Comment

Sunak’s Protocol deal shows the Brexit tide is turning

Joël Reland / Feb 2023

Photo: Alamy

 

For seasoned Brexit watchers, there is a strong sense of déjà-vu about Rishi Sunak’s attempts to secure revisions to the Northern Ireland Protocol.

The Prime Minister has been working hard behind the scenes to grind out a deal with the EU but, politically weak at home, is struggling to sell this undoubted achievement to MPs. It’s a sentence that could just as well have been written in 2018 as 2023.

Yet, in another sense, the latest events reveal a profound development in the Brexit story. Whether or not Sunak succeeds in getting the Protocol revised, he (and bearing a mind a – very – short period when this could have been said of Liz Truss) is the first British leader since 2016 to be actively seeking to build bridges with the EU rather than burn them.

May, Johnson and Truss all came into office on promises – in one form or another – of turning away from the EU in order to seize new opportunities. Yet Sunak’s mandate was primarily about calming markets and getting the economy growing in the teeth of a severe economic crisis.

Brexit purity, the Prime Minister knows, would actively undermine this agenda. A revised Protocol would allow him to scrap the Northern Ireland Protocol Bill (which threatens to unilaterally rip it up). Unless that Bill is taken off the table, the EU won’t allow the UK into Horizon Europe, and the risk of a trade war remains.

Progress on the Protocol would also unlock other areas of potentially mutually beneficial collaboration. Closer cooperation with the EU on policing and security matters might, for instance, help a Prime Minister who has promised, but so far failed, to stop small boats crossing the Channel.

And it might even allow talks on reducing some of the wider technical barriers to trade between the UK and EU, which over half of firms surveyed by the British Chambers of Commerce say they are still struggling to deal with.

With an estimated 30% fall in the number of UK-EU trading links, and the UK forecast by the IMF to be the only major economy to experience negative growth this year, Sunak knows he needs to get the trading relationship with the EU – which takes over 40% of UK exports – working again.

Not least because the economy is once again a top priority for British voters. It was telling that, soon after Sunak came to power, briefings began about removing barriers to trade and even a ‘Swiss-style’ deal.

Since 2016, politics has consistently triumphed over economics in shaping the UK’s EU policy. This now appears – somewhat haltingly – to be changing.

Added to all of this, we are also seeing the emergence of a broad cross-party consensus on Brexit. Keir Starmer has publicly said he would support a revised Protocol deal and, like Sunak (albeit for different reasons), has no interest in membership of the customs union or single market.

Starmer also sees a better trading relationship with the EU as a path to stronger growth. Labour has already outlined a range of technical changes it would make (an SPS agreement, mutual recognition of conformity assessment and professional qualifications) which would soften some of the Trade and Cooperation Agreement’s sharper edges.

Sunak has not gone as far as Starmer in this respect – probably because of the voter and MP groupings he has to appeal to – but their analysis of the economic and political situation is similar.

All of which raises some new questions for the EU. It has become accustomed, for the past half decade, to a hostile and unstable partner in the UK. Its response has been to show unflinching resistance to requests for special treatment, a clear demonstration to members of how difficult life is outside the bloc, and to accept a distant relationship as a price worth paying for EU unity.

But, if partners in the UK appear increasingly open to constructive rapprochement, does the same EU negotiation playbook still work? After all, the potential compromise on Northern Ireland would owe much to Maroš Šefčovič showing greater flexibility than Michel Barnier ever did. And there are further possible gains from more carrot and less stick.

Were the UK to sign up to mutual recognition deals or a veterinary agreement, it would not only reduce barriers to trade but also bring the UK gentlblunter edgesy back towards the EU’s legal orbit – necessitating ongoing alignment with elements of EU regulation. At a time when the US and China appear increasingly unreliable trading partners, there is surely something to be gained from tying its largest economic neighbour to greater parts of its rulebook? The likes of President Macron might also see it as an important step towards a multi-tier Political Community which creates a more secure European ‘neighbourhood’.

Yet, on the other hand, were the EU to start making more flexible offers, they would seemingly be allowing the kind of cherry-picking for which Theresa May was publicly lampooned by Donald Tusk in 2018 (and by Michel Barnier throughout his book).

How would Switzerland, which has been resistant to EU attempts to turn their ‘patchwork’ of agreements into something deeper and more formal, react to the UK being given arrangements which the Swiss would like to keep for themselves?

And what about if Boris Johnson (or 2.0 variant) takes over as UK Prime Minister in, say, 2029? Can the EU trust the UK, long-term, to continually align itself with EU regulation on vital issues like animal health? If it cannot, such agreements might be more trouble than they’re worth.

Do the benefits outweigh the risks? That’s not an easy question to answer. Ever since 2016, Brexit has fundamentally been about the UK working out the kind of relationship it is willing to accept with the EU. But the world has changed a lot since then, and it looks increasingly like the EU might have to start taking some tough decisions itself.

 

Joël Reland

Joël Reland

February 2023

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