The UK's Brexit options at the end of June 2018
Jean-Claude Piris / Jun 2018
It is the end of June 2018, just nine months before the date when the UK will leave the EU. The 28-29 June European Council will not progress much towards a reasonable Brexit. Actually, 15 months after having taken the bold decision to start the negotiations without any preparation, while knowing that they are limited to 24 months by the EU Treaty, the British Government is still negotiating internally. A cabinet meeting on 6 July is said to be important in that regard.
According to many « Number 10 » observers, the option which could be defended by the Prime Minister in that meeting is as follows.
The aim of Mrs May seems, at last, to get a reasonable result for the British economy, and thus to avoid not only a no-deal leading to a catastrophic cliff-edge, but also a bad deal which would cut the UK from the EU Single Market (SM).
The issue of the Irish border is now considered by HMG to be a leverage which could help to get that result. After all, it is on that issue that the EU accepted to bend its principles in December 2017. The EU said that, given the major aim not to re-establish borders between Northern Ireland (NI) and the Republic of Ireland, it could accept that NI continue to stay in the EU Customs Union (CU) and to benefit from the SM. This option would permit to avoid controls at the border. This was refused by the UK, for symbolic-political reasons.
According to observers, the UK would now request the EU to extend its offer to the whole of its territory. The UK would accept both to remain in the CU and to commit to a full alignment on the relevant rules of the SM. According to the same observers, this would neither apply to services nor to movement of persons.
It is not clear if the membership of the CU would entail the benefit of the Common Trade Policy, thus excluding a separate trade policy: that would seem logical, and would certainly be the EU’s position, despite some British Ministers being opposed. It is also uncertain if Mrs May’s idea on the SM would include all rules, principles and procedures applicable to the EU member States and thus the automaticity to follow EU law and the role of the EU Court of Justice on interpretation and on settlement of disputes. Some British ministers are clearly opposing that as well.
Mrs May will thus, certainly, have difficulty to rally all her Ministers around these ideas. But the actual question is to know if such a result would be negotiable with the EU.(I already wrote about those ideas in the Financial Times on 16 November 2017).
First, acceptance of an exceptional solution benefiting a small territory, subject to extraordinary circumstances, cannot be understood as accepting a general exception applicable to any State, regardless of their dimension and of the existence or not of extraordinary circumstances.
Second, these ideas show that the British government might hope to retain partial access to the SM with the same benefits as member states, simply by promising to align its domestic law to relevant EU law - perhaps under the control of a tribunal which would not be the EUCJ. This hope is based on a misunderstanding of what the SM is. A third state cannot get partial access to the SM under the same conditions as EU or EEA states without being bound by the same constraints. This is not because of bad will on the EU’s part. The EU has no choice but to protect its major success, which binds together all its members: the homogeneity, credibility and legal security of its SM. The European Council will be united in refusing to put the SM’s credibility in jeopardy.
The SM is based on four freedoms: the free movement of goods, services, capital and people. Choosing among these is not permitted. Whether the EU would make an exception for services is doubtful. As for movement of people, an exception will certainly be refused. How could the EU admit that its ideals are for facilitating freedom of movement of goods and capital but not freedom of movement of citizens?
Second, even for goods, the SM is far from only being an area in which customs tariffs and quotas disappear. It aims at getting rid of all regulatory obstacles to exchanges. It binds participating states to strict conditions. These include norms and standards for goods, the primacy of EU law over national laws and the exclusive final power of interpretation by the EU Court of Justice. Control of timely and full implementation of EU law is not only done by the Commission. Individuals, such as consumers and economic operators, have the legal power to control the correct application of that law through their national courts and may get compensation if this is not the case.
The credibility of the SM depends on the solidity of that system. This is why no third state has partial or full benefit of the SM, with the exception of the three EFTA members also EEA members and subject to the EFTA Court (Switzerland is now negotiating a new agreement with the EU). The EU will not accept bending that basic system.
Thus, the UK’s option is now to find a credible solution for the Irish border issue and to negotiate an ambitious political Declaration on its future relations with the EU. That Declaration will be the basis on which an Association Agreement could be negotiated after 29 March 2019. It might include a free trade zone without any custom tariff on goods, an ambitious customs arrangement, a strong governance with a Joint Committee and an ad hoc Tribunal, allowing the EU Court of Justice to give rulings for issues on EU law.
A solution to the Irish border issue and an agreement on a political Declaration on future relations will allow the conclusion of the Withdrawal Agreement (foreseen by article 50 TEU) before 29 March 2019. This will permit a transition period until (at least?) 31 December 2020, and will open the possibility to negotiate a range of additional specific agreements:
- on co-operation on external and internal security, including maybe creating new specific rules and arrangements allowing as full a participation as possible in Europol, the arrest warrant and an access to Schengen data bases; Europe must be as united as possible in its fight against terrorism
- on continued participation in many EU programmes and in some EU agencies, as well as an association with the European Atomic Energy Community
- on the acceptance by the UK of the jurisdiction of the EU Court of Justice where necessary, and of a normal participation fee in appropriate cases, as any other third country does.