7 November 2018

Open Europe has today published a new report, “Resetting the backstop.” In this paper, Open Europe examines how the UK and EU arrived at the current impasse over the Irish backstop issue, and considers possible compromise solutions to reach an agreement and successfully conclude the withdrawal phase of the Brexit negotiations.

Key points

The UK and EU both share a commitment to avoiding the introduction of a hard border on the island of Ireland but are yet to agree on the means. The current impasse in the negotiations, which could result in No Deal, rests on the contested definition or purpose of the so-called backstop. It also arises from a fundamental lack of trust on all sides about commitments that other parties have made on the border.

The Irish Government seems to be pressing for a legally-binding backstop for a number of reasons, primarily to ensure that Northern Ireland does not diverge from EU rules in a way that would necessitate a physical border. It is also pursuing the backstop as a guarantee against a hard border in the event the UK and EU fail successfully to conclude negotiations on the future trade relationship. There is a legitimate concern about the border that will need to be addressed in the Brexit process, but it cannot be addressed in isolation and without reference to the future UK-EU partnership, which the EU has said cannot be finalised until after UK withdrawal.

The EU26 have also stood firm on the backstop, primarily to show solidarity with the Republic of Ireland, and to demonstrate the value of EU membership to smaller states. In doing so, the EU26 under-estimated the extent to which the issue would become a matter of controversy in British politics and risks leading to a No Deal outcome. In the absence of a UK-EU wide trade agreement, it is not clear whether the EU26 would ask Ireland to enforce a border with Northern Ireland or, for reasons of geography, whether a border would emerge between Ireland and the EU26.

Another possible reason for the EU’s position on the backstop is to secure political leverage over the UK in the negotiations as a whole, possibly in the hope of pushing the UK towards a soft Brexit, or a Brexit in name only, or even in the hope of persuading the UK to re-consider Brexit. To some in the UK, it has seemed that the EU is using the “politicisation of Northern Ireland” as part of a strategy of penalising the UK for the decision to leave the EU.

The UK has recognised the principle of the backstop since the UK-EU Joint Report in December 2017, but was slow to outline and defend its position and has allowed doubts to creep in about its good faith in the negotiations. It now argues that the function of the backstop is to serve as a temporary ‘bridge’ to any future UK-EU partnership. This would ensure that there is no period between the end of the proposed transition and the commencement of a UK-EU future partnership where, in the absence of any other agreements, a border would be required on the island of Ireland.

It is impossible to completely avoid a potential WTO-terms Brexit, including for Northern Ireland, until a future UK-EU partnership is concluded and in force. The idea that a Northern Ireland-only backstop could be practicable or enforceable in the absence of a wider UK-EU deal is implausible.

Therefore, the value to both sides of a “backstop-bridge” is to retain optionality on a successful conclusion of a future UK-EU partnership or alternatively a managed No Deal, neither of which are necessarily possible to conclude or the most desirable outcome now.

A backstop-bridge would be:

  1. Temporary: this does not necessarily mean time-limited but the UK must be able to exit such an arrangement if the UK and EU are unable to reach agreement on the future relationship. This should apply to all backstop arrangements, including any that would be Northern Ireland specific. The EU itself has argued that Article 50 cannot serve as the legal basis for a permanent relationship and this should also apply for Northern Ireland. The arrangements could be extendable by joint agreement or broken with a period of notice by either party. Otherwise the UK would be subject to treaty arrangements that prevented it from leaving the EU without surrendering some sovereignty over Northern Ireland.
  2. UK-wide: this could be achieved in different ways. Ideally, this would be achieved via early adoption of the trade aspects of the UK’s proposal for the future partnership i.e. UK wide alignment with EU rules on goods and a new customs arrangement as proposed at Chequers, or through the possibility of a “maximum facilitation” strategy of ensuring that the border is as frictionless as possible. However, the EU has so far suggested this will not be possible in the given time frame or at all. Therefore, the alternative options are:
  1. Extension of the proposed transition period;
  2. A combination of a UK-wide customs union and a regulatory backstop for Northern Ireland. This formulation would defer to the EU’s insistence that a regulatory backstop could not be applied UK-wide, as this would risk prefiguring the future partnership in a way that divided the four freedoms of the single market. Meanwhile, the UK could limit the emergence of regulatory barriers between Northern Ireland and Great Britain by voluntarily aligning UK regulation with that of the EU/Northern Ireland. Or, in other words, by not diverging from EU rules.

 Despite extending the UK’s contributions to the EU and prolonging a period of limbo, such a temporary backstop-bridge would be worthwhile to the UK to retain the option of successfully concluding a good UK-EU deal, which would need to settle the issue of the Irish border in a mutually acceptable manner. However, in the short-term, there is no way of avoiding the possibility of a WTO-terms Brexit entirely, since the prospect could return even after the UK enters the transition period at the end of March 2019.

Inevitably, the border question will return as a major issue in the next round of the negotiations on the future relationship. A compromise on the backstop is needed, and elements of the existing withdrawal proposals are welcome, as are the commitments on the Common Travel Area and the statements of support for the Belfast Agreement. However, there is a risk that if the UK signs up to a Withdrawal Agreement containing a Northern Ireland-only backstop, or a permanent “backstop to the backstop”, the UK will be at a disadvantage as it negotiates its future relationship because the EU could yet again present its interpretation of the backstop as a hurdle to any deal. This could be destabilising for Northern Ireland and the future negotiations. There is an onus on the Government and MPs to make sure they are clear about the legal and political consequences of the backstop at this stage.

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