Saturday 12 June 2021

Bordering on the bizarre

Editorial policy at the Financial Times has taken a strange tack of late. A sensible, sober newspaper has published two opinion pieces in recent weeks illustrating the lack of knowledge displayed by policymakers on matters of real economic importance. Last week’s piece by former German finance minister Wolfgang Schรคuble on euro zone fiscal issues was followed by UK Brexit minister David Frost’s call for a rethink of the Northern Ireland protocol (NIP). The latter is part of a government media blitz to convey the message that the NIP has not panned out as expected. It is difficult to buy that view given the warnings which were issued ahead of Brexit.

All this was very predictable

To remind people of what was said at the time the agreement was signed, the deputy leader of the Democratic Unionist Party warned in October 2019 that, “You are really in danger here of causing real problems with the Belfast agreement … and political stability in Northern Ireland.” The charity Fullfact.org reported in December 2019 that Boris Johnson’s claim that there will be “no checks on goods going from GB to NI” was false. They also reported that “it’s not correct, as Mr Johnson said, that if there are any terms of the Withdrawal Agreement that people in Northern Ireland don’t like that they would lapse automatically after four years.” Everything that has happened in recent weeks was thus entirely foreseeable. 

I noted in April that “the contradictions inherent in the Brexit deal regarding Northern Ireland are becoming more evident by the week.Of all the problems inherent in Brexit, the Northern Irish border issue can be laid directly at the door of Boris Johnson’s government. British MPs simply would not sign up to the “backstop” arrangement negotiated by Theresa May’s government. Johnson’s alternative, which was acceptable to parliament because it prevented the UK from being trapped in the EU’s embrace, imposed a border where previously there was none. Indeed the one thing which the British government has always refused to acknowledge is that there must by definition be a border between UK and EU customs territories. In this case it runs down the middle of the Irish Sea. Anyone who thought otherwise is being disingenuous.

The government adopted a "sign now, deal with it later" approach

According to Frost, “when we agreed this new protocol in 2019, we did so in order to remove the old disastrous “backstop” and to enable Brexit to happen, but to do so in a way that maintained our overriding priority of protecting the Belfast (Good Friday) Agreement and avoiding a hard border.” As to whether it was “disastrous” the Irish government did not think so, nor did Northern Irish nationalist politicians who won more seats than unionist politicians at the 2019 general election. Unfortunately, nobody thought to directly ask the Northern Irish people (who, by the way, voted 56-44 in favour of remaining in the EU in 2016). The protocol was passed through parliament primarily by English Conservative MPs because this was the least objectionable option “to enable Brexit to happen.” 

Frost goes on to say “we underestimated the effect of the protocol on goods movements to Northern Ireland.” Again, I am not sure who is the “we” referred to but the government was warned for years, both before and after the referendum, that imposing frictions to cross-border EU trade would come at a cost. Frost concluded his missive by suggesting that “we agreed … to control certain goods movements within our own country and customs territory. If that situation is not to be totally unsustainable we need to be able to do so in ways which do not disrupt everyday life and which respect everyone’s identity and interests. We continue to work for negotiated solutions which achieve this.” Most rational people believe that the protocol represents just such a negotiated solution and it increasingly looks like the UK government signed on the dotted line simply to get Brexit “done” with the intention of trying to renegotiate the details later.

And now it is paying the price

The international community has little sympathy for the UK’s position. Unsurprisingly, Emmanuel Macron is not to be moved. As he told journalists earlier this week, “We have a protocol. If after six months you say we cannot respect what was negotiated, then that says nothing can be respected. I believe in the weight of a treaty, I believe in taking a serious approach. Nothing is negotiable. Everything is applicable.” More seriously news reports have emerged to suggest that the US government privately rebuked the British for endangering the peace process over the NIP, although both sides have been careful to keep this out of the public domain.

Many of the more deluded on the Brexit spectrum cannot bring themselves to admit that there are big costs associated with their signature policy and continue with the narrative that the NIP was somehow “imposed on the UK by Brussels at the moment of our greatest weakness” (I will leave it to you to decide whether it is fortunate or unfortunate that it is behind a paywall. Ironically the same author extolled the virtues of the NIP less than two years ago). It beggars belief that the British government finds itself in such a position. Johnson promised “an oven ready deal” just 18 months ago which was meant to lead us to the sunny uplands. Instead we find that the deal does not do what it said on Johnson’s tin. To add insult to injury, Frost is not an elected politician – he is an unelected (recently ennobled) member of the House of Lords. The British government has thus appointed an unelected trade novice to oversee trade policy. Brexit is not yet at the stage of devouring its own children but the pot may be about to be readied.

A wider problem is that if the government has treated major issues such as trade policy in such a cavalier fashion, can it be trusted on other issues? As the OECD put it, “trust is the foundation upon which the legitimacy of public institutions is built and is crucial for maintaining social cohesion.” So far there has not been any significant loss of domestic trust with Johnson’s act continuing to play well at home but the UK’s reputation in international dealings is not exactly being burnished by recent events.

The EU is not blameless either but the UK government must shoulder the blame

This is not to say that the EU is entirely blameless. Its actions regarding the NIP reflect a tendency to hide political problems behind technical issues, arguing that the purity of the single market must be protected at all costs. This intransigence is what caused the Swiss to recently walk away from seven years of negotiations to achieve a framework deal with the EU to replace the patchwork of deals currently in place. Of course, one of the great ironies of the current situation is that Brexiteers always argued that the EU was an excessively bureaucratic institution that the UK was well advised to leave whereas the truth was that as a member, the UK was shielded from the worst of it.

We can debate the extent to which the EU needs to change its policy towards its neighbours – and this argument is not without merit. However, the recent spat demonstrates that the UK government’s casual approach to legal details over the past five years does have consequences. I have made it clear for many years that there is no such thing as British exceptionalism, which appears to be the leitmotif of many hardline Brexiteers. As it is, the Northern Irish problem, serious as it is, affects a relatively small proportion of the UK population. Over time, a larger proportion of the population may begin to become aware of the damage that Brexit has inflicted upon them. Only then might we start to have the debate we should have been having five years ago about the price of the policy.

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