WAITING 1901(2) CXXVIII

WAITING

By the time you read this the result of the crucial vote in the British Parliament on “Teresa May’s Deal,” thrashed out with the EU several months ago, will be known. As I write defeat seems certain but   May persists with it as the only deal on the table, hoping that enough MPs from all parties will rally round to support it, in the absence of anything better – or worse, since a “No Deal” departure commands even less parliamentary support. Brussels has indicated that the May Deal cannot be renegotiated, though there might be some minor tweaking.  A number of commentators have suggested that this – surely the biggest event in British politics since World War Two – has been mishandled to such an extent as to present a constitutional crisis, without, however, an immediate apparent solution.

With only two months to go before Britain leaves – or crashes out of – the EU, we in Ireland can only watch and wait with trepidation. The issue will probably go down to the very wire as it is in every side’s interest that some deal be cobbled together. Yet there is a strong danger that, with positions entrenched on both sides, we could stumble into a no deal situation. It is perfectly clear that the EU cannot compromise on the vital institutions of the Single Market and the Customs Union. Given this basic reality, which the draft agreement recognised, there was always going to be a downside for the UK in leaving. This has now got through to Britain’s politicians, hence their dissatisfaction, and May is currently thrashing around seeking some give around the edges from Brussels. The outcome is impossible to call. Though not strictly comparable, think how the US would handle the seismic economic and political ramifications if Illinois were to leave/secede peremptorily from the Union.

There are other possibilities. It would be technically (and legally) possible to postpone Brexit were Britain to suspend or revoke its decision to withdraw before 29 March. This would theoretically leave the way clear for Britain to remain in the EU as is, or to hold a second referendum on departure, or indeed on the acceptability or otherwise of the May deal. Failing any solution in the coming weeks (an emergency Summit in late March?), there could well be a temporary suspension of Article 50 in an attempt to buy time. However, could May or any other Prime Minister deliver on this and what would the eventual outcome be? The Brexiteers most potent current argument is that “the people have spoken” with the situation today being portrayed as in some way akin to the 1940 situation in World War Two, when Britain stood alone, the rhetoric redolent with Churchillian undertones and demands for no backsliding..

Apart from the dubious interpretation – Britain did not “win” the War; it made great sacrifices and was on the winning side in what was “a nearest run thing” ( Wellington’s phrase) – the current situation is qualitatively quite different. In 1940 Britain had effectively no choice – fight on or perish.  The Brexit decision, adopted by a narrow majority after an ill-informed referendum campaign, involved opting out and away from the world’s largest and most prosperous multinational entity, in which Britain had power, influence and votes, accounted for 15% of its economy, and which moreover constituted the market for the bulk of its exports, and was crucial for its financial services sector. There was no compulsion; there was no threat.

The mistakes and delusions by Britain’s politicians since  (in particular the notion that the  remaining EU Twenty Seven, with five plus times the economic clout of Britain, would roll over and accede to its demands) have been analysed ad nauseam, yet  one central and disturbing fact remains. As every poll shows, Britain, as in 2016, is split down the middle, so there is no guarantee that any referendum, however it might be worded, would succeed. And arguably the majority in favour of leaving might well increase, with some of the electorate resentful that the democratic will as expressed in 2016 was being disregarded.  The difference with Ireland’s Nice and Lisbon votes are that Ireland did not want to leave the EU but was merely disputing an internal treaty, as it had every right to do, and the EU was able and willing to give Ireland sufficient assurances for the people to vote again. Britain, having painted itself into a corner, has no such option available.

For Ireland there are so many negatives to Brexit, with no silver lining apparent. The draft agreement proposes a two year transition period, hopefully to fast track a fairly comprehensive (and ideally free) trade deal. This is not perfect but would at least allow for normal relations. Should there be a “crash out” no deal, Britain would automatically become a third country, governed in its trade relations with the EU, including Ireland, by whatever were the relevant WTO tariffs and regulations. A customs regime with checks and controls would come into play, replacing what had been a free flowing trading area for decades. The initial shock to the existing systems as they adapted and modified could be considerable. Delays would  be inevitable and almost universal, with all that that implies in terms of interfering with existing, often finely tuned, supply chains and threatening any time-sensitive perishable goods trade, including medicines and radioactive medical applications.

The Brexit threat to Ireland’s prosperity is very real. Sterling is widely forecast to fall, substantially if there is no deal. This will deal a body blow to our economy. Britain remains Ireland’s second largest trading partner (behind the USA) with €1 billion plus traded every week, taking 11% of total exports and is particularly vital for our indigenous industries like agriculture and small businesses. Our meat trade could be devastated. Our interlinked agricultural, health, economic and tourist structures with Northern Ireland will be harmed (a two-way process, be it noted). Our biggest tourist market will come under threat, as currencies fluctuate.

And, while we have diversified our trade dramatically since 1973, the issue is deeper than figures. We are already at a disadvantage in terms of trading with our EU partners by being an offshore island behind an offshore island. This was a handicap when Britain was in the EU, but will become worse after Brexit.  Roughly two thirds of Irish goods exported to Europe (which far exceed exports to Britain) do so via British roads and ports. Customs procedures if introduced will lengthen the time for our exports to reach European markets while we, like Britain, will have OUR supply chains and time sensitive two-way trade affected.

Another aspect, sometimes overlooked, is that for the first time ever after 29 March Ireland will be de-linked umbilically from Britain. Our political independence notwithstanding, we remained economically, socially and culturally linked with Britain in the succeeding decades. We entered the EC, because we had to, such was our dependence on our bigger neighbour, which was joining. As the EU morphed into the comprehensive economic and social organism it is today, so those links with Britain continued, even intensified, though in a healthier more equal form as Ireland developed. Brexit will change this summarily.

7/1/19

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s