Can a Chaotic "Crash Out" BREXIT, in December 2020, be Avoided?

by JOHN BRUTON

Published:  John Bruton Opinions and Ideas, 21 November 2019

 

“Let’s get Brexit done” is Boris Johnson’s election slogan. His implication is that, once he gets a working parliamentary majority to ratify his revised Withdrawal Treaty, Brexit will be quickly done and dusted.

This is over optimistic, to put it mildly.

There are three realistic outcomes to the Election, a Tory majority (the most likely scenario at this stage), a Labour led government with the support of other parties, or a hung Parliament in which no one can command a majority and form a government.

Even if Boris Johnson wins a majority, to get Brexit done he will still have to conclude a very complex trade negotiation with the EU, within an almost impossibly tight self-imposed time line, by December 2020 (the end of the post Withdrawal Transition period).

He has tied himself be a commitment to Nigel Farage that there will be no extension of the December 2020 deadline. This is how he got the Brexit Party withdrew its candidates in all Tory held constituencies.

Reneging on that promise, because the negotiation need more time, would be costly for Boris Johnson, especially as it would also extend the period in which the UK would have to continue contributing to EU funds.

If he were to change his mind and look for an extension of the post Withdrawal transition period beyond 2020, he will have to give notice of this by July of next year. The Withdrawal Treaty (Article 132) only allows for one extension of either one or two years. This is different from Article 50 extensions on which there is no legal limit.

If the deal is not done before the end of the (very short) transition period, then the UK crashes out of the EU with no deal at all. Remember this Trade deal will have to be ratified in the parliaments of all the EU member states, unlike the Withdrawal deal which only needed ratification by the European Parliament. So a crash out/no deal scenario is a major risk.

The implications of this for Ireland, and for the UK itself would be grave.

This is only one scenario, the Tory majority scenario/

The other scenario concerns what happens if Boris Johnson fails to get a majority.

Obviously if he fails , the next steps will have to be decided by a replacement government.

But who will head such a government, and what will be their Brexit policy? Neither question can be answered at this stage.

It is unlikely that Jeremy Corbyn’s Labour Party can have a majority on its own. But Labour might be able to form a majority with support from the Scottish National Party, in return for a pledge to hold a referendum on Scottish independence.

Another possibility is that Labour could make an arrangement with the Liberal Democrats, but they would want a Prime Minister other than Jeremy Corbyn.

That could happen. If a majority of MPs said, in writing, that they wanted as Prime Minister, an alternative named Labour Party MP, not the leader , the Queen would call on that MP to form a government.

Either of these Labour led alternative governments would hold another referendum on Brexit . It might also seek amendments to the existing Withdrawal Treaty before holding that referendum.

This process would take a year or more to complete, so a lengthy extension of Article 50 would have to be sought. Meanwhile to UK would continue to contribute to EU funds.

All this would be quite messy, but it would be preferable to a crash out, no deal, Brexit a year from now, which might occur if a majority Tory government were to make unrealistic trade demands of the EU.

A third possibility is that no potential Prime Minister could be assured of a majority in Parliament. Given that the UK now has a 5 party system, rather than the 2 party one it had for the past century, this is a real possibility. The Fixed Term Parliament Act requires the calling of another Election, 14 days after a no confidence vote, if no government can secure the confidence of Parliament within those 14 days.

But let’s acknowledge that, at the moment, the most likely outcome is a Tory majority government. What happens when it proceeds to implement the revised Withdrawal Agreement and negotiate a Free Trade Agreement(FTA) with the EU?

Given that the new Tory Parliamentary Party will be more radically pro Brexit than the old one, the UK negotiating position on the FTA could be very demanding and very difficult for the EU to accept. Some of the new Tory MPs might even prefer a “no deal” on ideological grounds.

Before negotiations with the UK begin, the EU side will have to secure a negotiating mandate from the 27 member states.

This will not be easy. Many states will have sensitive issues vis a vis the UK, for example:

  • fisheries for Spain
  • agriculture for France
  • rules of origin for all members, and crucially
  • the maintenance of a level playing field for competition between firms inside the EU and those in the UK

Boris Johnson has said that, for him, the UK being able to have different environmental, social and product standards is the “whole point “of Brexit.

There are real fears that UK would try to undercut the EU in these fields.

So the EU will demand firm justiciable guarantees in the FTA that this will not happen. They will not take anything on trust. They will want a court to decide.

Likewise, the EU will want justiciable guarantees that the UK will not give subsidies to its industries, of a kind that would not be permitted in the EU.

The EU demand of binding arbitration will raise an allergic issue for Brexiteers. The idea, that a “foreign court” might tell them what to do, is anathema to them.

If that is not agreed, it is hard to see how the EU could give up the possibility of introducing tariffs on UK exports to the EU, to level up the playing field.

Similar problems arise for agriculture and fisheries. The UK needs to decide what sort of farm policies it will have and if these will depart radically from EU norms.

If the UK tries to stop access for EU trawlers to its fishing grounds, it cannot expect tariff free access to EU markets for UK fish exports. Physical confrontations at sea are a real possibility.

There will also have to be a negotiation about cooperation between UK and Europol, and about money laundering.

The position of Norway, will have to be considered. It contributes to EU funds in return for access to the Single Market. The UK cannot expect more, for a lesser contribution, than Norway makes.

The position of countries like Japan and Canada, who have trade agreements with the EU , will have to be considered. They will look for any concessions the UK is given, other things being equal.

The earliest that the two sides would even be ready to start negotiating these difficult questions would be March 2020. On that basis, it is hard to see how it could all be wrapped up by December of next year.

Remember the Canada Agreement with the EU took eight YEARS to negotiate, and the political atmosphere between Canada was much better, and the stakes much less, than is now the case between the UK and the EU.

Brexit is far from done. It is entering its dramatic second Act.

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