Brexit made important progress last week as the United Kingdom and the European Union agreed on several key issues, a deal that allows negotiators to turn their attention to the critical question of the final trade relationship between the two. The “deal” is not legally binding, however, and could yet unravel. Still, it is a breakthrough for Brexit and a milestone in this historic process.
It took six months for the two sides to reach agreement on three preliminary, but nevertheless critical, issues: the rights of EU citizens in the U.K., the financial settlement that London would pay upon departure, and the status of the border between Northern Ireland and the Republic of Ireland. The European Commission called the 15-page document a “gentlemen’s agreement,” a status that leaves the door open to some flexibility in its terms. Both sides insist, however, that any changes could be fatal to an eventual deal.
One million British citizens live in the EU and approximately 3.5 million EU citizens lived in the U.K. at the time of Brexit. Both sides want their citizens to continue to enjoy the full range of rights that they currently enjoy under EU law. That is easier said than done, as the European Court of Justice (ECJ) is the guarantor of those rights and one of the avowed aims of Brexit was ending the influence of EU institutions in Britain. The two sides agreed on a compromise whereby British courts will take ECJ case law into account when it adjudicates cases and they will retain for eight years the option to ask the ECJ for interpretation of relevant law — but if a court asks for help, it must follow the ECJ ruling. This theory will ensure consistency in the application of the law.
One especially thorny issue was whether residents can bring family members to join them. Partners in a “durable relationship” can, although the definition of that status is flexible.
While pro-Brexit campaigners promised that leaving the EU would mean a huge inflow of money to the U.K., in fact London will pay a hefty bill to leave. The EU had asked for €100 billion for a divorce, which entailed all of Britain’s commitments under the current seven-year EU budget. After protracted debate, Britain has agreed to honor those commitments up to 2020 along with its share of ongoing liabilities, such as EU international aid and other projects. The exact amount is not clear and the EU has not released a figure because the numbers will change. British officials reckon the bill is between €40 and €45 billion, or about $53 billion. Experts believe that London could be paying for decades as some liabilities, such as pensions, will take decades to come due.
The final issue was the border between Northern Ireland and the Republic of Ireland. Dublin wanted to ensure that there was no “hard border” between the two, understandable given Republican sensitivities about signs of a new division on the island. That created two sets of problems for British Prime Minister Theresa May. First, Scotland and Wales, both of which voted against Brexit, will demand any special rights given to Northern Ireland. Second, May’s government depends on support from the Democratic Unionist party in Northern Ireland, and it is against any deal that would separate Northern Ireland from the U.K. The result was a pledge to maintain a “soft border” while remaining silent on how that would be achieved and while Northern Ireland remains outside the single EU market. London did promise that if a hard border is established it will come up with “specific solutions to address the unique circumstances of the island of Ireland.”
With that fudge, negotiators can now turn to hammering out the terms of the transitional period before the split. That will be even more contentious. There is no agreement on the length of the transition phase — London wants a two-year deal, while the EU expects it to take at least twice as long to reach a final agreement on their ultimate economic relationship — and Britain wants to fold final talks into transition negotiations. The transition talks will not begin until March of next year, and EU draft guidelines for them now note that negotiations on the final relationship cannot officially begin until Brexit is complete, or April 2019. Before then, only a general “political declaration” is possible.
In fact, this is all politics. The agreements that have been reached remain tentative and thus dependent on momentum to remain valid. If either side loses faith in the other or the negotiating process, the preliminary deals will come apart. Given the precariousness of the May government — evident from the difficulties in reaching agreement over Northern Ireland — this is a very real prospect. Despite last week’s breakthrough, Brexit remains as tentative and confused as ever.
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