Andrew Lilico is an economist and political writer.
With its draft withdrawal treaty proposing that Northern Ireland should stay in the Single Market and Customs Union, even if the rest of the UK leaves them, the EU has reneged on the Phase One deal.
The Brexit talks cannot proceed on this basis, and the UK should now suspend participation in them, saying we will proceed on the assumption we depart in March 2019 with no deal and that we regard it as now in the EU’s court to make us some offer we might find attractive for a deal.
During the Phase One talks, the Irish border was one of the three key issues the EU said it wanted to see sufficient progress on to justify moving to trade talks (along with the rights of EU citizens and the “financial settlement”).
One of the concerns of some British commentators was that, in line with the proposals of Sinn Fein and the off-the-record briefings of some Brussels officials, the EU would demand that Northern Ireland should stay in the Single Market and Customs Union even if the rest of the UK left them.
The British position on the border in the Phase One talks had two central components. First, we wanted to see off any proposal that Northern Ireland should be treated differently by the EU from the rest of the UK. Second, we wanted to see off any proposal that exactly what should happen at the Irish border had to be resolved before we had completed trade talks. Our position was that the way to deal with the Irish border issue (insofar as it is a genuine issue at all) was in the context of a future trade deal – it could not be resolved in advance of that.
In the Phase One deal the EU accepted both of these aspects of the British position. The Phase One deal accepted that there would be no new regulatory barriers between Northern Ireland and the rest of the UK, and it accepted that resolution of the Irish border issue would occur only in the context of the final partnership agreement.
That the Irish border issue was fudged in the Phase One deal was thus not in any sense an unfortunate by-product of the sides being unable to agree. Fudging it at that stage was what the UK wanted, and there was no way the British Government or the Conservative Party could have accepted the Phase One deal on any other basis.
Those who say that the European Union is now merely attempting to spell out in practical terms what the Phase One deal means are neglecting that fundamental point: what was agreed in Phase One was, precisely, that the solution to the Irish border issue was not to be spelled out at this stage.
Others say all that the EU is doing is spelling out the backstop option for dealing with the Irish border issue that was mentioned in the Phase One deal. But that is incorrect, for a number of reasons.
First, the Phase One deal did not commit to “regulatory alignment” between the UK and the EU, or between Northern Ireland and the EU as a backstop. The phrase “regulatory alignment” was widely reported to have been mentioned in a draft of the Phase One deal, but was removed for the final text. Instead, the Phase One deal committed to “full alignment with those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.”
That text in no way implies ongoing Northern Ireland membership of the EU. “Alignment” (not “regulatory alignment”) was the term that appeared several times in the Government’s own position paper on the border. The interpretation of that term was spelled out multiple times by UK ministers in their presentation of the Phase One deal. They said it meant that the UK would be pursuing the same goals as the EU but in our own way — not that we would be committing to accept Single Market rules.
Next, “those rules of the Internal Market and the Customs Union which, now or in the future, support North-South cooperation, the all-island economy and the protection of the 1998 Agreement” did not mean all of the rules of the Single Market. The Government had already explained which rules it had in mind in its position paper: those regarding animal and plant health and welfare, customs procedures, and the framework of the all-island Single Electricity Market.
Thus the Government’s commitment was that, if we did not come to some other agreement with the EU in the trade talks, we would have rules, regarding animal and plant health and welfare, customs procedures, and the framework of the all-island Single Electricity Market, that would achieve the same things the EU’s rules in those areas achieved, but in our own way. Not that we would stay in the Single Market and Customs Union.
The EU appears never to have been particularly happy with the Phase One deal. Well, if it didn’t like it, it shouldn’t have agreed to it. By now insisting on spelling out what it was agreed should only be spelled out in a trade agreement, and by proposing a different treatment of Northern Ireland from the rest of the UK, the EU is reneging on the Phase One deal.
The talks cannot proceed on this basis. So the UK should now announce that the Phase One deal (including the financial settlement) has been reneged upon, that the talks are therefore suspended, and that we shall hereafter proceed on the assumption we will leave in March 2019 with no deal.
If the EU actually wants to do a deal (and it wants any of the money in the Phase One deal), it needs to come up with credible proposals for a trade deal and security partnership. Up to now, it gives every impression of just stringing us along in the hope of running out the clock and then springing some last-minute intolerable demands. We should not put up with that any more.