Blog Featured

The new Prime Minister needs a credible Brexit negotiation strategy – he also needs conviction and commitment

Written by David Blake

Only a credible non-cooperative strategy that cannot be blocked by either the EU or Parliament will get us out of the EU by 31 October. And that strategy needs to be executed with ruthless conviction and commitment by the new Prime Minister.

Boris Johnson said when he became Prime Minister that he will: renegotiate the Withdrawal Agreement (WA) and backstop; leave the EU with a ‘deal’ on 31 October; and get parliamentary approval.

It should now be clear these three aims are mutually incompatible and that we are in grave danger of validating Einstein’s definition of insanity – doing the same thing over and over and expecting a different result.

The new Prime Minister needs a credible negotiation strategy

To avoid this, the new PM needs a clear strategy to leave the EU on the basis of what game theorists call a non-cooperative solution    one that the EU cannot block if it is not willing to cooperate in producing a solution that makes both sides better off.

This means that the starting point for any negotiations with the EU cannot be the WA.  The EU says that it will not renegotiate this and it remains completely unacceptable to the vast majority of the British people. As Chairman of Lawyers for Britain, Martin Howe QC, says: ‘I can’t think of any clause in the WA end-to-end which is actually in the interests of the UK’.

A non-cooperative solution requires the UK to specify the terms under which it will both leave and trade with the EU in the future –  and to do so in a way that the EU cannot block.

Theresa May specified the leaving terms very clearly in the Lancaster House speech in 2017: leave the Customs Union, Single Market and jurisdiction of the ECJ. In other words, a clean Brexit. 

The non-cooperative solution involves three steps. And each one has to be credible to the EU

The first step is for the new PM to restate that a clean Brexit will be implemented by 31 October 2019. This is credible and does not require EU consent.

The second step is to set out in a new Departure Statement (DS) how the principal issues involved in departing from the EU will be implemented: citizens’ rights, the financial settlement and the border between Northern Ireland and the Republic. The PM can: guarantee the rights of EU citizens living in the UK without granting them the special status of the WA; agree to pay our financial obligations up to the point of departure; and restate that the UK will not impose a hard border.  All these are credible and do not require EU consent.

The big advantage of being absolutely clear on the border is that it will force the EU and, in particular, the Irish Taoiseach Leo Varadkar to agree a workable solution that allows the UK to leave the Customs Union and Single Market at the end of October.  Solutions exist to protect the integrity of both the UK and EU internal markets without any physical infrastructure on the border or any need for new technology.  The Smart Border 2.0 report commissioned by the European Union Parliament from customs expert Lars Karlsson confirms this – as does the more recent report of the Alternative Arrangements Commission. Annegret Kramp-Karrenbauer, Angela Merkel’s successor, has said that a workable solution could be agreed in five days of discussions.  There were discussions between British and Irish customs officials on creating an invisible border, but Varadkar stopped these when he came to power.  In doing so, he politicised the border issue  – ably abetted by collaborating British ‘negotiators’.

It was this single issue that was then exploited in order to propose the backstop comprising a ‘single customs territory’ between the EU and the UK. Northern Ireland, in addition, would have to abide by the rules and regulations of the EU Single Market. So long as the backstop is in operation, the UK would have to meet ‘level playing field conditions’ that prevented the UK competing against the EU. The UK would not be able to leave the backstop without the consent of the EU.

This, of course, is completely unacceptable. By making it clear that the UK will leave the EU on 31 October 2019, the positions are immediately reversed. Both the EU and Varadkar have said that there will be no hard border. Varadkar would be forced to restart the discussions.  He knows full well how devastating for the Republic’s economy a ‘no deal’ Brexit would be: the Irish Central Bank predicts a 4% cut in GDP and 100,000 job losses. And there are plenty of five-day periods between now and the end of October to agree a workable solution.  But it requires the UK side to make it absolutely clear that we are leaving on Halloween. This too is credible and does not require EU consent.

The third step is to make a Future Relationship Statement (FRS), setting out the terms on which the UK will agree to trade and cooperate with the EU.

There is only one set of trading terms that the EU cannot block. Under WTO (World Trade Organization) rules, we are free to set the tariffs and product standards for trade with the EU, so long as these are the same as for all members of the WTO under MFN (most favoured nation) rules, unless we have a free trade agreement (FTA) in place.  This is the default position, so is both credible and does not require EU consent.

We can actually do better than this and offer the EU to continue trading in goods on current zero-tariff terms under Article XXIV of GATT (General Agreement on Tariffs and Trade) and in services under Article V of GATS (General Agreement on Trade in Services), while a FTA is being negotiated.  But if they refuse, we can temporarily revert to the MFN rules under Article I of GATT.

We need to exploit the fact that the UK has a huge trade deficit with the EU – we are net buyers of goods of around £100bn, equivalent to 5% of our GDP.  Since we will no longer be bound by the EU’s Common External Tariff, we can lower the tariffs we set on goods that we do not produce domestically. But whatever tariffs we set, the EU will be worse off, given that they sell us mostly high-tariff goods like cars and agricultural products. We would pay tariffs to the EU of around £5bn and they would pay tariffs of £13bn. In addition, we would save the £11bn net contribution to the EU.

This provides a strong incentive for the EU to agree a FTA in due course, unless they want to continue punishing us for leaving, and in doing so damage the EU economy even more.  Given that we have a services trade surplus with the EU of around £30 bn, it is essential that this is secured in a future trading relationship. This means a Super-Canada deal, already offered to us by the EU in March 2018

However, we cannot force the EU into accepting any deal that works for us in terms of services, and, in particular, financial services. Still this does not prevent us leaving the EU on the basis of the above DS and FRS.  There are enough ‘mini deals’ in place – covering visa-free travel, aircraft landing rights, road haulage licences, defence and security etc – for the citizens and businesses of both the UK and EU to continue visiting and trading with each other. In addition, a sufficient number of the international trade deals negotiated by the EU have been novated that we can continue trading on the same terms with most of these countries as we do now. A key example is Switzerland which accounts for more than a quarter of our trade under these EU-negotiated deals.

But unless the strategy is clear about what is needed to deliver these outcomes, we will soon be back wading through the same treacle of compromise and capitulation that have been the hallmark of our negotiations over the last 2 years. The only strategy that is guaranteed to work by 31 October is the non-cooperative one outlined above. 

The new Prime Minister also needs to demonstrate conviction and commitment – and that involves putting Parliament in its place

A credible negotiating strategy is necessary, but it is not be sufficient. The new Prime Minister also needs to have ‘conviction and commitment’, as Dominic Raab has pointed out.  But Boris Johnson has already wavered by first stating categorically that the UK will leave the EU by 31 October and subsequently saying that this is merely ‘eminently feasible’. This change was immediately picked up by EU negotiators. One told the Daily Mail that the EU believes Johnson will end up trying to sell an amended version of the WA. This is perfectly plausible: after all Johnson supported the WA on the third vote.

The PM also needs to demonstrate conviction and commitment with the other group trying to block Brexit: the British Parliament.  It too needs a lesson in democracy.  We voted to leave the EU in June 2016 by a bigger majority than any vote that any individual MP has ever received. 

So if MPs are still determined to block the deal that the next PM sets or try to insist that the deal is put to a ‘confirmatory vote’ – weasel words for a second referendum to get Brexit reversed – then they also need to be blocked. They need to be made to understand that it is the people who are sovereign not MPs. 

One possibility that has been discussed is to prorogue Parliament until after 31 October 2019. Constitutional historians like Professor Jonathan Clark argue that this would not be ‘“unconstitutional”. [It] would be in accord with statute law, but applied in a situation that legislators could not foresee. [Nor] would [it] be “undemocratic”, for the point at issue is the clash between two sorts of democracy, representative and direct’.

However, prorogation might not be necessary since, in June 2019, Parliament voted down a Labour motion to block a no-deal Brexit. Indeed, Maddy Thimont Jack from the Institute of Government argues that MPs have no decisive route – such as legally binding backbench motions, emergency debates, amendments to the Queen’s Speech, or ‘no confidence’ votes – to stop a PM determined from leaving the EU on 31 October.

It is also written in statute – the 2018 Withdrawal Act. So long as the government avoids introducing new primary legislation of any kind before 31 October – which could be amendable by Remainer MPs intent on blocking Brexit, unlike secondary legislation – then the UK will automatically leave on 31 October.

Only a credible non-cooperative strategy executed with ruthless conviction and commitment by the new Prime Minister will get us out of the EU by 31 October

The message needs to be clear, simple, with no compromises. Time’s up for doing the same thing over and over and expecting a different result.Only a credible non-cooperative strategy that cannot be blocked by either the EU or Parliament will get us out of the EU by 31 October. And that strategy needs to be executed with ruthless conviction and commitment by the new Prime Minister. 

Update 1 (21-22 August 2019)

On 21 August, Boris Johnson flew to Berlin to meet Chancellor Angela Merkel to urge her both to ignore claims that a no deal Brexit can be blocked by Parliament and to scrap the Irish backstop. Mrs Merkel gave Johnson 30 days until 20 September to propose a suitable alternative to the backstop. He said that with ‘energy and creativity we can find a way forward’. The following day he flew to Paris to see President Emmanuel Macron.

These journeys will turn out to be a waste of time. A clear German perspective was given by Norbert Röttgen, an MP in Mrs Merkel’s Christian Democratic Union and Chair of Foreign Affairs Committee in the Bundestag, interviewed on BBC Radio 4’s World at One:

There is nothing to expect that there will be any common ground because there is no new proposal on the British side. [Keeping the backstop] is a European position…and it is a well justified position. It is only an insurance policy and we are convinced we cannot and must not compromise on the matter of the border,…unless there is a better solution. …We want a solution based on technology,…but as long as these solutions are only a vision and as long as we do not achieve these solutions, we need a mechanism to avoid a hard border. 

Mark Mardell: Are you operating on the principle that Boris Johnson wants a deal? 

I am absolutely convinced that Boris Johnson is being absolutely realistic and knows that neither Germany nor France nor the EU is able to compromise on this specific issue and he knows that he does not have any space for manoeuvre. So he is determined to try to crash out with a no deal scenario. However, he has yet to deliver this amid the fact that the majority of Parliament is against this way to proceed. 

Mark Mardell: Boris Johnson believes that the Germans and the French and the whole of the EU are holding on to see what Parliament does before they blink. Are you waiting to see what Parliament does?

Of course, of course. We are convinced that in a democracy, Parliament will have its say…on such a major fateful decision …But we will not blink in the event that Parliament fails to prevent Britain from embracing the no deal way.

Macron was even more explicit: ‘The key elements of the Withdrawal Agreement and the Irish backstop are not just technical constraints or legal quibbling. They are genuine, indispensable guarantees to preserve stability in Ireland and the integrity of the Single Market, which is the basis of the EU’.

In an earlier meeting with the Presidential Press Association, Macron suggested that Johnson did not take seriously enough the risk of reigniting the conflict in Northern Ireland: ‘There are still families whose children, brothers and sisters died in this conflict. To think of reviving that, because it suits us, would be irresponsible. I consider that Irish peace is European peace. We must not allow it to be threatened by a political and institutional crisis in Britain. [Irish reunification and integration of the entire island in the EU] would solve all the problems, but it is not up to France’.

In turn, the Irish Government noted the ‘very strong solidarity from our European colleagues on the need for the backstop. It has been welcome to see the British Prime Minister reaffirm his desire to leave the EU with a deal, while also acknowledging that the onus is on the UK to come up with viable alternatives to the backstop. It’s worth noting that the withdrawal agreement already allows for alternatives to the backstop, if they exist’.

It is clear from this that the EU views the backstop as a political weapon to control the UK after it ‘leaves’ the EU. It will therefore never accept that any technological solution will work.  Johnson will soon find himself wading through the same treacle of compromise and capitulation that have been the hallmark of our negotiations over the last two years – irrespective of whether Parliament finds a way to block Brexit. The outcome is very likely to be an amended version of the WA.

Once again, the only strategy that is guaranteed to get us out of the EU by 31st October is the non-cooperative one outlined above. This means that no deal planning in the UK must now go into overdrive.

 

About the author

David Blake

Professor David Blake is at Cass Business School