A new year of Brexiting

The arrival of 2022 has brought both continuity and change to the UK’s relationship with the EU.

The resignation of Lord Frost in December has precipitated a major reorganisation (possibly still on-going) of the government’s management of EU and Brexit affairs, but the new point on the relationship – Foreign Secretary Liz Truss – has very much stuck to the same talking notes on the Northern Ireland Protocol as her predecessor.

The reorganisation starts to break up the significant collection of roles that Frost had built up in the past couple of years, probably more because of his proximity to Boris Johnson than through any conscious project of coordinating the multiple aspects of the work.

The move of the bilateral relationship out to the FCDO fits with a more natural model of diplomacy, and normalises EU relations as just part of the furniture, but it comes with a number of real challenges for Truss and her junior minister, man of letters Chris Heaton-Harris (who is presumably going to be even more delayed with that book).

Firstly, WA and TCA implementation covers a wide range of departments’ activities, so lots of coordination will be needed. Secondly, Johnson will retain a big interest in the portfolio, so handling the FCDO-No.10 connection will also need much attention.

The work on borders and on ‘Brexit opportunities’ is still up in the air; as Jill Rutter well argues, each could be well snaffled up by other departments, either as an on-going whole or in parts. That this remains unaddressed in the near-month since the FCDO move suggests stasis is the more likely option, given the limited shelf life of each project.

The graphic below summarises the changes and we’ll come back to it as anything happens.

On the continuity front, the switch from Frost to Truss has also seen the continuing ambiguity about how hard the UK wants to push to close the Protocol negotiations with the Commission. The initial contacts with the latter seem to have been couched – again – in terms of getting things sorted ‘as soon as possible’, rather than to any fixed timeline.

One question that lingers is that of whether the continued threat of using Article 16 carries either any weight in Brussels or even any seriousness in London: certainly, it has the air of being ritualistically waved about, rather than being ready to go.

I’ve discussed this question in the newest episode of A Diet of Brussels, and didn’t really come to a clear conclusion, mainly because the increasingly wounded Johnson might still go either way on this. Invoking Article 16 might be a way to rally the party to his cause once more, but it also risks making the ‘doneness’ of Brexit even more open to question.

So all still to be settled then.

Just like last year. And the ones before that.

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More Brexit, part. 648

As we’ve noted previously in this blog, Brexit is a process, not an event. With the drawing in of the year, we might usefully revisit this notion, since there’s more of the process heading our way.

You’ll recall that one side-effect of the very speedy conclusion of the Trade & Cooperation Agreement (TCA) was that the UK decided it would have a progressive introduction of the controls required, given the need for infrastructure and personnel to make it all happen.

The original plans for this were rather swift, with the intention being to have everything up and running by mid-2021. That this was somewhat ambitious was highlighted by two subsequent announcements of further delays, some to 1 January 2021 and others to the middle of next year.

These deferrals of controls stand apart from those relating to the Northern Ireland Protocol, which required joint agreement with the EU and which are currently on a rolling extension due to the talks that have trundled on in the past weeks. Precisely because they have implications for the operation of the EU’s single market (via Northern Ireland’s alignment to it) these cannot be solely in the hands of London.

But the TCA deals with the general EU-UK relationship, and the reintroduction of controls is a function of the weakening of ties between the two parties, which means the UK is bound to enact measures to satisfy other legal instruments, of which the World Trade Organisation is predominant.

Technically, the UK is in breach of its WTO commitments with these deferrals, but in practice no-one seems minded to challenge that. The UK is on a path towards enforcement, it has lacked the means to enforce until now, plus the EU doesn’t need another point of contention to add to the pile, plus WTO arbitration takes a very long time. So it’s been alright to slide back the timeline.

However, this still matters.

The National Audit Office has been producing very useful reports for the past three years on UK readiness, including on these systems. The most recent came out last month and is worth a read as a balanced view of where things are at.

On these elements, the picture has gradually improved, with much of the work now in place to make 2022 enforcement a viable option. At the same time, the NAO rightly points up the considerable uncertainty about demand management and the impact on trade flows, plus the wider impact of the changing nature of the UK border.

While Northern Ireland has (rightly) been more visible, it will be cross-Channel business that will have a bigger economic impact in the long run. Until the UK has settled its systems and procedures for this, it will be hard to know more properly how Brexit is reshaping the economies on both sides of those waters.

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High- and low-stress holding models

Learning to blah, blah, blah (Source)

A while back I wrote about the UK’s approach to the Withdrawal Agreement (WA) and Trade & Cooperation Agreement (TCA), arguing that this was driven by a lack of strategic intent, resulting in constant efforts to keep things up in the air.

In so doing, the UK aims to avoid falling into any settled pattern of interaction with the EU that would – by the simple facts of its existence and stability – provide a template for future relations.

Put simply, the UK doesn’t seem to want to find itself stuck in a rut, with all the path dependency and sunk cost issues that come with that.

At the time, the way the UK was pursuing this objective of intentional instability was through a high-stress holding model.

This involved an active campaign of raising problems with the treaties (both on what they contain and what they don’t contain) plus non-implementation (or at least very slow implementation).

Hence the seemingly endless list of problems that could be drawn upon, from the role of the CJEU to VAT rules. The spring’s challenges of chilled meats in Northern Ireland might have been met by the Commission’s proposals this autumn, but the UK had already run on ahead to the next thing.

This coupled up with very strong language about using provisions such as Article 16 of the Northern Ireland Protocol, to attempt to create an image of being ready to walk away from it all, for the noble intent of protecting peace.

A review of this model suggests that while it might have nudged the Commission to offer more than it might have on the Protocol implementation problems, it has largely not worked and has little prospect of working.

At the root of this failure has been a lack of conviction on the EU’s part that the UK would make good on its promises/threats. Yes, the WA/TCA combo has its problems, but these are as nothing to the costs of pursuing any other route. The UK can’t unilaterally change the terms of the treaties, and the economic and political damage of collapsing them both (and the EU has been very clear that they are a linked pair) should be evident to even the most die-hard Brexiteer.

If the UK doesn’t have a credible alternative (and also doesn’t have a hard consensus that it thinks it has one), then the threats look empty and the main effect is simply to weaken trust. Which is a problem if you’re aiming to get buy-in to any new system you might propose.

Hence the apparent shift in the past couple of weeks to what we might term a low-stress model.

Instead of the active antagonism, there is instead engagement in negotiations, covered by a rhetorical frame of trying to solve problems together.

However, given the very slow pace of those discussions, it looks more like a move to kick things into the very long grass of endless debate.

Yes, there’s interaction, but it also allows for a ‘temporary’ suspension of punitive measures and of full implementation of treaty provisions. In short, it creates its own version of the stable situation trap: the UK gets to say in 6 months that obviously these temporary arrangements work.

Of course, the EU is well aware of this, and is looking to move negotiations to some conclusion in short order. But the ability to combat this low-stress approach is rather less. The Commission might have its spectrum of responses in place for an Article 16 notification, but it’s much harder to avoid looking ungenerous when faced with a counterparty that wants to talk.

But it’s not impossible, and at some point it becomes difficult to mask that you’re stringing out talks for their own sake. Even if that means a less fraught outcome than a collapse of the high-stress model, it still leaves the UK having to make a decision about what it wants. And there’s still no sign that it has any sense of achieving that under this government.

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WA/TCA Committee Tracker, November 2021

As part of this blog’s ongoing monitoring of the two treaties, we regularly produce a tracker of meetings of the various bodies that they have set up.

These trackers are useful at a number of levels.

Firstly, the level of overall activity provides an indication of the vibrancy of the treaty and the extent to which the parties see it as the appropriate forum for handling issues: witness the volume of activity in the Withdrawal Agreement committees in the wake of its entry into force, to try to iron out the numerous implementation issues, most obviously on the Northern Ireland Protocol.

Secondly, the speed of setting up specific bodies points to relative priorities within the treaty framework. Thus the Trade & Cooperation Agreement – with its numerous organisational structures – has only one body that’s meet more than once: fisheries.

Finally, over time, it helps us to see how the pattern of moving from initial implementation issues to more regular operation works in practice. If the WA appears to have started to move towards the latter phase, with minimal activity this autumn, then the TCA is still very early on in its life-cycle, with much still to come into operation.

In the context of the wider EU-UK relationship, this matters, especially given the on-going uncertainty about the Protocol – and thus the entire WA/TCA architecture. If the UK were to unravel the Protocol with an Art.16 notification then the two treaties lack deep institutional roots that might help to contain the ensuing crisis. Even the WA hangs somewhat in the balance given the integral nature of the Protocol.

Of course, Art.16 would make these trackers a trailing indicator for the period of the crisis, but if the treaties were to stand, then they might also eventually come to be leading indicators of a rebuilding of relations.

Something to keep in mind in the coming months.

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Crisis measures

As we reach the end of the COP26 hiatus on Brexit the signs are not good. Reports from the talks on the Protocol are that progress isn’t occurring, even with the Commission’s striking opening offer.

This is all less than unexpected: the UK’s ask on ending the role of the CJEU in the Protocol never looking remotely viable and there has been no interest in using the Commission’s proposals to climb down from the flashpoint either.

COP26 might well have given a bit of breathing space, but only to something that looks heavily timetabled.

With that in mind, the moves on the EU side have mostly been about signalling intent to hit back hard should the UK follow through on Art.16. As Rahman has suggested, that might include both short- and long-term elements.

We’ve covered Art.16 itself enough for the issues to be relatively clear. As Howse points out in his new commentary on the provision, there’s rather more constraint than might first be apparent, but this also limits the direct response too.

As a result, it serves the EU to keep things broad-based, to make the matter less contained and to be less dependent upon the single provision.

There is plenty of flexibility about the implementation practice for both treaties, as the French had already identified in the Jersey impasse (also still not resolved, it should be noted), but the TCA also allows for some additional actions.

The graphic below sets out the suspension and general termination clauses for that treaty.

As you’ll see, suspension is more complex and requires a rather tough case to be made for justifying its use, based on a failure by the UK to apply rule of law. Art.772 doesn’t simply need some evidence of this – e.g. should the UK try to effectively remove the CJEU from the NIP – but also needs this to be a ‘serious and substantial failure’. That the CJEU hasn’t been used at all so far in the NIP’s operation becomes here a problem for the EU, as impairment of rule of law becomes that much harder to demonstrate.

Even if you can overcome these thresholds, there’s still a problem of proportionality requirements, which stop the EU from going wild with their response.

By contrast, Art.779 termination is a doddle: just put in your letter of notice and that’s that. There are even options to just terminate Goods or Judicial Cooperation, so there’s a bit more flexibility.

The process in this case would be entirely political, with the option to end the termination by joint consent.

I’ll admit to a degree of discomfort about all this. If the UK play chicken on this, then we end up with at least a partial non-application of the WA/TCA framework, which will make it harder to defend what remains. Trust will be even thinner on the ground than it has been, and the willingness to even start to consider new options will be vanishingly small.

Which makes the key question next week one of whether the UK really wants to go down this road. It will be one that offers minimal prospects of the EU moving off its lines on the Protocol, while definitely bringing a pile of economic and political pain. Yes, that pain will hit both sides, but much more on the UK.

Is the domestic political gain that might accrue really worth it?

Ironically, the continuing absence of a UK plan makes it seem more likely so: if you don’t have an end-point to defend, then you can wallow in the pain that much more easier.

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What the Jersey fish tale tells us about the TCA

Today sees a meeting between British and French ministers to discuss the vexed question of fishing licences for Jersey waters. This event is important for a number of reasons.

Firstly, it’s the pathway that got opened up earlier in the week by the French decision not to move to unilateral sanctions over the issue, so that’s a positive development for talking through problems rather than laying down more harsh rhetoric (as both countries have been doing of late).

Secondly, it’s a reflection of the outsized importance that this issue has acquired over the past weeks, compared to its economic (or even its symbolic) value. This is a reflection of the wider low-trust environment that the UK operates in with both France and the EU.

But finally, it’s also the first time that the UK will have secured a bilateral meeting with an EU member state to discuss provisions of the Trade & Cooperation Agreement (TCA). The rigour of keeping to the Commission as the interlocutor on such matters has been exceptional and even the very particular nature of the matter might give others some pause for thought, not least Ireland.

In this context, Jersey might turn out to be an important demonstrator of things to come, even if the practicalities involved are somewhat mundane. Given that this is all a sideshow to the looming return of Article 16 – which is a very much bigger problem – we might loose sight of this rather quickly, especially if a deal can be worked out.

However the entire episode has also underlined a number of issues with the TCA that are likely to be repeated down the line.

Most obviously, the situation seems to have stemmed from different interpretations of Art.502(1), which requires that historical access to Jersey waters ‘can be demonstrated’. The necessary level of proof is not specified and this appears not to be a practice that can draw on any significant international law: littoral states that break-up and that divide their waters between successors tend not to offer on-going access at all.

The UK government took a rather firm line on all this, asking for GSM traces and the like, something that smaller French boats couldn’t provide because they don’t carry that kind of equipment. As have been pointed out elsewhere, this was a technical issue that was allowed to escape into chancelleries, with all the additional costs that’s incurred.

The vagueness of the provision is only underlined by Art.502(4) which allows for the entire arrangement to be changed without a full ratification process, suggesting this was at best a stop-gap. Perhaps this also explains the noticeably more constrained and proportional range of remedial measures that can be applied in the event of alleged non-compliance (Art. 506(2)) which means that even if the French had been able to convince the Commission to start on this – already a very big uncertainty – then remedies wouldn’t have stacked up to much.

Again, given the more general reading of the TCA – with its multiple dispute settlement mechanisms, regular reviews and termination clauses – this argues that this set of provisions wasn’t fully nailed down, so minimising contagion made more sense.

We can rehearse the reasons for the hurried nature of the TCA’s negotiation, formulation and ratification and who’s at fault for what, but ultimately none of this changes the situation as the parties find it now.

Indeed, it is this aspect that more forcefully comes back to Northern Ireland and the Protocol.

The UK narrative of late has been one of negotiating the TCA during a period of ‘extreme weakness‘, a bold claim given that ratification only came after the landslide of the December 2019 general election. That aside, the Jersey issue has risked playing into that narrative framing, even if it is within the current text and very much smaller. France does have a presidential election on the way, but it also doesn’t want to be the one to crash the already-beleaguered relationship. Hence the Commission’s refusal to accede to French demands to launch measures under Art.506.

If there is a silver lining, then it was the British protestation that French actions would result in the UK bringing proceedings under the TCA’s dispute settlement mechanism. The rhetoric of the need to stick to the provisions of the treaty raised some hollow laughs elsewhere, after the Internal Market Bill and the suggested use of Art.16 to remove the CJEU from the Protocol, but it does show that there is a logic available to working with what you have.

Unfortunately, it has also underlined very clearly that there is a very long road to travel before relations across the Channel can get back to the level they more usually enjoy.

 

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Making sense of the UK’s approach to the Protocol

Just a short post this week, since I already wrote about this in a Twitter thread earlier in the week:

The thread was an attempt to make sense of what the UK is doing and whether it might work. As you’ll see, I’m not that confident that it will. Conversations with people on both sides this week haven’t changed my mind on that either.

Part of that is the low trust environment that exists. The number and quality of connections that the EU has with the UK are both relatively low, which means there are fewer opportunities for the kind of frank discussions that might find a way through the current impasse.

As a result, the weight of rhetoric (on both sides) increases in the calculation.

To take an obvious example, the unwillingness of the UK to publish its replacement text for the Protocol makes it impossible to work out a more dispassionate understanding of its needs, so we have to fall back on the words of Lord Frost or Boris Johnson, with all the additional complexities that brings.

Even if the Commission proposals last week do leave various points to be precised and elaborated, at least they work more transparently towards a new set of agreements (or implementations of existing agreements, to be more exact).

This shouldn’t be that surprising – I noted in evidence back at the start of the year, for example – but that doesn’t change the situation as we find it.

Rebuilding contacts and conversations is going to have to be a priority if things are to start to improve between the EU and UK, and it’s probably the UK that has to start that.

I’d not hold your breath right now.

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Reworking the Protocol, or just trying to make it work?

This week has seen the full return of the Ireland/Northern Ireland Protocol to political agendas, after a lull during the UK’s party political conference season.

Last night saw the publication of the Commission’s extensive proposals on enabling the implementation of the Protocol, following much consultation both within the EU member states and with Northern Irish stakeholders.

That had been somewhat pre-empted by the Lord Frost’s speech on Tuesday, which were taken as a rejection in principle of those proposals, given the more fundamental problems around the Protocol’s operation.

In particular, Frost spoke of the collapse of Unionist support and of the need to remove the EU’s Court of Justice (CJEU) as the ‘ultimate polic[er]’ of the treaty.

As explained in the graphic below, the CJEU is incorporated into the Withdrawal Agreement in two ways. Temporarily, it discharges all outstanding cases before it, including those brought during transition, and offers a time-limited route for handling Citizens’ Rights cases. Permanently, it has a role to provide definitive rulings on matters of EU law that arise from disputes and from the operation of the Protocol in Northern Ireland (the sovereign bases in Cyprus too, not that this seems to be a live issue).

That permanent role is a function of the basic model of the Protocol itself: Northern Ireland is effectively an extension of the EU’s single market and customs union, and each of those is made up of rules set by the EU. Therefore, to ensure uniform interpretation of those rules (needed to make either element meaningful), you need to have a single ultimate court to decide what’s what.

In short, as David Allen Green rightly notes, if you want to remove the CJEU, then you want to stop Northern Ireland being inside the single market and customs union, which is a fundamentally situation for the region, and one that isn’t compatible with the Good Friday Agreement.

However, the UK seems bent on pushing this point, and Frost once again reminded the EU that it considers it has grounds to invoke Art.16 of the Protocol. I’ll refer you back to previous posts (and podcast) about why this isn’t likely to solve anything.

The second graphic (which you can read in conjunction with this one) works through a related issue, namely how use of Art.16 might lead to other responses.

Route one will be within the Article itself, since the other party is given the right to make appropriate rebalancing measures: these would be not only a prompt response, but would also limit escalation.

But the Article sits under the WA’s dispute settlement mechanism, and there’s a link through to the Trade & Cooperation Agreement, should the matter not be resolved and remedies of the arbitration panel not be applied.

Admittedly, this is a set of very big steps, and slow ones at that, but it’s useful to remember that legally, as well as politically, the Protocol has the potential to rewind the entire system of EU-UK relations. That might serve the agendas of some in London, but it’s hard to see how anything on better terms for the UK might then ensue.

This is then the bigger point from this week’s exercise: things might not be working well, but sitting down and trying to find a collaborative solution might be the least worse option for all involved. Whether the UK climbs down the Commission’s ladder is still unclear, but we should expect much contagion of the relationship if they don’t.

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The long way down

This post originally appear on Encompass Europe.

This is a good moment to reflect on one of the many paradoxes of Brexit: for something that has occurred under so much time pressure, there has always still been a summer break.

That was true in 2017 and 2018 during the Article 50 negotiations and even last year, when Covid and a British government unwilling to add to the transition period might have been cause to break the pause.

So this summer’s hiatus – whether paddleboarding in Cyprus or not – has not been much of a shock, especially with the conclusion of active negotiations on the basic treaties of the EU-UK relationship.

But this is to miss the bigger picture, namely the continuing instability of that relationship.

Brexit was always going to be a long-term process, for a number of reasons. Most importantly, the depth of the entwining of British political, economic and social structures with those of the EU and its member states over the previous half-century was not something that could be unpicked in anything less than a generation.

The depth of that entanglement was long a bugbear of the eurosceptic movement in the UK, particularly those who wanted nothing more than a ‘common market’, but it is only now that the full extent of it has become apparent to most people.

That some of that was actually generally well-thought-of – such as the enrichment of the typical British supermarket shelf with European produce, or no-cost roaming for mobile phones – is neither here nor there, even if it does explain some of the cries of ‘that’s not the Brexit I voted for’.

However, disentanglement is one thing. Much more problematic is the question of what comes in its place.

As has always been the case in post-WWII British European policy, the purpose of the relationship with the rest of the continent has been less than settled. The historic model of a balance of power seemed less than relevant in the wake of the end of the Cold War, even as the tropes of the ‘special relationship’ and ‘global Britain’ have pulled successive generations of politicians towards visions of a much grander role. Europe, and by extension the EU, has been a problem to be managed, rather than an opportunity to be grasped.

Brexit has simply put this issue in a much more prominent position. Yes, the UK wants to move apart from the EU, but without deciding on why it wants to do, or how.

As much as the twin treaties of the Withdrawal Agreement and the Trade & Cooperation Agreement have set up some parameters, it is striking how much they leave to be decided down the line.

The former’s Irish Protocol remains in a very uncertain place in a period of fluid Northern Irish politics, while the latter’s framework for future cooperation is more hung up on the ever-lengthening transitional and grace periods being applied. As I’ve noted elsewhere, the TCA is more about potential than reality.

Crucially, neither treaty is unambiguously accepted as the definitive basis for relations. This goes beyond the continual (and unjustified) rhetoric of the British government about signing under a degree of duress, to the multiple active elements of the TCA that both sides agreed could be pushed down the line.

This is partly a function of the hurried nature of the negotiations, but more fundamentally it is a result of the negative-sum nature of the withdrawal: no model of leaving the EU would fail to generate costs, so the process has been one of allocation. The only real questions have been how honest everyone would be about those costs and how publics would react when they found out.

Sadly, the answers are respectively “not particularly” and “not very happy at all”. Rhetoric is one thing; empty shelves are another.

All of which suggests that rather than representing the new baseline for EU-UK relations, the current situation is more likely to be a staging post towards further deterioration.

This autumn will see a number of tests of this. While the introduction of UK customs controls has been pushed back once more, the Irish Protocol issues are set to kick back in, along with potential legal challenges by the EU. The cross-cutting impact of Covid on labour and goods supply will also increase pressure.

Even where there are solid reasons to renegotiate parts of the treaties, this is now bound up in the bigger problem of neither side wanting to reopen that they do have in legal terms, both for fear of what else might get reworked and from a strong desire not to repeat the psychodramas of 2016-20.

What is unclear right now is what it will take to stop things worsening even further. Perhaps some joint sense of mission through COP26 this winter, perhaps a new government in London, but the message right now is that this is going to get worse before it gets better.

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Tracking EU-UK meetings

At various points in the Brexit process I’ve produced trackers, primarily to capture interactions between the EU and the UK. that included ones for the negotiations on the Withdrawal Agreement and the Trade & Cooperation Agreement (and this), as well as the progress of UK enabling legislation.

The aim has been to keep sight of developing processes, where that might reveal as much as the outcome.

This is of more salience now that the two treaties are in force, since it will be their operationalisation that matters, especially in the context of how each side see the question of any renegotiation. Failure to engage in the agreed structures might be a leading indicator of rising pressure to reform the system, and/or a marker of good faith efforts (depending on which side you stand on).

With that in mind, I’ve been running two trackers for the numerous bodies of the two treaties since their entry into force. Data comes from the comprehensive resource on the Commission website.

As you can see below, the WA has seen very much more activity, partly because it’s been in force longer, but also because its text left a lot of critical matters to be resolved by the Joint Committee. The Irish Protocol has been a big driver of this, but so too have been the demands relating to citizens’ rights (as registration periods come to an end) and other matters.

By contrast, the TCA has been very slow to get moving, institutionally. That might be understood as a function of the more slow-burning nature of its content, but the failure to meet the intended quarterly meetings of the main Partnership Council is essentially political: the WA has crowded out the agenda on this.

In any case, I’ll be continuing this work for the next few years, since it might highlight shifts ahead of the consent vote on the Protocol in 2024 and the general review of the TCA the following year.

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