After Johnson-Varadkar meeting, Brexit negotiations resume, aim for deal by Thursday

For more than a week after the UK gave the EU a 44-page draft legal text of a new Protocol on Ireland/Northern Ireland, it appeared highly unlikely they would be able to agree on a modified withdrawal agreement prior to this Thursday’s meeting of the European Council. As Michel Barnier, the EU’s chief Brexit negotiator, told the European Parliament last week, “We’re not really in a position where we’re able to find an agreement…. The proposal of the British government as things stand isn’t something we can accept.”

But on Thursday, after British Prime Minister Boris Johnson and Irish Taoiseach Leo Varadkar met for more than three hours at Thornton Manor, a former country house now a hotel in Wirral in northwest England, the deepening pessimism about the prospects for a last-minute agreement was abruptly replaced by optimism that, although time is running out, the EU and UK might, against all odds, reach an agreement in time for Thursday’s meeting. In their joint statement, the two leaders said they had a “detailed and constructive discussion. Both continue to believe that a deal is in everybody’s interest. They agreed that they could see a pathway to a possible deal…and agreed to reflect further on their discussions and that officials would continue to engage intensively on them.”

On Friday morning, after a two-hour meeting over breakfast with Stephen Barclay, the British Secretary of State for Exiting the EU, at which Barclay informed him about the results of the Johnson-Varadkar meeting, Barnier met with the ambassadors of the EU27 and obtained their agreement that the EU and UK should begin “tunnel” negotiations, meaning intensive confidential negotiations without periodic media briefings and updates. The UK had already sent a dozen members of its negotiating team to Brussels overnight, so those negotiations began immediately thereafter, continued through the weekend and yesterday and are continuing today. The aim is to reach an agreement that can be approved by the European Council on Thursday, after which it could be approved by the European Parliament and by the UK Parliament, the latter at the rare sitting of the House of Commons scheduled for Saturday.

The sticking point in the existing Protocol, which, with its nearly 150 pages of annexes, is 173 pages in length and is contained within the 599-page Withdrawal Agreement the EU and UK negotiated in 2018, is, of course, the Irish backstop — the provisions, in particular Article 6, which are meant to ensure that the border between Ireland and Northern Ireland remains, as it is today, open in all future circumstances unless and until the EU and UK negotiate, after Brexit, an agreement in regard to their future economic relationship that achieves that purpose. Article 6(1) states that “until the future relationship becomes applicable, a single customs territory between the Union and the United Kingdom shall be established.” Article 6(2) states that Northern Ireland will continue to remain in the EU’s Single Market for goods and the EU’s customs regime and will be required to comply with all of the relevant rules and regulations of both.

When Johnson became Prime Minister on July 24, he made it clear that he hoped to leave the EU on Oct. 31 with “a new deal, a better deal,” meaning a deal without the Irish backstop. On Oct. 2, the UK delivered its proposed text of a modified Protocol to the EU. In a four-page letter to European Commission President Jean-Claude Juncker, accompanied by a seven-page explanatory note, Johnson set out what he regarded as a “reasonable compromise: the broad landing zone in which I believe a deal can begin to take shape.” Calling the current backstop “a bridge to nowhere,” he said the new Protocol was centered on the UK’s commitment to find solutions compatible with the Belfast (Good Friday) Agreement and confirmed its commitment to long-standing areas of collaboration with Ireland such as the Common Travel Area and North/South cooperation.

The UK didn’t release the 44-page text of the proposed Protocol but Johnson’s letter and the accompanying explanatory note describe its essential features. It provides for the potential creation of an all-island regulatory zone covering sanitary and phytosanitary (SPS) measures, agri-food products, and manufactured goods that would eliminate all regulatory checks for trade in goods between Ireland and Northern Ireland by ensuring that goods regulations in Northern Ireland are the same as those in the EU. Northern Ireland would, in effect, remain in the EU’s Single Market and would continue to be subject to its rules and regulations. The EU has rightly acknowledged that as an important concession.

However, the draft text also proposes two changes to which the EU and Ireland strenuously objected. One involves a procedure through which Northern Ireland might register its consent, or lack thereof, to the regulatory arrangements. The other involves customs. In regard to the former, the UK proposes that the Northern Ireland Executive and Assembly should have the opportunity to endorse those regulatory arrangements before they enter into force – that is, during the transition period — and every four years thereafter. The proposal also stipulates that if consent is not secured, the arrangements would lapse. In regard to customs, the UK proposes that Northern Ireland be fully part of the UK customs territory, not the EU Customs Union, after the end of the transition period (Dec. 31, 2020 or, if extended, 2021 or 2022). And it proposes that all customs processes needed to ensure compliance with the UK and EU customs regimes should take place on a “decentralised basis, with paperwork conducted electronically as goods move between the two countries, and with the very small number of physical checks needed conducted at traders’ premises or other points on the supply chain. To enable this, we should both put in place specific, workable improvements and simplifications to existing customs rules between now and the end of the transition period…. These arrangements can be underpinned by close cooperation between UK and Irish authorities. All this must be coupled with a firm commitment (by both parties) never to conduct checks at the border in future.”

Both issues are complicated, but there are ways to deal with them. What makes the possibility of a Northern Ireland veto on the initial regulatory arrangements and their renewal every four years after they enter into force unacceptable for the EU is, of course, the fact that it would give the Northern Ireland Executive and the Stormont the power to veto, years after the fact, provisions agreed by the EU and the British government in the withdrawal agreement. That is all the more objectionable because of a procedural rule in the Stormont, the petition of concern, that would allow a single party — for example, the Democratic Unionist Party (DUP) — to block approval of the introduction and/or renewal of the regulatory arrangements. The UK has agreed to drop the idea of an initial veto but it has not, as yet, agreed to drop its proposal that the Executive and Stormont also have a veto on renewal of the regulatory arrangements. Clearly, if there is to be an overall agreement, the UK will have to accept some alternative mechanism through which the Executive and Stormont could, without having the power to veto a continuation of the arrangements, register their views in regard to their operation and have confidence that any concerns they raised would be considered and addressed by the EU and the British government.

The more complicated issue is that of customs — in particular, how to avoid a customs border between Ireland and Northern Ireland if the latter is not in the EU Customs Union. The UK has made it clear it understands there can’t be a customs border but it has also made it clear that, for obvious political reasons, Northern Ireland must remain fully part of the UK customs territory and there can’t be a customs border in the Irish Sea between Northern Ireland and Great Britain. The EU objects to the UK’s proposal that a hard border can be avoided by conducting the customs processes on a “decentralized” basis using electronic tracking and some physical checks at traders’ premises or other points in the supply chain on the grounds that it relies on technologies that haven’t been tested and proven effective, employs processes that would, with physical checks, create a hard border, and would expose the EU’s internal market to the risk, even likelihood, that goods would enter illegally. One way to avoid a customs border without including Northern Ireland or all of the UK in the EU Customs Union would be to agree that, while Northern Ireland is fully part of the UK customs territory, it also constitutes a special customs zone in which the EU and UK cooperatively conduct customs procedures, applying UK rules and tariffs for goods that enter Northern Ireland for consumption in Northern Ireland and EU rules and tariffs for goods that enter Northern Ireland for consumption in Ireland. One way to do that, the UK proposed, was to have a channel system at Northern Ireland’s two ports and airport — a green channel for goods arriving for sale in Northern Ireland that would be subject to UK rules and tariffs, a red channel for goods arriving for sale in Ireland or elsewhere in the EU that would be subject to checks and controls. The goods would subsequently be tracked and spot checks would be carried out to make sure goods declared for one channel didn’t end up being sold in other locations. Not surprisingly, the EU rejected the plan as relying on technologies that are not yet developed, likely to result in smuggling, evasion and/or fraud, and ignoring the economic reality of highly complex supply chains in the production of goods that often extend across multiple national borders. Obviously, these problems could be mitigated if Northern Ireland were in the EU customs regime. But that, of course, could only happen if the UK and the EU are in a single customs territory – which is exactly what Article 6(1) of the existing Protocol would establish until the future economic relationship becomes applicable!

Both issues are obviously complicated and their resolution, and the translation of that resolution into the legal text required for the withdrawal agreement — it is, after all, an international treaty — in time for Thursday’s meeting of the European Council, is by no means assured, despite the many hours of negotiation over the weekend, yesterday and continuing today. On Sunday evening, Barnier told the ambassadors of the EU 27 the UK’s plans to avoid a hard border while keeping Northern Ireland in the UK’s customs territory are exceptionally complicated and not yet fully worked out, and there’s “still a lot of work to do.” Yesterday, after meeting with Charles Michel, the incoming president of the European Council, Finnish Prime Minister Antti Rinne — Finland now holds the six-month rotating council presidency — said, “I think there is no time in a practical or legal way to find an agreement before the EU council meeting. We need more time.”

In a phone call with Johnson this morning, French President Emmanuel Macron, while acknowledging the progress made thus far, made it clear there has to be “complete clarity” by tonight on whether an agreement is possible: “We want to be able to evaluate the situation tonight.” He also raised the possibility of a “technical” extension beyond Oct. 31 in order to complete the talks. Speaking this morning in Luxembourg before meeting with the EU ministers, Barnier said although “agreement will be difficult, more and more difficult to be frank, it is still possible this week — reaching an agreement is still possible.” He concluded with a clear message to the UK: “Let me add that it is also high time to turn good intentions into a legal text.” At the meeting, he told the EU ministers that the UK had not yet tabled a revised legal text of the Protocol and that the deadline for reaching an agreement in the negotiations in time for Thursday’s European Council meeting is midnight tonight. He told the ministers that, while the UK has dropped its proposal to give the Northern Ireland Executive and Stormont a veto over the regulatory arrangements, it continues to seek some way to give Stormont the power to limit their duration. And, he said, the customs issue remains a problem; while the UK understands there can’t be a customs border between Northern Ireland and Ireland, it is still trying to avoid having one in the Irish Sea. The EU, he said, has rejected the UK’s proposal of a dual system at Northern Ireland’s ports and airport that would involve tracking goods entering from Great Britain and applying whatever tariffs would be appropriate depending on where the goods are going. He made it clear that without a major breakthrough today, it’s unlikely there will be an agreement for the heads of state and government to approve on Thursday.

Barnier will inform the EU 27 on Wednesday whether the UK and EU have reached an agreement the heads of state or government can approve at their meeting Thursday. Will the burst of optimism after last Thursday’s meeting between Johnson and Varadkar that the UK and EU might actually reach an agreement that would enable the UK to leave with a deal on Oct. 31 turn out to have been warranted or illusory? We’ll soon know the answer.

David R. Cameron is a professor of political science and director of the MacMillan Center’s Program in European Union Studies.