Trade, transition, and the Irish border: A Brexit talks crib sheet


European Union (EU) negotiators, the UK government, and its opposition will all set out their priorities on Britain’s upcoming exit from the 27-nation bloc this week. Here’s what we know about their positions on the most important issues for Brexit, which has dominated UK politics for two years and continues to divide the country.

These three stakeholders are now drawing clear dividing lines on certain issues such as membership of the European single market (which minimizes all barriers to trade) to that of a customs union (which would have some barriers, such as regulation of financial services or restrictions on agricultural trade). The UK is due to leave the EU on March 29, 2019.

The core issues at stake are interwoven. According to the EU’s negotiation guidelines, it will not compromise on the principle that membership of the existing customs union and single market must be tied to maintaining free movement of people and jurisdiction of the European Court of Justice (ECJ).

Theresa May’s government has indicated it will sacrifice single market and customs union membership to gain regulatory and jurisdictional independence, but these positions must be reconciled with decisions on the border between Ireland and Northern Ireland.

If a “hard” border is required to police immigration and trade, some, including opposition Labour Party leader Jeremy Corbyn, say this potentially threatens the peace agreed under 1998’s Good Friday Agreement. This affirms the UK and Irish governments’ commitment to cohesive “cross-border” policies where possible. The EU President, Donald Tusk, implied that the Irish government would be able to veto any deal on Brexit (Guardian).

Corbyn began this week by setting out his party’s position on certain issues and drawing a clear distinction between Labour and May’s government, which does not hold a majority in the UK parliament.

On February 28, the EU will set out its position in new detail by publishing a draft of a treaty defining the relationship between itself and a post-Brexit UK.

Finally on March 2, May is expected to respond by delivering a speech that should outline her government’s response, before negotiators meet to continue talks the following week.

Trade

  • The UK government has stated that the UK “cannot possibly” remain inside the European single market and the customs union relationship would change so London could make trade deals with countries around the world. May has suggested certain sectors, such as financial services, could enjoy the benefits of European single market membership.
  • The EU says that a bespoke deal for the UK to remain in the single market or existing customs union, but without ECJ jurisdiction or tighter control over EU immigration, is out of the question.
  • The Labour Party favors UK membership of a new post-Brexit customs union (a different customs union to that which it is currently included as an EU member) which would prevent tariffs on goods traded between the EU and UK, while allowing the UK to strike new trade deals with other countries.

Regulatory issues and the ECJ

  • The EU says that as long as the UK is in the single market or customs union, it must be subject to EU law and under ECJ jurisdiction (including for any transition period), even if it forfeits its right to influence such regulations.
  • The UK government said in a paper released February 21 that it would be open to regulatory alignment and ECJ oversight for the duration of a transition period lasting “around” two years.
  • The Labour Party has previously said it would be open to some regulatory alignment if it meant the UK could maintain the economic benefits of single market membership. Corbyn did not mention the ECJ in his speech.

The Irish border

  • EU negotiators are planning a “last resort” option for the border between Ireland and Northern Ireland, under which the latter remains fully aligned with the EU’s regulatory regime, according to the FT.
  • The UK government has previously said that this option, which would create regulatory barriers within the UK, is unacceptable. EU negotiators told the FT they are waiting to hear alternative proposals from May’s team.
  • The Labour Party said that its position on trade means that there would be no need to impose border controls between Ireland and Northern Ireland. Corbyn’s reference to “bogus immigration targets” has been read to mean that his government would not seek to impose immigration controls on the border.

 

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