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Artillery Row

A “no deal” Brexit is not an “Australian deal” Brexit

The Withdrawal Agreement seriously constrains a sovereign UK’s room for manoeuvre

When a breakthrough in the Frost-Barnier talks is announced and Boris Johnson proclaims that the outbreak of common sense and fraternity was made possible because of his unflinching determination to walk away from negotiations back in mid-October, there will be many Brexiteers who will self-isolate from the contagion of relief. They will see a deal as the extraction of defeat from the jaws of victory.

After all, what these Spartans had wanted all along was what the prime minister branded “Australian terms” –  a “no deal” outcome with the EU that allowed the UK to trade with its neighbouring economic bloc on WTO rules and, in doing so, escape the regulations of the European Commission and the ultimate jurisdiction of the European Court of Justice. This was Brexit as it was meant to be: the United Kingdom as an outward looking nation whilst remaining as sovereign over its own laws and freedom of action as Australia.

In reality, this option has not been available since the moment Theresa May conceded the imperative of there being no customs posts at the border between Northern Ireland and the Irish Republic. Even keeping all of the UK in the EU’s customs union and being effectively prevented from negotiating independent trade deals with other countries was, in her mind, preferable to a “borderless” Ireland. Was she aware that the Good Friday Agreement made no such stipulation? On this, as on so much more, she was not forthcoming.

May came, saw, and crumbled. But the Australian option was brought no closer when her successor unpicked some of her handiwork. Boris Johnson concluded the Withdrawal Agreement and its Northern Ireland protocol – an international treaty governed by EU law to which the UK will be subject when the transition period ends on 1 January. The arithmetic in the Bercow Parliament gave him little room for manoeuvre at the time, although he sought to convince Eurosceptic Tory MPs – and perhaps himself – that it was a stopgap to get the government, and Brexit, out of a jam. With fingers crossed behind his back, he hoped something might yet come to the rescue.

The failure of the EU to offer significant concessions might be regarded as that something. But the curious reality is that bad faith, the absence of best endeavours, or however the spirit in which much of the negotiating process may be described, has not convinced the British government that the Withdrawal Agreement serves only a defunct purpose. Even if there is no trade deal between the UK and EU and the “limited and specific” incursions envisaged by the Internal Market Bill are enacted, the Agreement will continue to be legally enforceable. The British government has repeatedly confirmed that it is not going to abandon the Agreement and that the Joint Committee charged with ensuring its implementation will continue to meet.

That Agreement constrains the UK’s sovereign rights in two related respects: first, because it keeps one of the four constituent parts of the UK, Northern Ireland, in the EU’s single market and, as such under the regulatory remit of the European Commission and European Court of Justice; second, because Northern Ireland’s annexation by Brussels has consequences for the ability of the rest of the UK to act with the latitude of, say, Australia.

The British government has repeatedly confirmed that it is not going to abandon the Agreement

These consequences are clearly laid out in The Australian Deal: Another Impossible Dream just published by the Centre for Brexit Policy, a cross-party pro-Brexit think tank chaired by the former Northern Ireland secretary, Owen Paterson.

The way in which the Withdrawal Agreement moves the customs border from demarcating Northern Ireland from the Irish republic to separating Northern Ireland from the rest of its own country is, at least, beginning to be more widely understood. British goods passing between these two parts of the same country will be liable to EU tariffs unless it can be proved their end destination is the province. When there is no checking their passing through an un-patrolled border, proving that they are not just being processed in Northern Ireland and that there is no possibility of them being driven south of Crossmaglen will not be easy.

The Withdrawal Agreement stipulates that Northern Ireland, as part of the EU’s single market, is subject to EU state aid rules. This is a Trojan horse. A supposedly sovereign Britain may struggle to demonstrate that subsidies directed at entities on the British mainland can exist in isolation to their trading links and presence in Northern Ireland in ways that could not constitute an illegal advantage over the province’s co-single market partner in the Republic of Ireland.

Northern Ireland, as part of the EU’s single market, is subject to EU state aid rules. This is a Trojan horse.

There may be a natural temptation to imagine the rules would not be interpreted in so expansive a fashion. But the Withdrawal Agreement established that its arbitration procedure (in which the European Court of Justice is the final arbiter) governs disputes concerning state aid. This is a key respect in which the UK would not be operating on “Australian terms” because were it to do so, the dispute process would enjoy the WTO’s neutral arbitration.

Of course, the EU’s annexation of Northern Ireland may not prove permanent. After four years of operation, Stormont gets to vote on its prolongation – although the pressure to preserve cross-community and cross-border harmony will be applied with maximum intensity to ensure that renewal is not in doubt. But assuming, for the sake of argument, that the Protocol only applied for the next four years, that would still seriously limit the freedom of action of the UK in economic and international affairs.

The most obvious example is in how difficult it makes concluding free trade agreements with other countries who do not have FTAs with the EU (Australia, for example, or the United States). Such countries would have to not only agree to the British government’s terms but those of the EU for Northern Ireland. If these countries have not thus far been able or willing to reach a deal with the EU, why would they meet EU requirements just for the sake of gaining access to Great Britain and Northern Ireland in addition to accepting the terms required through reaching agreement with the nominally sovereign Great Britain? It is not unimaginable. But it takes some imagination.

As The Australian Deal: Another Impossible Dream makes clear, attempting to reject the Withdrawal Agreement and Northern Ireland Protocol “after 31 December will be highly problematical if the government has already agreed some form of limited deal with the EU.” The only way out is to call off the efforts to find a deal now and – additionally – to void the Withdrawal Agreement in consequence. The EU has no interest in re-writing the Agreement so it really is a case of implementing it or concluding it was all a mistake to begin with.

That conclusion too, comes with consequences. It would bring a measure of international opprobrium from foreign governments (and from some closer to home) who have not been disabused of the fact that the Good Friday Agreement makes no mention of removing border controls between Northern Ireland and the Republic of Ireland. At Westminster, some politicians who will express the greatest horror at ending the Withdrawal Agreement were those who did their utmost to box Boris Johnson into the corner that resulted the Agreement being so one-sided in the first place. The irony of their culpability, doubtless, will be lost on them. But as it stands, even a “no deal” Brexit would keep the country constrained by the deal it has already struck. They do it differently in Australia.

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