Back in the pre-COVID-19 times of late 19’ and early 20’, the geopolitical scene of Europe was heavily preoccupied with Brexit and the dragging negotiations on the Withdrawal Agreement, also known as the Divorce Bill. Once the agreement has been reached in early 2020, Europe sighed with relief and moved on to ensure that the future relationship between London and Brussels is as smooth and mutually beneficial as possible. However, the global SARS-CoV-2 pandemic has driven the attention away from the UK-EU negotiations, and quite rightly so. Nevertheless, it is important to remember that the international health crisis has not affected what will happen on the night of December 31, 2020. Despite the looming end of the transition period and the subsequent full and final departure of the UK from the EU Single Market and the Customs Union, the British PM Boris Johnson seems less determined to agree on a comprehensive Free Trade Agreement then he was just several months ago. If the agreement is not ready by the end of 2020 and the “no-deal” scenario happens, Europe will most likely experience enormous delays in the flow of goods, services and people between the EU and the UK, leading to a paralysis in this part of Europe, lasting for days, if not weeks.
Author: Michał Oleksiejuk
Good old Brexit
As such, the issue of the UK willing to leave the European Union has been present in the British politics ever since it was admitted to the European Economic Community (EEC) in 1973. Following two successful vetoes of the Britain’s accession by the French President Charles de Gaulle, it took the Kingdom only two years from the time of joining the EEC to the first ever referendum on the possibly of leaving it. Interestingly enough, the 73’ accession pact was negotiated and signed by the conservative government represented by Prime Minister Edward Heath – a 180-degree change to the current stance towards the EU of the same party. Throughout all this time, the Labour Party was heavily split over the British membership in the ECC, experiencing internal clashes on whether to support or criticize the new alliance. This dispute led to including a public promise in the Labour Party Manifesto, stating that the Labour Party should win the 1974 General Election and a referendum on the ECC will be held to determine whether Britons support or reject the British membership in this institution. Similarly to the 2016 referendum, the subject of membership was used primarily as an electoral tool that would allow a certain party to win/stay in power to exploit political sentiments of its voters. In the end, the majority of British citizens opted for remaining in the EEC, which over time became the contemporary European Union. The support for the European Economic Community in 1975 was quite impressive and reached up to 66% with approximately 34% voters determined to leave the new alliance. Despite this endorsement, the 1980s have marked the beginning of the increasingly Euro-sceptic approach towards the EU, led by the Conservative Party and Prime Minister Margaret Thatcher. In 1984, she fought with Brussels to lower the amount of British financial contribution towards the EU. This was due to incoherent and unfair EU agricultural regulations that at some point saw the UK as the biggest financial contributor to the European budget, despite being its third poorest member at the time. Furthermore, in later years, the UK experienced a ban on the exports of its beef to the EU, following health concerns, as well as a debate on the complete rejection of euro as a possible replacement of pound as the British currency. All of these issues paired with a rising popularity of far-right movements such as UKIP, have further deepened Euroscepticism of the British society and the Conservative Party itself.
The rest in now history. Back in 2013, upon seeing the increasing discontent of the British society with the uncontrolled migration into the UK, the Prime Minister David Cameron decided to use a technique similar to that of his rival party in 1974. He promised that should the Conservative Party win the 2015 General Election, he would promptly attempt to renegotiate the terms of the UK’s membership in the EU and then put the new deal to a referendum, giving every citizen a chance to express an opinion on the future of the relationship with the European Union. Two years later, the Labour Party lost the election and so the renegotiation process begun with the new, revised membership agreement being drafted soon afterwards. The PM declared that talks have concluded in February 2016. The EU Membership Referendum of 2016 took place on June 23, following a lengthy and rather aggressive campaign. The issue of the British membership in the European Union has largely split the society with polls suggesting a very close race, up until the last hours before the vote. The results that came in the next day showed how close the referendum was. A total of 51.9% of Britons voted for the departure while 48.1% wanted to remain. The defeat of David Cameron’s campaign to keep the UK in the EU under new, revised membership conditions, prompted his resignation. Under the new PM, Theresa May, the Article 50 that formally triggers Brexit has been submitted to the EU on March 29, 2017, beginning the two-year period of negotiations on the exact shape of the future relationship between the EU and the UK. During these turbulent times several drafts of the agreement have been created, all of which have eventually been rejected by the British Parliament or the EU negotiators. This resulted in a stalemate in the British Parliament as the PM was unable to secure support for any proposal put forward in the House of Commons and the House of Lords. Faced with the inability to fulfil her obligation towards the nation, Theresa May resigned as Prime Minister, making way for one of the architects of the 2016 campaign to leave the EU, the former mayor of London, Boris Johnson. Then, after early election, several deadline extensions and intense negotiations, the House of Commons agreed on the Withdrawal Agreement in January 2020, sealing the final departure of the UK from the EU. The United Kingdom left the European Union on January 31, 2020 at 11:59 PM CET.
Transitioning into the new
Starting from February 1 of the same year, a transition period begun. It that saw the UK outside of the EU but still as a member of the Single Market and the Customs Union. This has been done to give both sides plenty of time for negotiating the future EU-UK trade agreement while averting the chaos of United Kingdom leaving the European Union without any deal straight away. This would almost certainly lead to the obstruction of the flow of goods, services and people across the border since border and custom checks would have to be imposed on all border crossings, including air and seaports. However, this highly favorable arrangement, allowing the UK to enjoy some benefits of full membership while remaining outside of the EU will not last forever. London and Brussels mutually agreed that it will last only until the end of 2020, after which the UK will have fully left the European Union, including the Customs Union and the Single Market.
In the ideal world, a new comprehensive EU-UK Trade Deal would have been agreed by that time, allowing for a smooth transition between leaving the EU’s structures and into an arranged situation where the flow of goods and services is largely deregulated with limited taxation and customs fees. However, because of the lengthy turmoil associated with negotiating the final version of the Divorce Bill and the subsequent postponements of the actual Brexit day, the length of the Transition Period was limited to only 11 months. Together with the outbreak of the SARS-CoV-19 pandemic across the world, this hindered time and caused the comprehensive trade agreement difficult if not completely impossible to achieve. The current British PM, Boris Johnson, has mentioned several times that should the agreement not be ready by October 15, there will be no chance to ratify it on time, hence the UK will have to leave the EU without a deal and begin trading on the basis of the World Trade Organization rules without any preferential treatments.
The Internal Market Bill
At the time of writing this article (the beginning of October) little to no information has been shared by the negotiators of both sides regarding the progress made with regards to the new trade agreement. From time to time various politicians have been sharing vague comments on the matter such as: “negotiations are going well,” “we are on track to meet the deadline” or “that the majority of issues has already been agreed on, as of today we are only working on the last items to be resolved.” However, despite these obvious attempts to create a positive image of the negotiating process in the international media, it is clear that much work still needs to be done and that the key points of disagreement between the sides are yet to be resolved – furthermore all of this has to be achieved within an overall deadline of less than 90 days. The situation has been further deteriorated in early September when the details of a new proposed legislation, submitted to the British parliament by the Prime Minister, surfaced to the media.
According to its authors, the Internal Market Bill (UKIM Bill) is designed to ensure that all four of the UK’s nations (England, Scotland, Northern Ireland, Wales) will not be limited by regulations determined by other three national governments in terms of internal trade. The Bill is necessary since the old UK laws, ensuring a free, single market within the borders of the United Kingdom, have lost their powers when the UK joined the European Economic Community in 1973. Then the UK’s “single market,” alongside dozen other legislative acts were replaced by EEC’s (now EU) legislation. However, when the full Brexit finally happens on December 31, 2020, the EU Single Market laws will also cease to have power in the UK, since it will no longer be a member state. The UKIM Bill was therefore designed predominantly to replace this legislation by ensuring a Single Market within the four nations of the United Kingdom that will prevent any of them from introducing rules and regulations favoring goods from one part of the UK over another. Although the premise of the proposed legislation may not seem controversial, it does contain an important clause that has been the source of the EU-UK conflict ever since.
International or domestic – which law will be more important to the UK?
The UKIM Bill contains a clause stating that the legislation contained within the document will always take precedence over any international law. This is particularly significant with regards to another crucial document signed in the process of Brexit called the Withdrawal Agreement (WA). The WA was signed by the United Kingdom as well as the European Union with an intent of drawing out basics for the future relationship between the two for the duration and after the Transition Period. This document and the inability to ratify it in both chambers of the British Parliament led to the delay of Brexit on several occasions. Although Members of Parliament and the UK’s Brexit negotiators in Brussels could not agree on several issues that later became a part of the WA, the biggest one was the Northern Ireland border issue. This was of particular importance for many reasons with the most significant of all being the sensitivity of the past tensions alongside this exact problematic border that eventually escalated to what is now known as the Northern Ireland conflict. The Troubles, as they are also called, begun in the late 1960s with an exact starting date hard to determine. The conflict took place on the territory of Northern Ireland and include fights between the Unionists, who wanted Northern Ireland to remain within the United Kingdom and the Irish nationalists, who called for Northern Ireland to leave the United Kingdom and join the Republic of Ireland. The struggle was extremally bloody with over 50,000 casualties on both sides including more than 3,500 fatalities –combatants and civilians. The infamous bomb attacks by the IRA as well as the brutality of some British soldiers involved made headlines across the world – making the conflict known internationally. The war ended in 1998 when both sides finally decided to sign cease-fire agreement, referred to as the Good Friday Agreement. Amongst many things, the peace deal included provisions that no hard border or permanent border checks can ever be established between Northern Ireland and the Republic of Ireland, allowing for minimal obstruction to the functioning of border communities.
With that in mind, if no appropriate actions were taken in time before the departure of United Kingdom from the European Union, the border between the Republic of Ireland and Northern Ireland would suddenly become the EU’s external border, thus requiring border and custom checks of all arriving and departing vehicles. This would in turn clearly violate the Good Friday Agreement, potentially leading to an outbreak of social unrest, possibly even violence. In order to avoid this scenario, special attention was given to finding a feasible solution – although not perfect, a plan has finally been agreed on at the end of 2019, allowing the Withdrawal Agreement to be signed at the beginning of 2020. The clause related to the regulation of the North-Western border of the UK after Brexit became formally known as the Northern Ireland protocol. Under this arrangement, goods will not need to be checked by customs along the entire Irish border (when traveling between EU and the UK) once the Transition Period ends and the EU-28 becomes the EU-27. Northern Ireland will continue to enforce the EU’s customs rules and follow its premises on product standards (known as the Single Market on goods) despite not being a part of it. Thanks to this solution, checks on goods travelling from Northern Ireland (a non-EU country) into the Republic of Ireland (an EU country) will be completely unnecessary. The Northern Ireland protocol is not active yet – it is due to come into force on January 1, 2021, the first day of the new EU-UK relationship.
However, although the Withdrawal Agreement together with the Northern Ireland protocol have already been ratified by both sides and became the international law, the currently discussed Internal Market Bill threatens (at least in the eyes of EU representatives, the Labour Party and national governments of Scotland, Northern Ireland and Wales) this carefully crafted solution to the Irish issue by giving UKIM Bill precedence over the Divorce Bill and thus possibly deeming it unusable. Interestingly enough, the administration of PM Boris Johnson is fully aware of the legislative clash between the two documents but does not attempt to hide it from the public. When the Bill has been put forward in the British Parliament in early September, the Secretary of State for Northern Ireland Brandon Lewis told the House of Commons that “the (UKIM) Bill does indeed break the international law in a very specific and limited way.” Despite being clearly aware of both domestic as well as international criticism of the Bill, the Conservative Party have decided not to withdraw or amend the document in any way that would satisfy the EU. As a result, the Bill was put to the vote only after a number of insignificant changes and in the end passed with an impressive majority of 84. As many as 340 Members of Parliament (MPs) voted in favor while 256 voted against the proposal.
It is not as bad as it seems
Looking at the UK’s government determination one may ask if the UK has grown reckless when it comes to its international politics or rather was the stubborn defense of the Bill a show of confidence, confirming that the Bill will not threaten the peace in the Northern Ireland?
According to representatives of the Conservative Party, it has got to be the second one. The government’s line of defense claims that the Bill is aimed simply at replacing the soon-to-be obsolete EU legislation, acting as a special safety net that will protect Northern Irish as well as any other British goods in the unlikely case that European Union will start making unreasonable demands after Brexit. The Bill is supposed to protect Britain from EU legislation that could potentially impede trade between Northern Ireland and the rest of the UK by giving British ministers the unilateral power to change or disapply export rules for goods travelling from Britain to Northern Ireland. Its authors wanted the Bill will to make clear that Britain will be able to set its own subsidy regime while Northern Ireland will continue to apply the EU’s state aid rules. Moreover, they wanted to permit the government to provide financial assistance to Scotland, Wales and Northern Ireland – a power previously reserved to the EU, which will no longer be enforced when the Transition Period ends.
What is the future of the UKIM Bill?
Despite these reassurances, the EU officials remained unconvinced of the good intentions behind the Bill proposed by PM Boris Johnson. In early September, when the full document has been revealed, the European Union has immediately threated the UK with severe actions if it goes ahead with the plan to ratify the UKIM Bill. Amongst many, the harshest of the proposed reactions included the EU walking away from the post-Brexit negotiations completely as well as filing a formal lawsuit against the UK to the European Court of Justice for breaking the international agreements. However, after the Bill has passed through the British House of Commons on September 29, the European Union’s stance has become less strict than before. EU officials agreed to continue the negotiation process with the UK, but only after a mutual understanding that even if a deal is negotiated and all problematic issues are resolved, the European Union will not ratify it unless the UKIM Bill is completely withdrawn.
This has likely been done not to impede the progress that was already achieved over the past eight months while still giving the UK time to rethink its actions and realize (at least in the eyes of the EU) that the international law cannot be broken in the name of providing a safety net to policies that may or may not be pursued in the undetermined future. The President of the European Commission Ursula von der Leyen expressed similar view in a series of Twitter posts that appeared on her account in early September. In one of these posts der Leyen said that she is “very concerned about announcements from the British government on its intentions to breach the Withdrawal Agreement,” since the passing of the Bill “(…) would break the international law and undermines trust. Pacta sunt servanda = the foundation of prosperous future relations.”
Nevertheless, the decision not to withdraw from the negotiations does not mean that the ratification of UKIM has gone unnoticed across Brussels. Numerous anonymous sources within the EU negotiating team characterized the talks with the UK as tense, especially having in mind that the UKIM Bill is just one of several conflict issues that the two sides need to resolve before the talks conclude. The most important of them (except from the UKIM Bill) being the fisheries – mainly the policies regulating them as well as the access issues.
Although the EU remains open to intensive talks, being aware of the fast approaching deadline, the British PM Boris Johnson has made it clear that should the agreement not be ready by October 15, 2020 (the date of the EU summit) than the UK may as well dropout of the talks without any deal.
As of the first week of October, Ursula von der Leyen as well as Boris Jonson have both agreed that despite the discussed difficulties, the negotiations should be extended by a month, in what is considered to be a last bid to come up with a compromise on the final unresolved issues, including the already mentioned fisheries and polices regulating them. In the meantime, the EU continues to pressure the United Kingdom on the UKIM issue, reminding the UK negotiators that even if a new free trade agreement is reached, it will not be ratified unless the UKIM Bill is dropped from the agenda. In a recent show of force, the EU has officially begun its internal legal proceedings against London for the introduction of legislation that is breaching the international law. An official “letter of formal notice” has been passed to the British PM – this is the first step in the process that the European Commission can employ against countries that it believes have broken the EU law. Although designed to serve as just a warning, the later stages of the said process may include a formal lawsuit being filed at the European Court of Justice (ECJ). However, such move is highly unlikely as the UK will only have to adhere to the ECJ ruling until the end of 2020. Any case still in the process after that date may go on for years, thus deeming the entire procedure meaningless. Nevertheless, the threat of the ECJ case may serve as a leverage to somewhat force the UK into finding a compromise with the EU.
The pressing question still remains: will the Transition Period end with an agreement over a comprehensive trade deal? In the author’s opinion it is difficult if not impossible to assess – even at such a late stage of negotiations. One has to remember that the issue of finding a compromise is currently much more about politics than it is about any legal procedures. Prime Minister Boris Johnson will be a decisive figure in that case and the process may still go either way. In one of the scenarios the UK agrees on the EU’s proposals and a deal is signed. The expected outrage of Conservative circles and voters claiming that the UK surrendered to Brussels will likely be played down by claiming that some concessions had to be made for the greater good of the country and the attempt to stabilize its economy. The second scenario could see PM Johnson rejecting the deal with the EU and accepting the possibility of border chaos in order to cement his electoral promises of “taking back control” and thus staying trustworthy to his most loyal supporters.
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