Dominic Walsh is a policy analyst for Open Europe.
The negotiations on the Brexit Withdrawal Agreement are now entering a critical stage. The overwhelming focus of the negotiators is the Northern Ireland backstop, which has effectively been the sole obstacle to a deal for months. If a compromise cannot be reached, a No Deal Brexit – with all the attendant negative consequences for both Northern Ireland and the Republic of Ireland – is the most likely outcome.
Open Europe’s new paper, Resetting the Backstop, explores how the impasse over the backstop came about, and considers the possible ways ahead to a deal. We argue that while a strict time-limit would be neither negotiable nor desirable, any backstop arrangement must be temporary – a position recently backed by Charlie Falconer, Labour’s former Lord Chancellor. Recent news reports have also hinted at movement in this direction from the negotiators. While the UK appears to have conceded that the backstop cannot have a strict time-limit, there have also been welcome signs of acceptance from the EU that, in principle at least, the backstop cannot apply in perpetuity.
Although some Eurosceptics may wince at the prospect of a customs union-style backstop without a clear end date, a time-limited backstop will not be negotiable with Ireland or the EU, and would add unnecessary pressure to complicated negotiations on the future relationship. However, to square the circle of a backstop which is not time-limited but is still temporary, there needs to be an alternative exit mechanism for the UK. Without this, the UK would be faced with the unpalatable prospect that the EU could keep it ‘trapped’ within the backstop – in effect, unable to leave a customs union (which would include wide-ranging rule-taking) without ceding economic sovereignty over Northern Ireland.
Recent reports mention a “review mechanism” for the backstop. Geoffrey Cox reportedly told the Cabinet on Tuesday that the EU’s admittance that the backstop can be temporary and willingness to discuss a “review mechanism” were major steps forward. He is right, although the devil will be in the detail. In particular, a key bone of contention is who controls such an exit mechanism. Some ministers, understandably concerned that the UK “takes back control” after Brexit, are reportedly pushing for the UK to be able to trigger any exit mechanism unilaterally. But Ireland, in particular, will likely fear that this would enable a future UK Prime Minister to initiate a chain of events which would lead to a hard border.
A mutual review mechanism, perhaps involving independent arbitration, may offer a way forward – though it is debatable whether a ‘Ukraine-style’ mechanism, with its associated role for the European Court of Justice, could really be considered ‘independent.’ A mutual review mechanism would potentially allow both sides to save face. The UK would be able to say that it has some control over the process, rather than requiring the EU’s permission. Ireland, meanwhile, will be able to say that it has avoided a situation in which the UK can unilaterally exit the backstop and trigger a hard border. The presentation may have to be fudged somewhat; it is difficult to see how the border issue can be comprehensively solved before discussions on the future relationship have taken place. But with so little time left, for either side to force the issue now risks triggering No Deal, which would be politically and economically damaging to Northern Ireland and the Republic of Ireland alike – to say nothing of the UK as a whole and the rest of the EU.
Fundamentally, the backstop can only work as a ‘bridge’ to the future UK-EU relationship. The EU and Ireland like to refer to it as “all-weather”, and indeed the December Joint Report says that it must apply “in all circumstances.” But the idea that a Northern Ireland-only backstop could be practicable or enforceable in the absence of a wider UK-EU deal is implausible – as some EU officials have admitted, it cannot be “tsunami-proof.” Clearly, if there can be no Withdrawal Agreement without a backstop, equally there can be no backstop if there is no Withdrawal Agreement. But even with a Withdrawal Agreement, the two sides could fail to reach a trade agreement during the transition period. The prospect of the UK trading with the EU on WTO terms – which would require customs and regulatory checks between the two – will therefore remain long after March 2019. Even if this version of ‘No Deal’ came after the UK had signed up to a Northern Ireland-only backstop, it is unclear how this backstop could really operate in practice if the UK and EU failed to conclude a future partnership. In such a scenario, the EU would no longer have any say over the UK’s trade or regulatory policy; how then could it enforce customs or regulatory checks within the UK’s sovereign territory?
If there were a clearer path to a future relationship which would obviate the need for both East-West and North-South checks in Northern Ireland, the Government could afford to be more relaxed about the backstop. However, the EU has fuelled uncertainty over the future relationship by rejecting the Government’s ‘Chequers’ proposals, offering instead two unacceptable options: a Canada-style FTA for Great Britain (creating a border in the Irish Sea), or a permanent ‘EEA plus customs union’ relationship (which would arguably not deliver on the referendum result). Given this, there is a risk that a backstop conceived as an “all-weather” insurance policy becomes a permanent end-state.
Once the backstop’s infeasibility in a No Deal scenario is grasped, the “all-weather” requirement seems an impossible bar to reach. The UK’s ‘bridge’ conception – in which the backstop serves to prevent a hard border until a future relationship serving the same function is in place – is far more realistic. However, the backstop cannot be a bridge to nowhere. If negotiations over the future relationship break down, the UK must retain the option for all four nations to leave the backstop as one.