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Rainbows

Theresa May used to tell us “Brexit means Brexit”. However, she never really told us what Brexit means. In truth Brexit is like a rainbow, a range of colours, opinions and viewpoints. If we can define a rainbow, can we define a Brexit? Can it ever be touched?

On our political spectrum, the reds, yellows and greens are all in favour of some sort of Remain or further vote. The current debate over defining Brexit is at the blue, indigo and violet end of the spectrum.

To be able to see a rainbow depends on perspective. In the morning, they will appear towards the West, in the evening to the East. The phenomenon results from the sun being behind the viewer, its light being dispersed by water droplets. As the viewer moves towards the rainbow the end seems to move further away, not unlike the political scenario as we potentially reach the end of the day as an EU member.

The current dispute seems to centre on whether or not we should leave with or without a Withdrawal Agreement. Boris says that means Brexit, Farage doesn’t agree.

So how can we define Brexit?

If we go back to Theresa May, her focal point was “control of our money, laws and borders”. Some will have different views over levels of control. Another angle that might follow in a quest for a definition could include the question ‘when?’.

As a reminder, the process of leaving the EU started with a referendum in which the electorate made a choice, to leave. The process is governed by the EU club rules, specifically Article 50 of the Lisbon Treaty.

We have seen that the process allowed for two years, subject to extension, to negotiate terms of exit. Failure to agree would mean leaving on WTO terms. Extensions mean that as we have moved closer to the rainbow, so the ends seem to have also moved.

Boris has pledged that there will be no more extensions. If the election allows him to stay keep that promise, the Article 50 period comes to an end on 31st January 2020. If by that date either the WA is ratified, or Article 50 has lapsed, then it can no longer be revoked under EU law. To regain membership, a new application has to be made under new terms (under Article 49) with many more impositions.

The UK will have left the EU. However, the UK will not have full “control of our money, laws and borders” – yet. Boris might be right but so too might be Farage.

Under the WA, the UK leaves with a transition period, guided by the Political Declaration, the latter not being (totally) legally binding. The current target for an end date is 31st December 2020. During that time the UK and EU can trade on existing terms with a view to completing a new free trade deal. If all goes to plan, then 1st January 2021 would see a cleaner break, with the exception of exporters to the EU27 meeting their standards.

Farage advocates leaving, as some would say without a deal. That would mean trading on WTO terms immediately when the Article 50 process comes to an end. He has suggested that his leaving date would therefore be the end of May 2020. To achieve that, the EU27 would have to agree a further extension of Article 50.

As a part of the Brexit Party launch campaign, Farage and his team have highlighted where, under the WA, the UK does not have complete control. He has further complicated the scenario by emphasising the suggestion from Michel Barnier that it would take at least three years to complete FTA negotiations. Hard for some to believe, given current close alignment and the recently completed CETA template.

There is an obvious contradiction that might be explained as the opening less well directed salvoes of an election campaign. However, he is correct in saying that there is not complete “control of our money, laws and borders” until the conclusion of Article 50 and/or, if ratified, the transition period.

Just for a moment, assuming that public utterances from the leading UK figures genuinely reflect the positions that will be adopted when candidates are administratively finalised, the differences would appear to be Brexit by one definition on 31st January 2020, not by the other definition until 31st May or 31st December 2020 depending on whose decision, possibly with consent of the EU27.

The comparative envisaged end dates, between Boris and Farage are from four and seven months, unless the real world gets in the way. The material difference is whether or not we ratify the WA.

So what of the real word?

Naturally, the first consideration is the EU themselves. We know that they have agreed to the WA. Would they agree to the Farage suggestion to delay a further four months? This is subject both to conjecture and political will on both sides.

Farage seems to give credibility to Barnier over the time scale for FTA negotiations, Boris sees “no reason whatsoever” that such negotiations should be extended beyond December 2020. Barnier may be right, on the other hand, he could be laying down the foundations for a negotiating stance.

Perhaps Mr Farage will come to explain why when the EU27 will not agree for three years, they will agree within a five month extension? Does the answer lay in GATT Article XXIV?

On money, the UK would be bound to the conditions first formalised by Article 109 and Protocol J of the Maastricht Treaty with regard to overall policy.

Yes, if we leave without the WA, there is a strong argument, endorsed by House of Lords select committees, that the balance of the divorce bill does not legally have to be paid. There is a moral issue as to whether the UK should honour terms agreed in the EU budget cycle to the end of 2020.

During the transition phase, if there is one, of course the UK has no say in laws that the EU might pass. If the transition period does in fact end after December 2020, then in theory, subject to any FTA, those could be repealed by a British government in 2021. In any event, to export to the EU, goods will have to meet EU standards. EU businesses would also need time to adapt.

Whether or not the EU would agree to invoke GATT Article XXIV in the event of a trade deal not being agreed by the end of 2020 is open to conjecture. The same criterion applies if the UK leaves with “no deal” after 31st January 2020. A flip side to the coin is that when free to negotiate FTAs globally, the bargaining hand of the UK could be argued to provide extra leverage in a fair deal with the EU.

When it comes to borders, of course the UK is outside the Schengen area. The difference between both sides of the Leave debate becomes that seven month period for free movement within the EU.

Similarly, fishing may be subject to the same time scale, subject to what may have already been agreed for 2020 under EU and international law. More clarity is needed.

The same applies to other issues. Is seven months enough for the EU to formalise military structures, at least sufficient to invade, for example, Montenegro, Egypt or China? If invaded, of course NATO is more relevant.

There is the question of Northern Ireland too. Boris would argue that the WA provides the country with the best of both worlds, having a foothold in both the UK and EU. There is no formal representation at EU level. There are extra barriers, however minimal, on trade between northern Ireland and the UK mainland.

A host of other issues need to be explored; security, policing among them. Some provisional arrangements have already been negotiated such as haulage.

Voters will come to their own judgement on whether they want to shut one door before others open. Boris can claim to leave four months or more sooner, Farage can claim to leave seven months or more sooner.

Ultimately, the strength of the UK hand will depend on parliamentary arithmetic. Events since 2017 have shown how weak a negotiating position can be when a handful or nonconformists can delay, obstruct and derail a government’s policies.

The irony is that by each colour seeking to appear too strong, the blues, indigos and violets may yield their pots of gold to the rest of the spectrum. Leave might be six months down the road under Corbyn, it might be never under him or any form of coalition.

Leave means leave – or does it?

This post was originally published by the author on his personal blog: https://www.rexn.uk/2019/11/06/rainbows/

About Rex N

Profile photo of Rex N
Rex is a freelance writer in medical affairs, economics and sport. A former teacher and examiner of Economics, his interest in European Union affairs took root when discovering the depths of the Maastricht Treaty. He is a committed democrat having campaigned for a popular vote to decide on further integration measures, based on fact rather than spin.

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One comment

  1. The big problem is that since the zollverein and the unification of Germany it has been understood that economics can be used to force the unification of states. The process is: customs union, common market, single currency, full political union. This means that a Customs Union is unacceptable because it is just the first slide on a slippery slope.

    If we can only get Brexit with a transitional period and some longer term interference in UK affairs by the EU we should do it. Personally I would prefer a clean break, tariff free trade is not as essential as academic economists make out.

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