Armstrong, Kenneth A.

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Safety Net, Trap or Trampoline – Willthe Backstop Lead to a No Deal Brexit?Kenneth Armstrong 2018-11-15T17:12:34Following yesterday’s announcement that the UK and the EU have agreed a revisedtext of the draft Withdrawal Agreement, the political fallout in the UK has begun withthe UK Brexit Secretary Dominic Raab’s resignation from the Government. In hisresignation letter, it is the so-called ‘backstop’ arrangements to avoid a hard borderon the island of Ireland that appears to be the primary cause of discontent.The backstop is intended to be a safety net not to be deployed insofar as the UK andthe EU reach an agreement on a future relationship and provided that agreementmeets the commitment to avoid a hard border on the island of Ireland. The Preambleto the draft Withdrawal Agreement makes clear the ambition on both sides is, ‘to theextent possible’, for new agreements to apply before the end of the transition period.In other words, the backstop is redundant if during the transition period negotiatorstranslate the aspirations set out in the outline joint Political Declaration into concretelegal text which can be agreed and ratified and come into effect. This is put into moreconcrete legal form in the Protocol on Ireland and Ireland that contains the backstop.Article 184 of the draft Withdrawal Agreement and Article 2 of the Protocol containsa ‘best endeavours’ obligation to put in place a future agreement by the end of thetransition period, in which case, the Protocol shall not apply or shall cease to applyonce new arrangements have been agreed.There are two sets of difficulties that relate: to the capacity to reach an agreementon the future relationship before the end of the transition period, and what happens ifthe backstop is deployed.Avoiding Deploying the Safety NetThe first risk is simply that negotiations may take longer than anticipated and exceedthe length of the transition period. Article 126 states that the transition period endson 31 December 2020. The only way of avoiding the backstop being triggeredwould be for the transition period to be extended. Article 132 of the Agreement nowprovides a mechanism for extending transition if the Joint Committee establishedunder the Agreement makes a decision before the end of July 2020 to extend thetransition period. However, the text does not specify a potential end date for thisextension, simply stating instead ‘up to [31 December 20XX]’. This implies that itwould be an extension of at least a year or some other period of time terminating atthe end of a calendar year. During this period the UK would not be in the EU budgetbut it would make financial contributions.Article 3 of the Protocol reiterates that before the end of July 2021, the UK mayrequest an extension of the transition period and the Article 132 mechanism will be- 1 -triggered to avoid the need for the backstop to be deployed. While this extension oftransition does create more time for negotiations, it does not completely de-risk thepotential for the transition period to end without a new future relationship in place.The second risk is that negotiations fail to reach an agreement on the futurerelationship. Although there appears to be optimism in Brussels that the negotiationscould be much more rapid that those on other trade agreements which the EU hasnegotiated, it is important to recognise that the outline joint Political Declarationanticipates that this will be a more ambitious agreement than other EU tradeagreements. That could make it harder to reach an agreement. But perhaps moresignificantly, as is clear from the internal political debates in the UK, it is simply notclear that the UK side can present a settled view to the EU on what it wants. It is notinconceivable that there could be a change of government in the UK and that a newgovernment might have a very different view of that future relationship. That lack ofclarity and consensus on the UK side is a substantial risk to a new agreement beingin place before the end of the transition period.The third risk is that even if negotiators agree a text, that text will need to beapproved both by the European Parliament and within the domestic constitutionalorders of the EU27 and the UK. Ratification problems in national systems have inthe past at least delayed the entry into force of EU agreements raising the risk of thebackstop having to be deployed.The only way of avoiding the backstop being triggered would be for the UK to remainin a transition period in which Union law remains applicable to the entirety of theUK unless and until new arrangements are in place that ensure no hard border onthe island of Ireland. Indeed, a more open transition would be one way of avoidinga backstop at all, but it would need some means and mechanism for the JointCommittee to end the transition period in the same way as it could extend the periodin the way that is envisaged by Article 132.Safety Net, Trap or Trampoline?All that being said, it is becoming clear that there are concerns about the backstopitself. Although the draft Agreement contains a backstop that is different from thatoriginally proposed by the EU – keeping Northern Ireland in a ‘common regulatoryarea’ – the new proposal for a ‘single customs territory’ is also controversial. Thereare 3 key issues.The first is whether the backstop is really a temporary safety net or a morepermanent trap. Article 1(4) of the Protocol on Ireland and Northern Ireland makeclear that the backstop is not to be a permanent arrangement – it couldn’t be legallywith Article 50 TEU as a legal basis – and if deployed is only temporary until it issuperseded by a future agreement between the UK and the EU. Nonetheless, ifit is deployed it is because there is no alternative arrangement in place and theissue becomes whether it could end other than through supersession by a newagreement. Article 20 of the Protocol creates a review mechanism by which the JointCommittee which oversees the application and implementation of the Agreement- 2 -may decide that the Protocol – in whole or in part – is no longer necessary. Eitherside can trigger the process, with the Joint Committee making a decision within sixmonths of notification. Any such decision is taken jointly between the UK and theEU meaning that the UK has no unilateral power to exit the arrangement. As somehave observed, this is different from the Article 50 TEU right to unilaterally withdrawfrom the EU. There is clearly a risk that deadlock could mean that what is meant tobe temporary becoming instead an enduring legal framework. While this would becontrary to the use of Article 50 TEU as a legal basis, there is no mechanism forresolving conflict. An additional stage may need to be built in which would deal withdeadlock. Borrowing from Article 50 TEU itself, this could say that if no joint decisioncan be reached, the United Kingdom may notify its intention to withdraw from theProtocol with the Protocol ceasing to have effect one year following notification orif the Protocol is superseded by a new agreement. Although this would remove thesafety net it would produce the same effect as if the UK left the EU on 29 March2019 without a deal. It would create a penalty default that ought to encouragenegotiators to make their final and best endeavours to reach an agreement on afuture relationship.The second problem is substantive and relates to the degree to which the UK asa whole and Northern Ireland specifically will be bound by customs and regulatoryobligations. The single customs territory is UK-wide but to avoid the need forregulatory checks at the Irish border, a series of annexes details the particularEU single market rules that will also apply to trade on the island or Ireland. Ascontroversially, the UK as a whole will also be bound by certain level playingfield obligations to prevent distortions to competition in respect of state aid andcompetition policy as well as obligations on non-regression on environmentalstandards. When combined with the absence of a mechanism for the backstop toend, the extensive nature of these obligations has heightened political anxietiesabout agreeing to this backstop at all rather than merely relying on a transition periodwith a fixed (albeit extendable) endpoint.The third difficulty is the sense that the backstop isn’t just a safety net but atrampoline propelling negotiators towards a specific agreement on the futurerelationship. Conceptually, it was always going to be odd to imagine how the contentof a backstop would actually differ from that of a future economic arrangementthat would seek to achieve the same aims. Indeed, the difficulty of negotiatingthis backstop highlights that there are probably not that many means of achievingthe same objectives. With there being real controversy over what sort of futurerelationship the UK should seek to have with the EU, politicians have reacted badlyto the idea that the backstop could actually bounce the UK into a particular type offuture relationship before those negotiations got underway. The source of the tensionis the Preamble to the Protocol on Ireland and Northern Ireland which states that theUK and the EU have the ‘common objective of a close future relationship, which willestablish ambitious customs arrangements that build on the single customs territoryprovided for in this Protocol’. This has underscored the fears of Brexiteers thatthe backstop isn’t a temporary safety net but instead risks becoming an additionaltransitional framework leading towards a close economic relationship that Brexit- 3 -supporters do not believe live it up to the commitment for the UK to leave theCustoms Union and the Single Market.A Looming No-Deal BrexitFollowing her Cabinet’s approval of the text of the draft Withdrawal Agreement, ina statement to the House of Commons, the Prime Minister emphasized that thiswas not the final text. With discontents being voiced on all sides of the House, itseems impossible for the current text to be approved by Parliament as is requiredunder Section 13 of the European Union (Withdrawal) Act 2018. Yet it also seemsimpossible for the EU to drop the backstop. Making the transition period more open,or creating a revised exit mechanism for the backstop together with finessing therelationship between the content of the backstop and that of the future economicrelationship – emphasizing instead the outline joint Political Declaration on theframework of future cooperation – might go some way to meeting concerns.However, the most likely scenario remains that the UK Parliament will fail to approvea Withdrawal Agreement heightening the risk of a No Deal Brexit.- 4 -

Safety Net, Trap or Trampoline: Will the Backstop Lead to a No Deal Brexit?

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Safety Net, Trap or Trampoline: Will the Backstop Lead to a No Deal Brexit?

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