved to leave the single market to satisfy false anti-immigration dogma, and to depart the customs union to dust off our commercial gunboats and re-enact long-suppressed fantasies of global trade dominance. Neither policy had anything to do with the real British economy or real people’s lives, and everything to do with our profound national memory and anxiety. But today that changed. The government can stuff the consequences no more. From today, the consequences instead stuff the government. If it wants to leave the single market to end free movement of people, or the customs union for the privilege of signing UK-only trade deals, that produces a hard border—and defies today’s agreement. After eighteen long months, the government will for the first time have to privilege pragmatism over ideology. We may still leave the EU, but with so little to show for it that many will wonder why we even bothered. This agreement keeps us permanently connected—and subordinated—to the EU. The time may come when people consider it preferable to remain at the decision table rather than do as we’re told in the next room. From today, Britain is heading for soft Brexit or no Brexit. Brexit Britain: the future of industry is a publication which examines the future of UK manufacturing through the prism of the recently released Industrial Strategy White Paper. The report features contributions from the likes of Greg Clark MP, Miriam Gonzalez, Richard Graham MP and Frances O’Grady. To find out more about how you can become involved in Prospect’s thought leadership programmes, please contact email@example.com. If you want to know all about where industry is headed in Brexit Britain, you can download the whole Brexit Britain: The future of industry reportas a fully designed PDF document. To do so, simply enter your email below. You’ll receive your copy completely free—within minutes.