Rainbows

Theresa May used to tell us “Brexit means Brexit”. However, she never really told us what Brexit means. In truth Brexit is like a rainbow, a range of colours, opinions and viewpoints. If we can define a rainbow, can we define a Brexit? Can it ever be touched?

On our political spectrum, the reds, yellows and greens are all in favour of some sort of Remain or further vote. The current debate over defining Brexit is at the blue, indigo and violet end of the spectrum.

To be able to see a rainbow depends on perspective. In the morning, they will appear towards the West, in the evening to the East. The phenomenon results from the sun being behind the viewer, its light being dispersed by water droplets. As the viewer moves towards the rainbow the end seems to move further away, not unlike the political scenario as we potentially reach the end of the day as an EU member.

The current dispute seems to centre on whether or not we should leave with or without a Withdrawal Agreement. Boris says that means Brexit, Farage doesn’t agree.

So how can we define Brexit?

If we go back to Theresa May, her focal point was “control of our money, laws and borders”. Some will have different views over levels of control. Another angle that might follow in a quest for a definition could include the question ‘when?’.

As a reminder, the process of leaving the EU started with a referendum in which the electorate made a choice, to leave. The process is governed by the EU club rules, specifically Article 50 of the Lisbon Treaty.

We have seen that the process allowed for two years, subject to extension, to negotiate terms of exit. Failure to agree would mean leaving on WTO terms. Extensions mean that as we have moved closer to the rainbow, so the ends seem to have also moved.

Boris has pledged that there will be no more extensions. If the election allows him to stay keep that promise, the Article 50 period comes to an end on 31st January 2020. If by that date either the WA is ratified, or Article 50 has lapsed, then it can no longer be revoked under EU law. To regain membership, a new application has to be made under new terms (under Article 49) with many more impositions.

The UK will have left the EU. However, the UK will not have full “control of our money, laws and borders” – yet. Boris might be right but so too might be Farage.

Under the WA, the UK leaves with a transition period, guided by the Political Declaration, the latter not being (totally) legally binding. The current target for an end date is 31st December 2020. During that time the UK and EU can trade on existing terms with a view to completing a new free trade deal. If all goes to plan, then 1st January 2021 would see a cleaner break, with the exception of exporters to the EU27 meeting their standards.

Farage advocates leaving, as some would say without a deal. That would mean trading on WTO terms immediately when the Article 50 process comes to an end. He has suggested that his leaving date would therefore be the end of May 2020. To achieve that, the EU27 would have to agree a further extension of Article 50.

As a part of the Brexit Party launch campaign, Farage and his team have highlighted where, under the WA, the UK does not have complete control. He has further complicated the scenario by emphasising the suggestion from Michel Barnier that it would take at least three years to complete FTA negotiations, hard for some to believe, given current close alignment and the recently completed CETA template.

There is an obvious contradiction that might be explained as the opening less well directed salvos of an election campaign. However, he is correct in saying that there is not complete “control of our money, laws and borders” until the conclusion of Article 50 and/or, if ratified, the transition period.

Just for a moment, assuming that public utterances from the leading UK figures genuinely reflect the positions that will be adopted when candidates are administratively finalised, the differences would appear to be Brexit by one definition on 31st January 2020, not by the other definition until 31st May or 31st December 2020 depending on whose decision, possibly with consent of the EU27.

The comparative envisaged end dates, between Boris and Farage are from four and seven months, unless the real world gets in the way. The material difference is whether or not we ratify the WA.

So what of the real word?

Naturally, the first consideration is the EU themselves. We know that they have agreed to the WA. Would they agree to the Farage suggestion to delay a further four months? This is subject both to conjecture and political will on both sides.

Farage seems to give credibility to Barnier over the time scale for FTA negotiations, Boris sees “no reason whatsoever” that such negotiations should be extended beyond December 2020. Barnier may be right, on the other hand, he could be laying down the foundations for a negotiating stance.

Perhaps Mr Farage will come to explain why when the EU27 will not agree for three years, they will agree within a five month extension? Does the answer lay in GATT Article XXIV?

On money, the UK would be bound to the conditions first formalised by Article 109 and Protocol J of the Maastricht Treaty with regard to overall policy.

Yes, if we leave without the WA, there is a strong argument, endorsed by House of Lords select committees, that the balance of the divorce bill does not legally have to be paid. There is a moral issue as to whether the UK should honour terms agreed in the EU budget cycle to the end of 2020.

During the transition phase, if there is one, of course the UK has no say in laws that the EU might pass. If the transition period does in fact end after December 2020, then in theory, subject to any FTA, those could be repealed by a British government in 2021. In any event, to export to the EU, goods will have to meet EU standards. EU businesses would also need time to adapt.

Whether or not the EU would agree to invoke GATT Article XXIV in the event of a trade deal not being agreed by the end of 2020 is open to conjecture. The same criterion applies if the UK leaves with “no deal” after 31st January 2020. A flip side to the coin is that when free to negotiate FTAs globally, the bargaining hand of the UK could be argued to provide extra leverage in a fair deal with the EU.

When it comes to borders, of course the UK is outside the Schengen area. The difference between both sides of the Leave debate becomes that seven month period for free movement within the EU.

Similarly, fishing may be subject to the same time scale, subject to what may have already been agreed for 2020 under EU and international law. More clarity is needed.

The same applies to other issues. Is seven months enough for the EU to formalise military structures, at least sufficient to invade, for example, Montenegro, Egypt or China? If invaded, of course NATO is more relevant.

There is the question of Northern Ireland too. Boris would argue that the WA provides the country with the best of both worlds, having a foothold in both the UK and EU. There is no formal representation at EU level. There are extra barriers, however minimal, on trade between Northern Ireland and the UK mainland.

A host of other issues need to be explored; security, policing among them. Some provisional arrangements have already been negotiated such as haulage.

Voters will come to their own judgement on whether they want to shut one door before others open. Boris can claim to leave four months or more sooner, Farage can claim to leave seven months or more sooner.

Ultimately, the strength of the UK hand will depend on parliamentary arithmetic. Events since 2017 have shown how weak a negotiating position can be when a handful or nonconformists can delay, obstruct and derail a government’s policies.

The irony is that by each colour seeking to appear too strong, the blues, indigos and violets may yield their pots of gold to the rest of the spectrum. Leave might be six months down the road under Corbyn, it might be never under him or any form of coalition.

Leave means leave – or does it?

Brexit election

The general election has finally been called. Of course a general election should be about more general issues but will Brexit dominate the agenda? The early stages suggest that this will be the defining issue.

Looking back at previous elections, 2015 provided a surprising Conservative majority. Many aspects may have tipped the balance but Cameron’s EU referendum promise can be argued to have been decisive.

In retrospect, May’s 2017 election has been widely interpreted as a vanity project, seeking to capitalise on a healthy lead in the polls. Ultimately, it may have been the student debt vote that swung in, ostensibly at the last minute, that led to her minority government.

She was finally derailed by her “no deal is better than a bad deal” mantra, a stand that was only “in the abstract”. May lost the support of the ERG wing of her party, one person’s “extreme”, another person’s global free traders.

Now, the 2019 election became inevitable, the minority government leaking former ministers, later back benchers, at an alarming rate. Those rebels who had supported May’s withdrawal agreement, keeping the UK closely aligned to the EU, were unable to unconditionally support the new Boris Withdrawal Agreement.

The Boris deal provides a few changes, most notably removal of the back stop but with a (possibly) temporary solution that Northern Ireland has a foot in both the UK and in the EU Single Market. The long term view in the accompanying Political declaration is towards a free trade agreement (FTA) rather than close alignment.

So where do the parties stand on Brexit now?

The Liberal Democrats have been quite open in seeking to revoke Article 50, to remain in the European Union. They are also home to six former Conservative MPs as well as four from Labour. It remains to be seen how they would realign once Brexit has finally reaches the next stage of voting as well as economic policies should the next parliament run for the full five year turn.

It will be remembered that the current Liberal Democrat leader, Jo Swinson, was one of the most supportive of Conservative policy during the 2010-15 coalition, regularly voting against her party manifesto commitments. It might be that her chameleon-like status affords the opportunity to form other alliances in the event of another hung parliament.

The most obvious potential is with Labour, whose position has moved in the last thirty months from respecting the result of the 2016 referendum. Currently, the line is that they would seek to negotiate a third new “credible” deal before holding a second referendum. Although Corbyn maintains silence on how we would vote, leading members of his party suggest that they would vote against whatever they manage to negotiate.

Completing the UK wide Remain line up are two separate factions, the first of which is The Independence Group, made up of four former Labour MPs and Anna Soubry who are firmly in the second referendum camp, at least for the time being.

Others are predominantly former cabinet ministers who will have claimed to be standing as independent candidates, serial rebels against the Boris deal, advocates of taking “no deal” off the table and orientating towards Remain.

The Leave side is more coherently summarised as the Conservatives and The Brexit Party. Ostensibly, the former line up behind the Boris deal, the latter to leave on WTO rules. The differences between those positions becomes more nuanced depending on interpretation of the agreements, the WA and PD.

Farage and his cohorts have argued that the Boris deal is not really Brexit, that the UK remains under the control of the EU in many regards, through treaty commitments and through adherence to adjudications from the European Court of Justice. He stipulates that the UK does not regain control, the EU can still lay traps.

On the other hand, Boris might argue that his deal gives a managed exit. Total independence is not gained straight away but allows for a negotiating period, during which time the UK can also negotiate trade deals around the world, something that can not be done as a full member of the EU.

At the risk of oversimplification, potential compromise may be somewhere in between with two key components. The first is a gamble on EU27 strategy, the second in answering the question “when?”.

The Farage case is embedded in the assumption that free trade with the EU27 may continue as currently if both parties commit to the FTA. In that case, under WTO rules, GATT Article XXIV can be invoked. This allows for a reasonable period, notionally up to ten years, for the FTA to be finalised. If there is no agreement to pursue Article XXIV, then the UK leaves with trade barriers. Farage seems that to follow the line of EU officials an FTA would in any event take at least three years to negotiate.

Certainly, the WA and PD allow for talks to be extended to 31st December 2022 and potentially beyond. The initial time scale is that a decision must be made by July 2020 if an extension is to be sought beyond December 2020.

Therein lies a potential compromise but it should be born in mind that the current legal default position is that the UK leaves the EU on 31st January 2020 on “no deal” or WTO rules, unless alternative arrangements are agreed in the interim.

So what is that compromise? Quite simply, that a Conservative government under Johnson would adopt the position that a trade deal can be broadly cut and pasted from the Canada deal, to be agreed by 1st July 2020.

Already, according to news outlets, a ‘Downing Street source’ has “categorically ruled out extending the transition period”, presumably subject to the outcome of the election.

Both the UK and EU27 are currently aligned, so to maintain trade on current terms is simple. An agreement to invoke GATT XXIV extends the negotiating period but outside the PD. The Brexit transition period ends on 31st December 2020 with minimal risk.

To illustrate the point, fishing may be a workable example, again arguably slightly oversimplified.

Under the Boris solution, the UK does not regain control over fish stocks until January 2021. If an FTA is agreed before then, fish sold into the EU27 are free from tariffs. If GATT Article XXIV is invoked, those sales are tariff free for a longer period.

The Brexit Party position would give control over fish stocks after 31st January, subject to challenge under international law but also subject to any five month extension proposed by Farage, were the EU27 to agree.

There may be a higher risk that GATT Article XXIV might not be invoked. There may also be a potential saving of around £10 billion on the “divorce settlement”. However, other industries may face greater risk.

In the meantime, breathing space is added for negotiations on other international FTAs which in turn might provide leverage for a beneficial future relationship with the EU27.

So what of the chances for electoral success?

Much depends on the potential for electoral pacts. On the Remain side, we have already seen that the Liberal Democrats stand aside in Beaconsfield to enhance Dominic Grieve’s chances of achieving success as an independent. His 65% rating last time, against Lib Dems 15% may give him a chance but those 65% voted for him as a Tory. He could be subject to Brexit Party and Tory candidates.

Similarly, Antoinette Sandbach stands as a Liberal instead of Conservative. Her vote as a Tory was 57% against Lib Dems 6%. Both she and Grieve are in constituencies that were marginal in the referendum.

The Brexit Party won most votes at the MEP elections, Lib Dem second with Labour third and Conservatives fifth, even behind Greens. A low turnout then, followed by subsequent changes in the political landscape provide no guarantees. Tactical voting may become the norm.

Polls will emerge in the coming weeks as to how loyal supporters are in different parts of the country. The perceived industrial Labour North is also home to majorities of Leave voters. For once, there could be scores of four way marginal seats.

Unless those electoral pacts develop, the outcomes are possibly the least certain in history. For the time being, Boris leads the polls but so did May at this stage in 2017. Instinctively, Leave have greater potential to unite although the diverse Remain side have the less nuanced divisions.

It may be that the outcome leads to balances of power held by the smaller constituent members of the United Kingdom, Scotland and the independence argument, Northern Ireland with the Irish Sea border, an element of Welsh nationalism perhaps?

On other issues, there are different alignments. The Brexit Party have more in common with the Lib Dems than they do with other parties. Boris has signalled his own end to austerity and stressed the public service element. Labour have produced one of the most idealist and economically illiterate agendas ever. If they keep us in the EU, their nationalisation policies will be inoperable under EU competition rules.

Ironically, the state of the parties could lead to a stronger Brexit. They could also lead to the most European political modus operandi of coalition government and alliances that the UK has experienced.

One thing is for certain, those who choose to study politics have never had it so good.