Why MPs should vote for Boris Johnson’s deal

Why MPs should vote for Boris Johnson’s deal

MPs are to be faced with the choice of voting for Boris Johnson’s new deal with the EU, including the completely new Northern Ireland Protocol.

1. Is this a revamped May Deal?

Some have suggested that Boris Johnson’s deal is simply a revamped version of Theresa May’s deal. That is emphatically not the case. The table below summarises some key differences:

2. Some have suggested that the transition period means we are not really leaving the EU

This is also not the case. Our status in the transition period is completely different from our status in the EU in the following important ways:

What we can do in the Implementation Period (IP) that we cannot do as an EU Member

1. Negotiate, sign and ratify trade deals

This is hugely significant. It means that the UK, as a sovereign nation for the first time in 45 years, can deal with other sovereign nations on equal terms.

2. Start the work developing our new regulatory system and domestic settings in preparation for the end of the IP.

With regard to the European Communities Act 1972, it is true that the Withdrawal Act repealed it, and the Withdrawal Agreement and Implementation Bill (WAIB) will revive it for the duration of the transition period. However it is revived in temporary suspended animation until it expires naturally at the end of the transition period. That is a very different legal position from being a normal statute which must be repealed by an Act of Parliament.

3. MEPs will not be in place. The UK will not be involved in EU decision-making. The UK will be emerging as a fully sovereign nation.

The IP is the necessary path to sovereignty. Nobody particularly wants it, but it enables businesses to adjust, and it is for a short time with limited risk. If the EU seeks to damage the UK in the period, it will be up to the UK to defend itself. The tools for that defence include the duty of sincere cooperation (so often used against us, but its principles flow both ways) and international law principles of wrongfulness, where we would pray in aid all the good regulatory practice obligations the EU has signed up to in multiple fora including the WTO, OECD and its own trade agreements. The European Scrutiny Committee, led by Sir Bill Cash, provides an early warning system for new regulations emanating from Brussels, and we should use it to understand how those regulations affect our interests. Presumably no-one is suggesting Sir Bill Cash will be soft on EU regulatory threats in the transition period.

3. We must also consider what the alternatives to voting for this deal actually are

Negotiating dynamics are against the UK

Because of parliamentary numbers, the Speaker and Benn Act, the UK has no leverage – which the EU well knows and has used. Frankly, the Prime Minister has done extraordinarily well to secure the concessions he has secured. Let us not be under any illusion, the only alternatives to this deal are a) extension, b) possible revocation or c) a second referendum. Jean-Claude Juncker’s casual statement that he would not prolong the extension has already been shot down by officials in the European Commission. It is hard to see Germany letting the UK leave without a deal, as was made clear in the last summit. Our leverage is declining by the day.

Our need for leverage does not end with this deal; indeed, it increases in the next phase. Because of the parliamentary numbers, the UK’s only real leverage is external. An extension would effectively rule out a US deal (as they will go into their election cycle in March of next year and will lose focus on the UK-US deal). Failure to land a deal will further erode the support the UK has from the Democrats and the Speaker of the House in particular. The US put out their negotiating objectives in January. To them, it is extraordinary that we still have not put out ours. Australia and New Zealand will be much further along in their negotiations with the EU and much less interested in the UK. Our window on CPTPP will also close because the Japanese want us in early before the other round of accession countries. To succeed in Phase 2, we need concurrent negotiations and the more the timetable slips, the less likely that becomes. Put simply, the world will move on, leaving the UK and EU to sort out their mess between them.

If Brexiteers don’t support this deal, it will also make a softer deal much more likely (including Customs Union membership) if there is a delay. More recent deal advocates (e.g. Labour for a Deal) want a softer deal (CU and/or EEA). If some Brexiteers don’t vote for this deal but it is carried on the back of some Labour votes, the risk of a customs union in the end state becomes exponentially greater – precisely what Brexiteers do not want to see. If they don’t vote for it and the deal does not pass, the risks of no Brexit increase exponentially.

4. Other key aspects of the new Northern Ireland Protocol

This deal makes Northern Ireland a potentially powerful export platform into Great Britain and the EU (via Ireland) as there will never be tariffs or quantitative restrictions on NI/GB or NI/IE trade. In a Free Trade Agreement, this could be translated into a special tariff regime for Northern Ireland, or a subpart of the UK tariff schedule. GB traders into NI will make customs declarations in GB facilities for trade onward into IE, or not make customs declarations at all if trade is only into NI.

During the transition period, the parties will establish the criteria for considering that a good is not at risk of entering the EU.

For products entering NI from GB, they will pay the Common External Tariff (CET), subject to a rebate if they are not going to be processed or travel into the Republic of Ireland. For products entering NI from outside the UK and the EU27, the CET is paid and then a rebate collected if goods are destination UK (and the tariff lower). The UK can compensate undertakings to offset the impact of these procedures (similar to the Transitional Adjustment Fund proposed by the report of the Alternative Arrangements Commission).

The two common regulatory areas apply, provided consent is given, which is determined by a unilateral declaration of the UK at the end of the initial period in four years’ time based on a simple majority vote – if there is cross-community consent then the arrangements are in place for eight years, if a simple majority, then for four years. The consent mechanism applies to both the customs and regulatory arrangements. This gives four years for realistic alternatives to be put into place if they are needed. In the event of no consent, then there are two years to find alternative arrangements.

While it is true this suggests some differences between GB and NI, it cannot be said that this is bad for the Northern Irish economy. Far from it, the protocol gives NI businesses benefits that other GB businesses won’t have in terms of access to the GB and EU markets. It creates a unique situation for businesses in NI who also gain from both UK and EU trade policy. These clear economic benefits are no doubt why NI businesses have come out in favour of it. While the views of NI businesses may not be central to the totality of UK trade policy (meaning that there are other competing constituencies and views), the views of NI business when it comes to the NI economy are central.

This solution is also unique, because of the unique circumstances of the Irish border and the history of the Troubles. There is no way that it can be used anywhere else. To the extent that it raises WTO challenges, these can be justified on the basis of the National Security exemption. That exemption would not apply to any other border inside the UK single market.

If one takes a simplistic view that the Union is protected only if there are no differences between NI and GB, how then can one explain the Single Epidemiological Unit, the Single Electricity Market, the exemptions to the UK Climate Change Act for Northern Ireland so the SEM can work, the differences in specific UK legislation that often does not apply to NI (the latest version is the Bedroom Tax which has not yet been applied to NI). No, what strengthens the Union is giving people, farmers and businesses in Northern Ireland reasons to stay in the UK be they cultural, historical or economic. In the economic sphere, this deal provides a pathway for a whole range of additional reasons that do not apply now.

5. Some have suggested these arrangements are permanent. That is not true either

The NI Protocol may be terminated through the Consent Mechanism or because it is superseded by the provisions of the ultimate FTA. This Protocol is far less objectionable than the May backstop. Therefore it will not be so disastrous if a refined version of it forms what will likely be the Northern Ireland protocol to the FTA’s customs and trade facilitation chapter. That said, improvements can and should be made and negotiated and we will have time to do that if this deal is passed.

Much further work needs to be immediately done in the following areas, either by the newly-created Joint Committee (where the UK must have ministerial representation – because in trade, what seems purely technical is actually a political judgment call) or by others:

  1. The criteria and manner in which the Joint Committee will determine how the East-West channels for flow of goods will operate, potentially with different channels for goods headed to different destinations. This will be important to minimise the differences between NI and GB. We made a number of suggestions that are applicable here in the Alternative Arrangements Commission report.
  2. The precise mechanisms for the rebate mechanism must be determined.
  3. The manner in which checks in the ports and harbours of the Irish Sea can be minimised and made less intrusive, especially for trade between GB and NI. Many of the Alternative Arrangements Commission report recommendations are also applicable here.
  4. In anticipation of the FTA, we should examine whether a more forensic approach to the specific EU customs processes can be applied to mitigate the real risks associated with NI being in the UK and not the EU customs territory.
  5. In the event consent is not secured at any time, meaningful arrangements will have to be in place and will have to be operable within two years. It is advisable therefore to prepare them in advance so a real choice can be given to the Northern Irish people. It is certainly possible to envisage a situation where the regulatory differences between GB and NI are so great that NI firms wish to benefit from the GB system as opposed to the one prevailing in the Republic of Ireland. If that state occurs, we must be ready to provide them with a real choice.

This is not a perfect deal by any means. For the UK negotiators who delivered it, it is tragic that they had to start from the previous Withdrawal Agreement, and that they had so little time to work with. In the circumstances, they have worked a miracle. It bodes well for the future. We should take this chance before it, and Brexit, slip through our fingers.