The Northern Ireland and Ireland Protocol of the legally binding Withdrawal Agreement (once approved and ratified) provides for a NI backstop that diverges in both principle and spirit from that defined in December 2017.
It is thus termed, here, the WA backstop, to differentiate it from the overarching NI backstop.
A common customs territory is created, where no quotas or tariffs would be applied on goods circulating between the UK and EU. It is not comprehensive, however, failing, for instance, to make express provision for road haulage or agri-food movement (services), the absence of which would result in bottlenecks and delays at the UK-EU border.
Even more crucially, the WA backstop does not provide for continuing regulatory alignment at the UK-level for goods, which is also necessary if continuing full frictionless trade between the UK and EU is to be maintained.
In order to maintain an open intra-Ireland border additional provisions are made within the WA that will apply to NI only and not to the rest of the UK.
These include NI’s full adherence to the EU Customs Code and its continuing regulatory alignment with SM rules with respect to the technical standards of goods, to sanitary and phytosanitary measures relating to animal, plant and food safety, to environmental protection, to agricultural production and marketing, and to rules relating to VAT and excise in respect of goods, and to state aid.
The European Court of Justice (EJC) will continue to exercise direct jurisdiction over the application and interpretation of these rules.
NI, in effect, would be treated differently to the rest of the UK under the WA backstop, making it impossible for the DUP to support the agreement.
It will become operative at the end of the transition period on 31 December 2020, until when the UK will continue to apply full CU and SM rules, unless alternative other arrangements that are consistent with an open intra-Ireland border are put in place.
Otherwise the transition period is extendable by mutual agreement for up to a further two years until December 2022, subject to the government requesting an extension by 1st July 2020 and then its subsequent approval by the Joint Committee that will be set up to oversee the WA.
The government’s expressed intention is that the WA backstop would be rendered unnecessary by the UK entering into a subsequent agreement with the EU that would establish a future ‘deep and special future economic partnership’ between them.
To that end, the WA shoulders a joint ‘best endeavours’ duty on both parties to finalise such an agreement.
More specifically, Article Two of the Ireland and N.Ireland Protocol within includes provision for specific ‘best endeavours to reach a future agreement which supersedes the WA backstop by December 2020’ to be made.
When activated the WA backstop arrangements would then, according to Article One of the same Protocol, continue indefinitely “unless and until they are superseded, in whole or in part, by a subsequent agreement”.
The current draft of the WA does not include any time-limit on, or for any right for the UK to unilaterally exit the backstop after it comes into operation; nor does it define in which precise circumstances when it would no longer apply.
The UK commits to continue to adhere to EU State Aid and Competition Policy, and not to dilute existing EU social, labour, and environmental standards – the so-called non-regression clause, with provision is also made for both parties to jointly agree to raise them.
No provision is made in the WA for services at either the NI or the UK level. Nor is provision made for the UK to benefit from existing and new trade agreements with third-party countries.
Turning to the accompanying non-binding PD, no mention of frictionless trade is made, even though the original version published on the 14th November did, indicating the fluidity of the document and the PM’s tacking to her party’s hard-Brexiteer faction in response to their initial hostile reaction.
It, however, does air the possibility of using technological fixes and ‘trusted traders’. This suggests that government may hope to resurrect the Facilitated Customs Arrangement (FCA) included in the 2017 Brexit White paper to build and improve on the barebones customs union set out in the WA.
That FCA was considered and ruled-out as unworkable by the EU during the WA negotiations. For reasons explained in https://www.asocialdemocraticfuture.org/2018-brexit-white-paper/and little has changed since then, other than the political environment within the Conservative party.
The PD gives emphasis to the development of an independent trade policy with reference made to a future (trade?) agreement ‘that will obviate the need for checks on rules of origin’.
Such an outcome, however, assumes either the maintenance of the EU’s Common External Tariff (CET), or undue reliance on a future technological fix that would allow the UK to levy differential tariffs without border formalities.
The government conceded in Section 181 of its November Explainer on the Draft Withdrawal Agreement that, indeed, ‘The (WA) text reflects the UK’s commitment to align with the EU’s Common External Tariff, and with the Common Commercial Policy on trade in goods with third countries to the extent necessary give effect to these (WA backstop) provisions’. But to do that would probably prevent the UK negotiating, and certainly bringing into effect, its own trade deals with the Rest-of-the-World (ROW), save for services.
The government has been, therefore, caught facing in different incompatible directions, when explaining the WA. It will continue to do so, thus undermining its own position, until that it is made consistent and fit for purpose.
Such basic confusion, reflecting the conflicting internal party pressures within the Conservative Party, hardly augurs well for any expeditious trade negotiation process that can culminate in a 2020 trade deal. That, of course, in any case, assumes that the May deal is approved by the House of Commons next year, which it won’t, at least in its current form.