A deal with the EU could be the best way to stave off calls to scrap UK environmental regulations after Brexit. But there’s another little-noticed obstacle that could derail progress
Last week, Theresa May secured tenuous Cabinet agreement over what the UK will accept in a future deal with the EU, in the hope that the UK and EU can begin negotiating their future trade relationship from March, after settling issues on the transition.
These talks – the real meat and drink of Brexit – will shape Britain’s future economy, but also crucially its regulatory regime, environmental rules and workers’ rights.
Prominent hard Brexiteers are keen for the UK to pursue a path of sweeping deregulation after Brexit, in a bid to make the economy more internationally competitive. May is currently pushing for a slightly different path, in the form of “ambitious managed divergence” with EU regulations in the future.
It’s like a Swiss cheese, it’s so full of holes, and the most obvious hole is enforcement
Avoiding the hard Brexit deregulation scenario relies upon the UK and EU coming to a deal on their future relationship which includes some protection for existing environmental, safety, workers’ rights, and quality standards.
However, May’s already laboured progress toward trade talks is facing another, hitherto little-noticed, obstacle: the European Commission has said it wants to get the UK’s agreement on citizens’ rights, the Irish border and exit payments – announced by both sides to great fanfare in December – set down in formal legal language before beginning future talks.
This process is likely to cause significant political challenges for Theresa May, according to legal experts speaking to Unearthed, and could even derail the Brexit negotiations.
The key issue, according to University of Cambridge Professor of EU and employment law Catherine Barnard, is that the December deal is just a political agreement, and converting it into something with legal force is not straightforward.
The December report was “not in and of itself legally binding,” she told Unearthed. “It’s like a Swiss cheese, it’s so full of holes, and the most obvious hole is enforcement.”
In many cases, she said, attempting to make the provisions of the EU/UK exit agreement enforceable would be difficult, because there is no obvious way to do so – except in the case of an agreement over Northern Ireland.
Paragraph 49 of the December deal states that “in the absence of agreed solutions”, the UK commits to maintain “full alignment” with those single market and customs union rules that ensure there is no hard border, protecting the Good Friday peace agreement and an “all-island” frictionless economy across Ireland.
That paragraph, Barnard said, was one that could be legally enforceable, but it would be politically impossible for Theresa May to achieve. She would either have to accept a special status for Northern Ireland, leaving it inside the single market and customs union – a plan vociferously opposed by the Northern Irish Democratic Unionist Party, whose support May needs to stay in power – or would have to commit to the UK remaining in the single market and customs union, with no say on those rules, after Brexit.
“The most enforceable provision is paragraph 49 on regulatory alignment within the customs union and single market. In reality that is not politically viable for the UK,” Professor Barnard said. “If there were a simple solution to the Northern Ireland border problem, someone would have found it by now.
“This is where divisions in the cabinet become crucial. At the moment they can get away with fancy promises like ‘Brexit means Brexit’ but that needs to turn into specific legal reality – they need to decide what kind of Brexit they want.”
A seismic shift
Stephen Blockmans, a senior research fellow at the Centre for European Policy Studies, said May’s attempts to “square the circle” would prove unworkable.
“The terminology to which they’ve agreed in [December’s] deal seems to suggest that any future arrangement on the Northern Irish border will have to be agreed to by both Dublin and London – and in fact Dublin now seems to be in a position to dictate the terms of that future agreement to London,” he said.
The current wording of the document, he explained, would “effectively write into the UK rulebook” all of the EU’s single market rules in the event of “any disagreement between Dublin and London”.
Blockmans said the implication of the critical paragraph 49 was that the UK would remain in the single market and customs union in all but name – a seismic policy shift that could not easily be hidden in small print.
“To then say, as May’s government has seemingly done, that this is squaring the circle for the UK to remain out of the internal market and customs union while aligning to it is, I think, a legal fiction, because if you comply with all the rules of the customs union or even internal market then you’re effectively in it.”
Blockmans said in his view it was not realistic to expect the UK and EU to come to a formal agreement on the future of the Northern Irish border by the time of the March talks, as it would depend on the nature of the future trading agreement between the two.
“In a way it’s kicked the can down the road, but at least it’s bought time by conceding to the fact that Dublin would have the final say,” he said. “It’s asking the impossible to agree to the details of the [Northern Ireland] border settlement before agreeing the terms of the future trading relationship.”
This, then, is the dilemma facing Theresa May and European chief negotiator Michel Barnier ahead of March’s talks: either Barnier needs to back down on attempting to make December’s deal legally enforceable, which would render its assurances meaningless, or May needs to bring her party around to signing a deal which could set the UK on a course to the very softest of Brexits. Or both sides need to find a way to kick the can further down the road, in the hope that something comes up to salvage the situation.
It could be a turbulent few weeks.