Brexit: The facts behind the headlines

EU UK Exit_49749

With endless column inches being dedicated to the political conversations around Brexit, our team in Brussels has set out the facts behind the two outstanding issues causing the most controversy, and what they mean for your farming business: the Irish Border and what happens after we leave the EU.

Issue 1: Avoiding the border

“The Irish Border” has become such a staple of Brexit conversations that we take for granted what it means. In most contexts it refers to the proposals for avoiding a physical land border on the island of Ireland, which would come into force should no other arrangements be found in negotiations during or after Brexit talks. More specifically called “the backstop,” it is a key part of the legally binding Withdrawal Agreement that is being negotiated.

In December last year, the UK and EU agreed this backstop in principle. The EU then went on to describe what it believed this would actually mean in practice. In brief, the proposal is that Northern Ireland would be afforded special status and remains in the customs territory of the EU. It would entail the continual application of many EU rules; including those relevant for agriculture such as animal health and welfare. While this would eliminate the need for checks to ensure that products meet these standards at the land border, it would require them at ports when they enter the island from Britain, and are implied for transit the other way, too. While this avoids the “hard” land border, the UK believes such an approach amounts to a border in the Irish Sea and would threaten the very integrity and unity of the UK.

There is clearly no overarching agreement on this issue. But behind the scenes there is tangible work ongoing to “improve” the EU’s proposal as the EU’s Chief Negotiator, Michel Barnier, suggested recently. The current understanding is that the negotiators are attempting to rework elements of the proposal. In essence they suggest using technology and other methods to streamline the product checks at ports, as well as carrying out some on the boats themselves. Essentially the idea is still to have border checks, but carry them out in specific ways and locations so as to avoid anything particularly visible – and crucially not on the land between the Republic of Ireland and Northern Ireland.

The UK has proposed an alternative, which would in effect keep the whole country aligned in a similar way to the Commission’s proposal on Northern Ireland with the EU for a time limited period. While this has already been rejected by the Commission, the UK will present another in the coming weeks. Although Theresa May has said that a border is still a border no matter where it is, the gambit is that the reworking – and stressing that this backstop is never foreseen to come into force – will yield something politically acceptable for both sides.

Issue 2: The future beyond Brexit

The above might appear to present a concession from the UK, and one that Prime Minsister Theresa May would flat out reject, but it’s useful not to dismiss it out of hand without linking it to the second issue of this article: the political declaration on a future relationship. This is where a second indispensable Brexit term – “Chequers deal” – comes into play. The Chequers deal refers to UK proposals for a future EU-UK relationship that would come into force after the planned transition period (during which time the UK applies all EU rules and decisions) comes to an end in December 2020. In summary, the UK is seeking a Free Trade Area with the EU that would operate in such a way as to avoid product checks for goods at borders. It would do this through a unique customs arrangement, which would still allow an independent UK trade policy, and through identical or equivalent rules on goods, crucially including agri-food products, guaranteed in a Common Rulebook. 

Reproducing all of the arguments for and against this approach, including how realistic it is to put into operation, is not the point here. Rather the point is to simply get a deal. While it has been clear that even before the Chequers deal was proposed the EU would not accept it, the fact is that it is seen a starting point for negotiation and its ideas could be included in the declaration on the future relationship. But here is where the UK’s frustration lies – that the EU will not seriously engage with the economic partnership ideas in the first place as it sees them as fundamentally in contradiction with the integrity of the Single Market.

Linking the two and doing a deal

Reading the above a deal seems rather far off. In theory only the Withdrawal Agreement is needed, but in reality the future relationship declaration is required, too. Neither side will agree to both unless they are equally (un)happy with both. However, negotiation requires concessions and a way forward can be sketched out. The UK clearly believes that it has conceded enough in putting Chequers on the table in the first place and simply cannot accept the proposals for Ireland. The EU is adamant that it cannot concede on a future relationship, for legal and political reasons, in order to keep the Single Market together and functioning successfully. Both sides are seeking to get the other to concede more, but there is another possible outcome that Brussels is infamous for and very good at: compromise.

In this instance what we could see is that the UK finds elements, and crucially the language, of the reworked backstop acceptable enough and judges it can get through a vote in Parliament even though materially it doesn’t eliminate the need for product checks between Britain and the island of Ireland. In securing this, the EU agrees to a future relationship declaration that, while it is not explicitly the Chequers deal, uses some of the language of the proposals, such as “Free Trade Area” for example, and points strongly toward other elements to give the UK the reassurance it needs that it will have a future relationship along the lines it wants.

Both possibilities described here are imperfect, but that’s precisely the point. Neither side wins, but neither truly loses as deal is done and the next stage can begin – the very essence of a compromise.

Where does this leave farmers?

The presence or absence of a Brexit deal, and the nature of it, is absolutely fundamental to the fortunes and operation of UK farmers.  This piece does not seek to advocate one outcome over another. Instead it seeks to shed light on what the rhetoric about concessions and trade-offs refer to in practice, which can help us better see the eventualities to plan for. Described here is one possible “landing zone” for negotiations, but by no means is this one, or any for that matter, definitely going to happen. But if the UK does accept EU proposals for checks, even if they are not traditional, we can already think about the implications for those of us with a stake in Northern Irish supply chains. Equally if the future relationship is based on a set of common regulations, then we can think early about remaining compliant on-farm. And if we can see problems with either approach sooner rather than later, then we can make the representations to government too.

Nothing has been less certain for UK farming in a very long time. But never has it been more important to ask the NFU to understand and explain what is going on beyond the yard, so that you can get behind the headlines and make decisions with as much of the information as possible.