The evolving uncertain dynamics of Brexit

Muhammad Zamir | Published: January 27, 2019 21:27:54 | Updated: January 28, 2019 21:28:16

The Queen arrives at an event for the centenary of the Sandringham  Women’s Institute in Newton, Cambridgeshire on January 25, 2019: In a speech to mark the centenary of the Sandringham Women's Institute (WI), the Queen spoke of the virtues of respecting other people's points of view. Queen's speech calling for 'common ground' is seen as Brexit allusion, as the Guardian observes  

Laura Kuenssberg, political editor of the BBC, reported ahead of the Brexit vote in the British Parliament that there were apocalyptic predictions that the British Prime Minister would face a severe defeat. This came true. British MPs rejected the PM's Brexit deal on January 15 with a vote of 432 MPs against and 202 for. Those voting against the present terms of the deal included Conservative rebels - 118, Labour - 248, SNP - 35, Liberal Democrats - 11, DUP- 10, Plaid - 4, Green- 1, and Independent - 5. Those voting for May's terms included 3 Labour rebels and 3 Independent MPs. The deal had earlier suffered a heavy defeat in the House of Lords on the previous  night, as peers backed a Labour motion by 321 votes to 152.

This situation immediately led to Labour leader Jeremy Corbyn tabling a no-confidence motion backed by MPs from the SNP, Liberal Democrats, Plaid Cymru and Green Party. Fortunately for May this vote went in her favour by a margin of 325 to 306. Despite the government's heavy loss in the Brexit vote, Conservative rebels came back on her side in the confidence vote.

This uncertainty in the dynamics reflected the difficulties the British Prime Minister has been facing over her Brexit choices for more than two-and-a-half years. She had spent two years negotiating the plan aimed at bringing about an orderly Brexit on March 29, 2019, and setting up a 21-month transition period to negotiate a free-trade deal with Brussels. Her deal included both the withdrawal agreement on the terms on which the UK leaves the EU and a political declaration for the future relationship.

IMPLICATIONS OF A "NO-DEAL" BREXIT: It would be important at this juncture to clarify what would be the implications of a "no-deal" Brexit where the UK would cut all ties with the European Union (EU) overnight. Theresa May's government, and many others, believe this would be hugely damaging and want a more gradual withdrawal. However, if Parliament cannot agree on that, and nothing else takes its place, the UK will have to leave without a deal. This would mean the UK would not have to obey EU rules. Instead, it would need to follow World Trade Organisation (WTO) terms on trade. Many businesses would also see new taxes on imports, exports and services, which are likely to increase their operating costs. That connotes that the prices of some goods in UK shops could go up. The UK would also lose the trade agreements it had with other countries as a member of the EU, all of which would need to be renegotiated alongside the new agreement with the EU itself. Manufacturers in the UK would also expect to face delays in components coming from across the border.

It is true that within this context the UK would be free to set its own immigration controls. However, some UK professionals working in the EU and UK expatriates could face uncertainty until their status was clarified.

It may also be noted that the European Commission has stated that even in a no-deal scenario, UK travellers will not need a visa for short visits of up to 90 days. The border between Northern Ireland and the Irish republic would also become an external frontier for the EU with customs and immigration controls, though how and where any checks would be made is not clear.

REACTION OF EUROPEAN LEADERS: Analyst Peter Barnes has observed that after the current situation the UK remains on course to leave the EU on March 29 but the defeat throws the manner of that departure - and the timing of it - into further doubt.

Several media outlets have reported how the European leaders have reacted with dismay to the latest round of voting on Brexit. They have however not given any indication they were willing to make concessions. Nevertheless several have also warned of increased chances of a no-deal Brexit, which many MPs fear will cause chaos at ports and damage industry.

Michel Barnier, the EU's chief Brexit negotiator, said Brussels "profoundly regrets" how the UK's MPs voted, after two years of negotiation "based on the red lines of the British government". "It is up to the British authorities today or tomorrow to assess the outcome of this vote and up to the British Government to indicate how we are going to take things forward on 29 March to an orderly withdrawal," he said. European Commission President Jean-Claude Juncker said: "I urge the United Kingdom to clarify its intentions as soon as possible. Time is almost up." European Council President Donald Tusk has also appeared to suggest that the UK should stay in the EU. "If a deal is impossible, and no one wants no deal, then who will finally have the courage to say what the only positive solution is?" he tweeted.

ECONOMIC COSTS OF NO-DEAL BREXIT: It would also be worthwhile to note here some of the important observations made by economist Fabian Zuleeg. He has pointed out that while most UK MPs have repeatedly expressed their determination to avoid a no-deal scenario, so far no alternative approach or compromise appears to have emerged that could command a majority in the House of Commons. This has increased the risk of a no-deal by default on March 29. He has consequently suggested that "while this is not the only possible outcome, prudent risk management demands increased contingency planning for such a scenario, on both sides of the Channel".

Other analysts have referred to another important dimension. They have noted that while the economic costs might be asymmetric, the impact on the EU and its member states would be far from negligible, with significant losses especially for countries with close economic ties to the UK, such as Belgium and the Netherlands. As a result, both parties should make positive efforts to mitigate the worst effects by ensuring that, at the very least planes would be available to fly in critical supplies across the Channel. This aspect requires immediate planning both in short-term and mid-term dimensions. This would be the only way to avert logistical chaos and legal uncertainties that might become significant barriers. However, such contingency planning would be required at the highest political level. This scenario suggests that as time is running out, the EU and its members should coordinate and finalise their strategic positions in case of a no-deal Brexit.

EU27 AND NO-DEAL BREXIT: It needs to be noted though EU27 till now have displayed unity, such harmony is likely to fray in a no-deal scenario, to the detriment of the EU27. In the countries hit hardest by a disorderly Brexit, it is likely that there will be strong domestic pressure to find quick-fix solutions, even if these go against common EU positions. Already in the run-up to a chaotic exit, diverse risks are making some member states far more inclined to extend Article 50 than others. If the UK reneges on its commitments made during the first phase of the negotiations - on EU citizens' rights, financial obligations and the Northern Ireland border - the potential of disagreement between EU member states might increase further.

The evolving dimensions are likely to lead to the EU being faced with some awkward connotations created by a changing political geography, from Gibraltar to the Channel Islands, to Crown dependencies in the rest of the world, as well as for the EU's relationship with countries such as Switzerland, Norway and Turkey. No-deal and the potential of border controls would also be, in all likelihood, be unacceptable to large parts of the population in Northern Ireland. This would put into question the constitutional status quo. Consequently, the potential unification of the island could then be back on the discussion agenda. This could also draw the EU27 into conflict if the emerging pressures result in a re-eruption of violence.

No-deal would make a second independence referendum in Scotland almost certain. Current opinion polls indicate that a chaotic exit might well be enough to lead to a separation of Scotland from the rest of the UK. This chain of events would most likely be followed by an EU membership application. One does not know if the EU is making necessary pre-emptive preparations in this regard.

Socio-economists are pointing out that that there might also be other challenges for the EU 27 in its future relations with the UK. There could be competition and conflict pertaining to contested resources and markets in areas such as fishing and energy. This scenario might open the possibility of the UK adopting intensive mercantilist economic policies, potentially based on lower standards. In global trade relations, the UK could also pursue trade deals by undercutting the EU, driven by a necessity to quickly establish new economic relationships.  

Similarly, strategic analysts have noted that Europe's role in the world could possibly undergo a shift. Current cooperation on issues such as climate change, development or combating tax havens might not then be taken for granted. This would then appear as a challenge in the field of internal and external security for the EU where UK capacities remain substantial within the NATO context. It has also been observed that the EU could then have to deal with situations where a major European power might seek separate strategic relationships with key countries around the world, including the US, Russia and China. This would then open the door to "divide-and-conquer tactics" that might lead to divergent positions on crucial issues such as the global multilateral trade system, sanctions or openness to investment in strategic sectors. This would require the EU 27 in advance to create a common strategic 'negotiation position' for all eventualities that might result from future tribulations.

Muhammad Zamir, a former Ambassador, is an analyst specialised in foreign affairs, right to information and good governance.






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