Stephen Booth is Head of the Britain in the World Project at Policy Exchange.
Since the Coronavirus outbreak, Brexit has understandably been on the backburner but we are entering another crucial phase in the coming month.
This week marks the penultimate round of UK-EU negotiations over the future relationship before a high-level summit in June, which will take stock of progress.
June 30 is the formal deadline for agreeing an extension to the transition period, currently due to end on December 31, after which the UK-EU relationship will be based on a new trade agreement or World Trade Organisation (WTO) terms. At this stage, either outcome remains plausible.
Many, if not all, on the EU side now accept the UK’s repeated declarations that it will not seek an extension to the transition period under any circumstances.
Interestingly, Sir Keir Starmer, perhaps mindful of his need to rebuild the ‘red wall’, does not see any political capital in demanding one.
The June summit is also significant because the Government has said previously that if little progress on reaching a deal appears to have been made by then, the UK will turn its attention to domestic preparation for an EU relationship on WTO terms.
This doesn’t necessarily mean UK-EU talks would come to a firm halt.
But the UK could certainly switch emphasis to No Deal implementation and potentially an acceleration of trade talks with other partners, such as the United States, with which negotiations commenced last week.
In recent days, we have also seen that the Northern Irish question yet again threatens to poison the well of the future relationship negotiations.
The UK has rejected the EU’s repeated demand to retain a permanent office in Belfast to monitor checks and controls on goods crossing the Irish Sea after the end of the transition.
Technically separate from the future relationship talks, the dispute is a proxy for wider disagreements about the implementation of the Northern Ireland Protocol established under the Withdrawal Agreement, which have the capacity to spill over and sow mistrust on both sides.
There remains much work for the Joint Committee overseeing implementation of the Protocol to do and the EU clearly harbours fears that the UK is soft-peddling.
However, as Michael Gove, the UK’s representative on the Joint Committee, recently set out in evidence to the House of Lords’ EU committee, translating the legal text into practical arrangements was always going to be a difficult challenge since many questions were left open.
Too often throughout the Brexit process, the EU’s technocratic approach has failed to consider the delicate politics of Northern Ireland and the demand for a Belfast office is another example.
The Protocol gives Northern Ireland special economic status. It will be in the UK’s customs territory and will therefore be subject to the UK’s independent trade policy.
However, in order to avoid a new border with the Republic, goods “at risk” of ending up in the EU single market, rather than being consumed in Northern Ireland, must be subject to the correct EU tariffs and regulations.
There are new reports that the UK may be enhancing existing inspection posts at ports but the UK’s clear desire is for any checks to be minimal.
Article 12 of the Protocol states that “UK authorities shall be responsible” for ensuring procedural compliance, but EU representatives can request to be present at any customs or regulatory inspections.
Hence, from the EU’s point of view, the need for the Belfast office.
EU officials argue that the proposal for an office had been discussed over a year ago without major UK objections.
However, ministers and advisers in Theresa May’s government point out that, in 2019, the proposal was for a point of contact in all devolved nations for consular and business activities, not an office to implement a politically controversial customs border.
Indeed, Article 12’s stipulation that any checks or controls be carried out only by UK authorities has a long history.
In February 2018, the European Commission published a draft withdrawal agreement which, to deliver the backstop, proposed keeping Northern Ireland within the EU customs territory and a provision for UK-EU joint controls at Northern Irish ports.
This, remember, is the proposal that Theresa May said no British Prime Minster could ever accept.
It is clear that any monitoring of the UK’s implementation of customs procedures must be ad hoc and based on information exchange, rather than routine and constant EU supervision, which would be an unacceptable infringement of UK sovereignty.
The Protocol simply does not provide a legal basis for the permanent presence the EU appears to be seeking.
More broadly, the Government is right to point out that the Protocol will only be sustainable if there is broad-based, cross-community political consent for it in Northern Ireland.
It is worth noting that Article 16 of the Protocol allows either party to apply “safeguard measures” in the event that its application leads to “serious economic, societal or environmental difficulties” or to “diversion of trade”.
Michel Barnier previously recognised the need to de-dramatise the Northern Ireland issue and this would be welcome now, since the core issues remain political rather than economic.
However, if the EU insists on checks that fulfil the letter of the EU’s customs code, there is potential for a major crisis.
Meanwhile, this week’s round of UK-EU talks follows accusations from Brussels – including Barnier and Trade Commissioner Phil Hogan – that the UK is failing to engage constructively in the three main areas on which the talks hinge: the so-called level playing field, fisheries policy and governance of the agreements.
The UK rejects the assertion and says it has now shared legal texts on its proposals for a comprehensive trade agreement and a new fisheries agreement.
These issues are unlikely to be resolved until the deadline forces politicians on both sides to make strategic choices.
No doubt a deal will require some compromise on both sides but as the Financial Times’ Wolfgang Munchau has pointed out, “The UK may be the smaller country, but it can secure its chief negotiating goal of regulatory independence unilaterally by walking out. The EU cannot do the same.”
Agree or disagree with that goal, but the UK’s priority is crystal clear.
What is the EU’s primary objective?
We know the EU wants to safeguard its internal market, but it does not need to do so by exporting its regime of state aid regulation to the UK by treaty, as it is currently demanding.
Maintenance of existing EU fishing quotas is a precondition for a UK trade deal, but the EU cannot effectively secure any of these rights if there is no agreement.
The Northern Irish Protocol can only function effectively with the cooperation of the UK.
With the UK now playing hardball, the EU’s leverage appears to be waning.