Article 50, Backstop, Brexit, Negotiating, Theresa May

The #Brexit #WithdrawalAgreement negotiation – Could Anyone Else Have Done Better?

This Blog was written on Sun, Dec 2nd 2018


Commons Vote

At the time of writing the Commons vote on the EU/UK Withdrawal Agreement looks like it will result in a very heavy defeat for Prime Minister Theresa May.

Depending on which pundit you heed, anywhere between 65 and 90 Conservative MPs are expected to vote against the WA. When you add the government-supporting DUP, as well as all the opposition parties. the majority against could be up to 200 votes. For the moment there is little point in speculating as to what happens next. Quite simply, no one knows.

So, when Michael Barnier, Donald Tusk and Jean-Claude Juncker on the EU side, and Theresa May on the UK side, say that the Withdrawal Agreement, and the accompanying Political Declaration, is the only deal available and that the choice facing the UK Parliament is the deal on the table, no deal, or remain in the EU, are they right?

I believe they are. That is indeed the choice MPs are faced with. Of course, the choice can be passed by parliament to the people in a second referendum, but it will still be the same choice: deal, no deal or remain.

Does the position the UK find itself in result from a negotiation failure on the part of Theresa May and her team? No and yes.

There are three dimensions to any negotiation:

The first is the substance of the agreement you make with the other party.

The second is managing the expectations of those you represent as to what is achievable.

The third is keeping your wider team together, all of those with a say on the deal you bring back.

It seems to me that May has done all she can on the first, the substance of the agreement with the EU, but has failed completely on the other two. Which is why she is staring defeat in the face.

The exit deal on the table is the logical result of the process set out in Article 50 of the EU Treaty, though that result is complicated by the Irish backstop, to which we will return. That deal consists of the legally binding Withdrawal Agreement and the aspirational Political Declaration.

Quite frankly, all that matters for now is the Withdrawal Agreement. Aspirations can wait. Article 50 set things up that way. There was no other available outcome to the negotiations. This is as good as it gets.

But the Prime Minister is where she is because she failed to inform and consult her colleagues at all stages of the process and take them with her. She has also been, and still is, less than frank with the UK electorate about both the process of Brexit and what could be delivered under Article 50. If there is confusion and misunderstanding about what is before parliament then that is solely down to the Prime Minister.

The relevant wording of Article 50 of the Treaty reads:

A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union.

The EU interpreted the withdrawal process in a sequential way. First, negotiate the essential exit terms then, when sufficient progress was made on these terms, move on to the future framework. As we said in last week’s Briefing, the UK wanted a “big bang” approach with everything on the table at the same time. The EU just said no, and the UK folded.

Why? Because the UK is not being expelled from the European Union nor has it been asked to leave because it has behaved unruly. It voted to leave. It wants to go. As most readers of this Briefing will know, only in very, very exceptional circumstances does someone who resigns get a say in the terms under which they will leave. “I’m leaving anyway but I want the following compensation package” is not much of a bargaining position.

Your BATNA (best alternative to a negotiated agreement) is non-existent. When your soon-to-be former employer looks you in the eye and says if you are leaving anyway why should we pay you anything, “because I’m exceptional and worth it” is not much of an answer. Leavers have very little leverage.

Look again at the wording of Article 50 and it becomes clear that there are two aspects to a withdrawal agreement: the arrangements for withdrawal, and the “framework for the future relationship” between the withdrawing country and the EU.

The first part, the arrangements for withdrawal, has to be legally binding because it details the terms for the ending of the relationship.

The second is simply a “framework”, a potential direction of travel, because the new relationship can only be negotiated after a country has left and become a “third country”. Best that a “framework” leaves open a range of possibilities, giving the parties a degree of flexibility as events unfold.

The package that May has negotiated with the EU does precisely both of these things. It sets out withdrawal terms covering citizens’ rights, financial obligations and, the complicator, the Irish backstop. UK trade Forum have produced a very useful, and factual, guide to the WA.

The Political Declaration is just a statement of aspirations, with nothing agreed or settled. All possibilities remain open.

During the 2016 referendum campaign those in favour of the UK leaving the EU made it all sound so easy. There would be no downsides, only upsides. The future deal with the EU could be done in an afternoon over a cup of tea. After all, the UK held all the cards.

By the end of the two-year Article 50 notice period the UK would not only have agreed withdrawal terms, and these would cost nothing, but a new comprehensive trade agreement would have been signed, sealed and ready for signature a minute after midnight on March 29, 2019. The UK could have its cake and eat it: all the benefits of the EU with none of the obligations.

The Brexit offer was, in the words of the song:

A whole new world
A new fantastic point of view
No one to tell us no
Or where to go

Instead, as Neil Diamond might have put it, it turns out that this Brexit “was only true in fairy tales”.

May was always what we have described previously as a “light remainer”, one of the many UK politicians who had no real feel for the European Union but thought being a member was the least bad option.

When she became an accidental Prime Minister, after the Brexiteers had stabbed one another in the back, front and anywhere else you can think of, she had an opportunity to reframe the issue. She could have defined Brexit in a deliverable way and began the process of managing expectations.

Instead, she decided to frame Brexit in the hardest terms possible: an end to free movement, completely outside the jurisdiction of the European Court and an end to payments into the EU budget. Once May had drawn these red lines then the future “zone of settlement” was clear. It was well illustrated in Michael Barnier’s famous “staircase” (here).

Outside the EU the closest relationship with the EU available is a European Economic Area style deal, or a variant of it because as it stands today the EEA was never designed for a country the size of the UK. The UK is not Norway, still less Iceland or Liechtenstein. But May was never prepared to explore going there, to suggest that Norway could be the future direction of travel because that would not allow her to end free movement and it is now clear that ending free movement has been her burning ambition for Brexit, if not her only ambition.

At the other end of the spectrum is a trade agreement a la Canada. But that creates barriers to trade compared to today and the wrench to just-in-time supply chains would be a hammer blow to the UK economy.

Start at the bottom with Canada and walk up the stairway to heaven. Start with Norway and all you can do is drive down the highway to hell.

May’s red lines, however, are not the problem because they only come into play when the real negotiations get under way after the UK has left the EU.  If the UK wants its future relationship to be “Canada” rather than “Norway” then that is its sovereign decision, whatever the costs.

Her real problem was allowing the perception to grow that, despite her red lines, the UK could still have frictionless trade with the EU but, and very much worse, that this could all be delivered before the UK actually left the EU on March 29th, 2019. The Withdrawal Agreement became conflated with the new economic relationship that could only be negotiated after the UK had left.

Of course, other voices inside and outside government were saying much the same things and worse. Perhaps the greatest of the canards was the one given rise to by Boris Johnson that, on leaving, the UK owned not a penny to the EU and that unless the EU delivered a gold-plated trade deal to the UK it could “go whistle”. May never took this head-on and never explained to the electorate that there were obligations to be honoured, irrespective of what happened in the future. Even now, there are politicians who complain that May’s agreement is giving the EU “€40 billion for nothing”.

Allowing the public and politicians to conflate the Withdrawal Agreement and the future agreement means that MPs are looking at what has emerged from the Brussels negotiations as a package and will vote accordingly. There seems to be little argument about citizen rights and the financial settlement. Most of the political criticism centres on the fact that the future relationship is not locked down and that the Irish backstop limits the UK’s future freedom of manoeuvre.

But hey, if you promise people a black forest gateau, topped with cherries, and all you end up bringing back is a baguette, even a perfectly good baguette, you’re in a difficult place when they complain bitterly that you haven’t delivered.  Don’t promise what you can’t deliver.

May also proved less than adept at keeping her team together. While we will have to wait for the papers to be opened to prove it, by which time many of us writing about Brexit will have made use of the ultimate freedom of movement, it does seem clear that Brexit has been driven solely and exclusively by her.

She now owns it. She directed the negotiations, which were handled day-to-day by a civil service team, with the Brexit Secretaries of State little more than “front of house” men. A bit like those guys who stand outside restaurants in Brussels trying to pull you in by promising a great meal at incredibly low prices. Once inside you discover that the reality is somewhat different, actually, very different.

It seems clear that May kept her cabinet colleagues out of the Brexit loop. She also kept the opposition parties at arms’ length. Whenever possible she fought to keep information secret, away from members of parliament and all concerned stakeholders. Nobody could be trusted. Even now she refuses to release the legal advice on the Withdrawal Agreement. Not suitable reading for children.

Remember, back in April 2017 at the infamous dinner in Downing Street with Juncker and Barnier (here) May suggested that “Brexit negotiations could take place in monthly, four-day blocks which would remain confidential until the end of the process.” On the British side, only she would know what was going on. Juncker told her that this would be “impossible” given the need to consult member states and the European Parliament. “All documents must be published,” he is reported as having said.

Seasoned negotiators know that “intraorganisational bargaining”, the need to continually talk with your own side to keep them on board, is vital. “No surprises” is a useful rule of thumb. If you fail to keep your own people with you by concealing information and then suddenly confront them with fait accomplis then will walk away when you most need them. (See this on how May has singularly failed to build a backing coalition for her approach to Brexit here).

If you are not a team player, you can’t complain when the team does not turn up on the day.

Any other country outside the eurozone leaving the EU would simply have to negotiate a withdrawal agreement covering citizens’ rights and financial obligations along with a “framework” on its future relationship with the EU. The complicating factor for the UK is Northern Ireland. (see last week’s Briefing for a full discussion on this as well as here and here).

To avoid the return of any border infrastructure in Ireland, May accepted the Irish “backstop” set out in Article 49 of the Joint Report in December 2018. This left the DUP, on whose votes she depends, deeply unhappy as they saw it as creating barriers between NI and the rest of the UK. To get around this, May proposed that the backstop apply to the whole of the UK after the transition period until such time as new arrangements were negotiated. This dragged part of the future relationship into the Withdrawal Agreement.

All the backstop does is to keep the UK in a “bare bones” custom arrangement, which means no tariffs, quotas or fees. What it does not do is guarantee “frictionless” trade between the UK and the EU as this grows out of single market regulations and procedures. But the idea has taken root that the backstop is a prison which the UK can never leave.

Actually, the UK can leave anytime it wants, as long as arrangements are made to ensure that there is no border in Ireland. The choice is the UK’s, but it is a choice that May does not want to make.

So, allowing unreal expectations to grow, failing to inform and consult colleagues and mishandling the Irish backstop has got the Prime Minister where she is. She has lost her own side. But that still does not take away from the fact that the deal on the table from the EU is all there is and is all there will be.

Would the EU be prepared to change it? In my opinion, no, because it meets precisely the requirements of Article 50 of the treaty.

Could anyone else have done better? At a talk in London during the past week the Irish historian Brendan Simms is reported as saying that allowing Brexit to be negotiated by a mainly Remain supporting government and a British civil service integrated into the EU system is like asking the English cardinals to negotiate the English Reformation.

Speaking to a half empty chamber in the European Parliament at a session this week, arch-Brexiteer Mr Farage said it is a “good deal for the EU but hated in Britain… It is a good deal for the European Union. For the UK, I think it is probably the worst deal in history…. Mr Barnier, I have to say, I wish you were on our side really, because it is game, set and match to you.”

Both sets of remarks play to the notion of the “great man or women” theory of negotiations.

Somehow or other there are “black magic secrets” to the “art of the deal”. If only our negotiator was possessed of these secrets, and truly believed in the cause, all things would be possible.

Barnier delivered what he did not because he is Merlin or Gandalf the Grey but because the power and the leverage lay with the EU. He also managed expectations and kept his own side fully briefed at all times.

May has delivered all she could with the “zone of settlement”. Her problems stem not from the negotiating ability of her team, but from her failure to structure both public and political expectations and her lack of collegiality. She walked the Brexit road alone, instead of at the head of a united group of travellers.

You end up where you are because of what you do or what you fail to do.

Oh, and historians are better off sticking to history.

2 thoughts on “The #Brexit #WithdrawalAgreement negotiation – Could Anyone Else Have Done Better?

  1. Brexit was, and even at this late stage still is, such an ill-defined concept, that the very words “better” or “worse” in relation to it become almost meaningless. Its “beauty is in the eye of the beholder”. For every Leave voter there is a different definition of better and worse, depending on what they didn’t like about the state of affairs before the referendum and how they feel Brexit would improve matters.
    May could not have done better, given her own set of red lines, which in the end appear to boil down to stopping freedom of movement.
    A Norway-type endstate would be better economically, but worse in terms of the UK’s say in determining the rules it will have to abide by.
    On the other hand, seeing as the UK has always been the main driving force behind eastward expansion and introduction of neoliberal values into the socio-economic arrangements of the EU, a lessening of its influence would probably benefit a great number of the poorer Leave voters.
    Brexit still is nothing more or less than a mirror in which each individual sees their own values reflected back at them.
    This is also true for the country as a whole. Brexit has exposed the fragility of the Union itself. During this process, all of the English ruling class’ vanities and weaknesses; its arrogance, ignorance and self-centredness, have been on display for all to see. Its democratic processes have been tested and found wanting.
    It is shocking to see what the country has become.


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