Thursday, 7 February 2019

#Brexit it is a game of chicken - it was always going to be - do we have the nerve?

The Brexit negotiation with the EU is complicated - but actually - it is also easy.

Leaving the EU was always a transaction - and it was always naïve to think of it as anything other than that.

Post Brexit the EU and the UK will be mutual customers. We WANT to buy from and sell to them - they WANT to buy from and sell to us. Both sides understand that.

Like any transaction the EU want to negotiate the most favourable terms and conditions possible in their favour - and the UK likewise (although you might not think so) want to achieve the same.

But a big problem! The Irish Backstop - which is written into the legally binding withdrawal agreement. The trouble with the Irish Backstop as it stands is it places the UK totally over the EU barrel - when it comes to negotiating the crucial future trade terms. I assume you understand why - but I will quickly precis :
  • While we might leave with a deal on 29th March 2019 all that has been agreed is the withdrawal terms - the actual trade deal referred to above has only been outlined and is still to be negotiated and agreed. This negotiation is supposed to take place in the next two years - (the transition period.).
  • In the transition period we remain effectively in the EU.
  • The Irish Backstop (to prevent a hard border necessary in Ireland) requires the UK to remain in the transition period indefinitely unless a trade deal is done (that makes a hard border in Ireland unnecessary). The UK cannot leave the back stop arrangement unilaterally - we are locked in until a trade deal is done.
  • As the EU does not want us to leave it is OBVIOUS they will be happy to keep the UK locked in the backstop unless they can screw highly advantageous trade terms out of the UK. We are over a barrel! As an example of the problems we would face - Macron in France has already said - no trade deal with the EU unless French fishermen can fish in UK waters and the Spanish leader has said no trade deal with the EU unless the UK grants Spain joint sovereignty over Gibraltar!
Quite rightly the majority of our MP's are not prepared to agree a legally binding withdrawal agreement which contains the Irish Backstop in its present form. Of course they are right - it would be total madness to do so - shockingly irresponsible.

So we are now at an impasse. Our Parliament will not approve the withdrawal agreement without the removal of the back stop in its current form. The EU says they are not going to change the withdrawal agreement.

What happens?

If both parties cannot agree by the 29th March 2019 the UK leaves the EU without a deal (and transition period -  and the Irish border issue is unresolved).

This is generally regarded for a bad outcome for everyone - for the UK, EU and particularly Ireland. Words like disaster are being used. Economic suicide is another. "No deal" is characterised by some as going over the cliff edge.

There is less than 60 days to work out a deal and in practical terms there is probably much less than that.

So who will give way as the pressure mounts?

Well there are many in the UK and I am one of them who believes "No Deal" is our best option. "No deal" represents the Brexit we voted for - a clean break. We trade on WTO terms. Yes it will be problematic. Yes it will cause disruption. It will hurt us in the short term - but life will go on and we will recover. If the Irish want to put up a border that is up to them. The UK will not do it (and neither will the Irish in reality).

Overall I am convinced the majority of UK citizens are determined to uphold the referendum result, believe in the 4 red lines (take back control of our laws, money, borders and be able to trade on our own terms with the rest of the world) and that no deal is better than a bad deal.

So if we have the good sense to keep no deal on the table (and it is the legal default position if there isn't a deal agreed) and we are prepared to see it through as a viable option - eventually the EU will make a concession on the backstop that will be acceptable to the UK. (because the EU and Ireland have so much to lose with No Deal). If they don't - we will make No Deal work - there are huge advantages that accrue. (I believe after a few tricky years our future will be so much brighter and we will be free again - and that far outweighs a few bumps in the road).

If on the other hand the EU believe there is a chance the UK parliament will take no deal off the table or will not see it through (as too damaging to UK interests) - they will hold firm with their position as the clock clicks down. (The EU can see our Parliament is far from united - some still agitating to stay in the EU in all but name - BRINO - some want a 2nd referendum).

So it is a game of chicken. Some argue it is irresponsible to play out our futures in such a cavalier way - they want something more reasonable. But they are naïve. Life is not actually like that. The only way to negotiate is to fully exploit your hand. The EU have done it well so far. They are hanging tough. Too many of our people want to throw in our hand. They believe the EU when the EU says the withdrawal agreement cannot be changed. Why wouldn't the EU say that with conviction? Of course it can be changed.

As almost always in EU negotiations it will come down to the wire. It will take until the ticking clock approaches midnight for minds to focus and a deal be done. It will be right at the end of this game of chicken that we make progress.

Will we get to that? Parliamentary arithmetic is not helpful. Westminster parties are playing political games to undermine our government. Some will try and stop no deal through our Parliament (and shoot the UK in the foot). If they do we are doomed. They will either have shattered our democracy or given licence to the EU to hold us as a vassal state with the power to shit all over us.

We must be strong. No deal is better than a bad deal. No deal is the Brexit we voted for.