Next Exit: Third Country

Brexit is on its way, but the exciting part comes later

 

 

The word Brexit has almost become a synonym. For the last almost three years it seemingly stood for all sorts of things: for tough and fruitless negotiations; for the waste of precious work time of politicians, officials and journalists; for parliamentary drama and political navel-gazing; and for ever new extensions with uncertain outcomes. Now, however, the word will return to describe what it originally meant: the United Kingdom is leaving the European Union. After more than 47 years, its membership in the institutions of the European Community ended.

Prime Minister Boris Johnson and his Conservative Party quickly cleared the last hurdles for Brexit after their brilliant election victory. In the middle of this week, a majority of Members of the European Parliament also voted in favour of the withdrawal agreement that London and Brussels had jointly negotiated last autumn. Guy Verhofstadt, the Brexit Envoy of the European Parliament, however, underlined that the clear vote of the MEPs was not a vote for Brexit, but one for an orderly withdrawal in the interest of both sides.

On both sides of the canal, the symbolic date of withdrawal gives rise to different celebrations. Ironically, on Friday night, both the buildings on the Grand Place in Brussels and the facades of Parliament Square in London will be illuminated in the Union Jack colours. An identical light installation with which the organizers in Brussels and London want to send opposing political messages.

Among the co-organisers in London are the long-time MEP and EU opponent Nigel Farage and other well-known Brexit supporters. Critics from both camps are already accusing them that it is no longer a question of celebrating Brexit, but of reuniting society after years of political division. In Brussels, MEPs have already bid an impressive farewell to 73 British colleagues who will no longer have a place in the European Parliament. The liberal Guy Verhofstadt expressed his regret on behalf of the majority of his colleagues: “It is not a farewell, but a goodbye”.

The question is: What will change from 1st February, apart from symbolic ceremonies and the departure of the British contingent from the European Parliament? The answer is: almost nothing. Because Brexit will first be followed by a transitional period during which the United Kingdom has committed itself to continue to apply all the rules and standards of the European Union. So for travellers, businesses or citizens who live on the other side of the Channel, nothing will change for the time being.

So the Brexit moment tonight is like the slow lane of a motorway exit. The United Kingdom vehicle leaves the convoy of European vehicles, but initially continues parallel, separated from the rest of European traffic only by a dotted line. What matters is what happens next. Will the United Kingdom continue to drive alongside, make a sharp turn or disappear into a tunnel? These are precisely the three possible scenarios.

In the first scenario, London agrees to continue to apply European rules and standards in return for access to the European Union’s internal market. President Macron of France has already pointed out that it is not enough to simply continue to apply the existing standards. On the contrary, London must also adopt future European Union regulations in order not to violate the integrity of the internal market. This scenario would be the most economically advantageous for both sides, but it is unlikely to satisfy the desire of the British government around Boris Johnson for more control and sovereignty.

In the second scenario, the United Kingdom turns sharply and creates legal regulations that differ significantly from those in the EU, possibly also in an attempt to conclude trade agreements with other third countries such as the USA. In this scenario, there would be numerous barriers to trade between the United Kingdom, although these could be contractually regulated.

The third scenario, the tunnel, has already become known from the past as no deal or crash Brexit. If no agreement can be reached by the end of the transitional period, the United Kingdom could suddenly revert to the status of a third country on 1st January 2021. Cooperation and trade between the two sides could then be seriously affected on a temporary basis. The EU chief negotiator Michel Barnier has already warned strongly against this scenario: “A new clock is ticking”.

It is certain that the deceleration lane is a short one. While the exit date has been postponed further and further, the deadline for the end of the transition period has remained the same: 31 December 2020. Prime Minister Boris Johnson has repeatedly stated that he is strictly against extending this deadline. Brussels and London therefore only have 11 months to negotiate their future relations. This will mainly concern the numerous fields of mutual economic relations and cooperation in the field of security policy. EU Trade Commissioner Phil Hogan has already declared the successful negotiation of a new agreement within this period to be impossible. Observers in Brussels also consider a first crisis in the negotiations in the summer to be likely.

London is therefore proposing to conclude small agreements in individual, important areas. Brussels, however, rejects such a “salami tactic” and would prefer to form a “ravioli”, i.e. a negotiating package covering all important areas. The EU negotiators’ main concern is to ensure that the UK really does honour its commitments.

Are goods traded between Northern Ireland and Britain really controlled? Only then can the border on the island of Ireland remain open and the provisions of the Good Friday Agreement be respected. Are the rights of residence of European citizens in the UK really guaranteed? And will London really honour its financial commitments under the current EU budget? Only then will it be possible to talk about British access to the internal market.

Negotiations between London and Brussels will be intense from February onwards. The British Liberal Democrats will have little influence on this. They need to regroup and reinvent themselves at the moment. At the party conference in York in March, the party chairmanship will have to be reappointed. In addition, the party will have to decide whether they want to support re-entry into the European Union (“rejoin”) in the future or make the best of Brexit.

 

 

Sebastian Vagt

Head of the FNF Security Hub in Brussels.