Theresa May has managed to strike a withdrawal deal. Now comes the hard partby Jill Rutter / December 8, 2017 / Leave a comment
The early morning rush to Brussels appears to have unblocked the path to the second phase of the UK’s Brexit negotiations.There is still more work to be done on the detail of the withdrawal agreement. But the big stumbling blocks have been surmounted. Some compromises and concessions on citizens’ rights. A methodology on money, running into tens of billions. And language on Ireland and Northern Ireland that is reassuring enough for Leo Varadkar and grudgingly accepted by Arlene Foster—asserting that we will guarantee “avoiding a hard border” and offer “full alignment” with relevant EU rules if no other way is found to avoid that in either the EU-UK trade agreement or an agreed “specific” solution.
The prime minister has managed the not inconsiderable feat of simultaneously aligning her cabinet, her party, the island of Ireland and the EU.
Providing the PM can keep them all on board over the next week (and she is already turning to arch Leaver Michael Gove to sell the settlement and sing loyal praise), the next stop is the European Council next week. Donald Tusk today said he would look to the Council to authorise talks about transition—and to prepare the 27 for talks about the future relationship—with new EU negotiating guidelines to be adopted in March. The UK should seek to use that time to influence those guidelines—as we have learnt in phase one, the mandate matters.
Transition matters to the UK. There is a drumbeat of reports from parliament and evidence from officials that the UK will not be ready to meet the obligations of a “third country” by 29th March 2019. New customs systems on current timetables would only go live months before; there is no time to build new infrastructure and there could be severe hold-ups for any goods needing border checks. So a standstill transition of the type that appears on offer will help UK government planning.
This was also the critical time when many businesses said they would start activating their plans to move. Agreement now may lead some at least to put those plans on hold. Others may slow down until they see more precisely what the future relationship looks like.
That is the subject that will dominate the talks next year. There is now a breathing space while the EU considers its position—though statements from Michel Barnier to date have been quite clear that the UK cannot expect Norway style access to the single market with Canada style obligations.
The UK has today reiterated its aim of achieving a deep and comprehensive trade deal that recognises the unprecedented starting point of complete regulatory alignment. But, as Philip Hammond made clear this week to the Treasury Select Committee, the cabinet has, quite staggeringly, not yet discussed the end state. Michael Gove today was still suggesting we can have a deal that allows trade to continue much as now—but with much more regulatory flexibility than the EU has conceded to anyone else to whom it has granted the access we seek.
It may be the fact that the cabinet has not had the detailed discussion of the difficult trade-offs it faces on future trade that has—ironically—unlocked the path to agreement on Ireland. The agreement gives a triple guarantee to the measures the UK will take to avoid a hard border. It appears to constrain the UK government’s future options quite considerably. A lot of the next year may be spent debating what each side means by “alignment.”
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