Brexit

What the Hell Is Going On with Brexit Now?

Oh great, this again.
14 September 2020, 2:19pm
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Anti-Brexit protesters hold placards as EU Chief negotiator Michel Barnier walks with an entourage to a meeting in Westminster, London, on the 9th September, 2020. Photo: REUTERS/Peter Nicholls

It may seem hard to believe in these pandemic-laden times, but Brexit is back. There’s technical complexity around treaties, backbench discord and a big ticking clock that might end in disaster.

But hang on, didn’t we leave the EU on the 31st of January? Didn’t Boris Johnson finally “Get Brexit Done” back when “coronavirus” was just a few ominous-sounding news stories coming out of Wuhan?

Read on to find out what’s going on with Brexit now.

WAIT, DIDN’T WE ALREADY LEAVE THE EU?

Yes. You didn’t imagine it. Britain is no longer a member of the European Union. However, leaving was arguably the easy part. Since then, Britain has been in what’s been called the “transition period”, where nothing has materially changed and we’ve still been following the EU’s rules. But at 11PM on the 31st of December, the transition period is set to end, and Britain’s ties with Europe will finally be severed for good.

The problem – and why New Year’s Eve is now a dramatic new deadline – is what happens next. The current talks between Britain and the EU have been all about establishing a “future relationship” – a trade deal that will outline how British businesses and people will be able to do business and otherwise interact with the countries of the European Union in the future.

The danger is that if a new trade agreement between the EU and Britain is not concluded, it could have the same apocalyptic outcomes as the previous deadlines: lorries stuck in Dover, unable to transport goods to Europe; supermarket shelves falling empty; high tariffs on goods causing prices to spike; and further economic paralysis.

Though the countdown clock runs until the end of the year, for most practical purposes the important deadline is the 15th October. This is the date of the next EU summit, when the 27 heads of government in the EU will get together and – in theory – sign off on the new arrangement with enough time for bureaucrats, lawyers and businesses on both sides to adjust for the new normal.

OKAY, SO WHAT IS THERE STILL TO TALK ABOUT?

Over the last few months, negotiations between Britain and the EU have been continuing with few signs of progress. The dynamic is much the same as it has always been. Britain essentially has to choose between two options: regulatory freedom and greater barriers to trade with the EU, or following the EU’s rules and being able to trade more freely.

In recent weeks, talks have particularly stalled over the issue of State Aid, when governments offer special hand-outs or favours to companies to help them out. The British government wants to be able to do it to help British industry, but the EU wants to restrict State Aid.

Why? Let’s say the British government were to give special tax arrangements to a British car company – it would give that company a leg up when competing with a German car company that does not receive similar help. If that British company could then trade with Europe just as easily as the German company, in the EU’s view that wouldn’t be very fair. So by agreeing rules on when State Aid can be given, it means companies can compete on a level playing field.

The other substantive contentious issue is fishing rights. Though fishing makes up a smaller proportion of Britain’s GDP than our video games industry, the sector is highly emotive. Since the referendum, control over fish has been repeatedly pointed to by Brexiteers as one of the perceived benefits of Brexit. The EU, however, still wants the rights to fish in our waters in any trade deal. So on several of the major issues of substance, Britain and the EU are still at an impasse.

WHAT WAS THAT BLOW UP LAST WEEK?

That all takes us up to last week, when Justice Secretary Robert Buckland decided to lob a grenade on to the negotiating table.

At the moment, the government is working to get the Internal Market Bill through Parliament. This is a law that will set out some of the new powers government ministers will have after the transition period ends, in order to set out the rules around trade between the four constituent parts of the United Kingdom. But rather dramatically, as it is currently planned, the proposed bill will technically break international law in what Buckland called a “specific and limited way”.

The cause was, perhaps unsurprisingly, Northern Ireland. Back in January, in order to get the Withdrawal Agreement passed and get us out of the EU, the government hastily agreed to what became known as the Northern Ireland Protocol. This was an agreement that basically said, for most purposes, to avoid inflaming historic tensions, Northern Ireland would effectively remain inside the EU, and would have to follow EU rules on things like tariffs and State Aid.

To make it work, this meant the creation of a customs border in the Irish sea, so that goods moving from Ireland to Northern Ireland wouldn’t require customs checks, but goods moving between Northern Ireland and the rest of the UK would. And at the time – amazingly – Boris Johnson managed to get everyone to agree with it, even the fiercest Unionist politicians who would normally detest any measures that would bring Northern Ireland closer to the Republic, or divide it from the rest of Britain.

Unfortunately, though, the rhetorical fudge that Boris managed to get everyone to nod along with didn’t really last. Now the trade talks are hitting crunch time, he has felt pressure from the most fervent Brexiteers to not let the EU set the rules in Northern Ireland, even though that is effectively what he signed up to and passed into law in the Withdrawal Agreement in January.

This is what has caused the decision to seemingly break international law. The Internal Market Bill declares that the government will be able to unilaterally set rules over State Aid in Northern Ireland, rather than in consultation with the EU, contradicting the Northern Ireland Protocol. In other words, the government has declared its intention to effectively tear up parts of the already-in-force Withdrawal Agreement, which had already been agreed to by both Britain and the EU back in January.

Unsurprisingly, this went down very badly with the EU, Ireland, many Conservative MPs, lawyers and… pretty much everyone. The concern – even among Brexit supporters – is that the move could undermine Britain’s position as a good-faith negotiating partner. If it tries to renege on what was already agreed in January, what point is there in trying to negotiate a trade deal? How can the EU trust Britain to uphold its end of the agreement? What about the international hit to Britain’s credibility next time it wants to criticise Russia or China for not obeying international law?

In fact, given the outrage that met the decision to break international law, with even former Conservative Prime Ministers John Major, David Cameron and Theresa May speaking out against it, it isn’t clear whether the Internal Market Bill will even make it through Parliament.

WHAT HAPPENS NOW?

The Bill is set to be debated and voted on over the next couple of weeks, the trade talks with Europe have been thrown into potential chaos, Britain has caused a bit of a scene and the Brexit armageddon countdown clock is perilously ticking once again.

So that’s where we’re at with Brexit. Perhaps a deal will yet emerge, just as long as the government doesn’t have, say, an enormous global pandemic to deal with at the same time.

@Psythor