Where we are with Brexit as the UK deal with numerous bones of contention

By Mahasweta Muthusubbarayan

With the UK scheduled to leave the European Union in March 2019, the Brexit negotiations have been on in full swing for quite some time now. They began in June this year and are split into two phases. Phase I covers three major issues. These are the so-called UK-EU “divorce deal” (how much the UK owes to the EU to close outstanding liabilities), the issue of the border of Northern Ireland (Northern Ireland voted to remain in the EU in the Brexit referendum), and the rights of the UK expat citizens living in the EU and vice-versa. Phase II of the negotiations will focus on trade (the issue of the single market, customs union and future free trade deals) and UK’s future relationship with the EU. With Phase I now nearing completion, an EU summit to review progress has been scheduled for later this month.

The star Brexit negotiators

British PM Theresa May’s negotiating team consists of veteran Conservative MP David Davis, former defence secretary Liam Fox and foreign secretary Boris Johnson. Simon Case, the incumbent director-general of the UK-EU partnership, has been made responsible for continued cooperation post Brexit. The EU’s chief negotiator is former French foreign minister Michel Barnier. He heads a European Commission task force on the strategic, operational, legal and financial aspects of the Brexit deal.

Progress has been made to various extents on the three aspects of Phase-I of the negotiations. Nevertheless, there are still numerous bones of contention to be resolved within this week if UK and EU hope to take negotiations forward to Phase-II.

The divorce deal

The amount to be paid by the UK under the divorce deal is intended to cover Britain’s share in the EU’s financial obligations and liabilities accrued during Britain’s membership period. There is, however, some obscurity on this aspect of the negotiations. European media reports that an agreement has been reached, but the UK government keeps dismissing media reports as mere speculation and emphasises that no deal has been finalised yet and therefore no obligations incurred, although progress has been made.

As per different media reports, the settlement figures can be estimated to be in the range of 40-60 billion euros, or somewhere around 50 billion pounds. The UK will not be making a lump sum payment of this amount but instead will pay it over a period. The fee is towards obligations such as bills, budgetary costs, loans, EU staff pensions, etc. The Financial Times has reported that the UK has agreed to commitments up to 100 billion euros, but this figure will be offset against the UK’s share in EU’s assets. EU is also required to make some payments to the UK under various development projects and structural funds. Moreover, the UK also has some share capital invested in the European Investment Bank. According to the Guardian, the final sum is only 13% of the £660bn total liabilities the UK has committed to as a member state.

The Irish border

After a limited transition period, the UK will be leaving the single market and the customs union. The consequence of Northern Ireland choosing to remain with the EU against Brexit is that a ‘hard land border’ might be introduced between the Republic of Ireland and Northern Ireland. This would entail customs posts, controls and immigration checks, something the UK wishes to avoid. It does not want any physical infrastructure at the border. However, Britain does not seem to have any concrete proposals or guarantees on how to prevent the border restrictions and checks. The Irish are also concerned that technology like CCTV cameras, license plate recognition technology and computerised trader schemes by themselves will not be able to prevent smuggling. Customs officials feel that both physical checks and technology will be required to monitor international trade. There were suggestions that customs controls could be shifted to seaports and airports instead of the land border, but this has also been rejected. The UK has also sought exemption from new customs tariffs for small and medium-sized businesses. If a tariff-free trade is not maintained, Northern Ireland will be the automatic point for tariff checks.

The only point of agreement between the UK and Northern Ireland appears to be that the border between Northern Ireland and the Republic of Ireland should be ‘seamless and frictionless’ and the peace achieved in the past 25 years should not be wasted. The Irish Government also wants assurances on a transition period and the retention of a common travel area between the UK and Ireland. It also asks for the protection of the Good Friday Agreement (which governs Northern Ireland’s present devolved system of government and created a number of institutions between Northern Ireland and the Republic of Ireland, and between the Republic of Ireland and the UK), apart from avoidance of a hard border. Northern Ireland also wishes to avoid ‘regulatory divergence’ between itself and the Republic of Ireland.

European Council President Donald Tusk has categorically stated that if the UK offer on the border on the island of Ireland is unacceptable for Ireland, it would also be unacceptable for the EU as well. Theresa May’s Monday meeting with European Commission President Jean Claude Juncker also failed to yield a final settlement on the border issue as Arlene Foster, the leader of the Democratic Unionist Party, told Ms. May that she could not support the government’s stand on keeping Northern Ireland aligned with EU laws to avoid a hard border.

Rights of expats

UK has proposed that all EU nationals lawfully resident in its territory for five years will be able to apply to the Home office for ‘settled status’ and can bring spouses and children over. Work and study benefits will be offered but not a permanent residence. The UK expects reciprocity from the EU in this regard. EU has apparently snubbed Ms May’s offer as it feels that UK law might reduce the rights of its citizens. The EU Parliament wants settlement claims to be processed unconditionally, without a criminal records check or the need for individual members of a family to make separate applications. EU wants to offer British citizens ‘associate citizenship’ with the EU after Brexit. It also wants Britain to agree to let the European Court of Justice oversee and enforce the rights of EU citizens in Britain, a point which has found bitter disfavour with Britain.

Britain intends to introduce a new immigration policy for EU citizens to travel to and live in Britain. It will also limit the number of immigrants. Ms May has sought to reassure the rights of its citizens in the EU and has promised that the Government will provide them with continued healthcare and pension benefits. Britain also wants for its citizens, the right to live anywhere in the EU and to move freely from one country to another (onward movement rights). But the EU has failed to make any commitment in this regard.

Crucial stage

Phase-I Brexit negotiations have now reached a vital stage as the EU will convene a summit in December to judge whether sufficient progress has been made to enter Phase-II of talks. The 27 EU member-nations are also due to receive an update soon regarding this matter. While further negotiations on Brexit are to continue and it is hopeful that substantial progress will be made this week to bring about some finality to phase-I, nothing has yet been concluded on paper, and there is still a long road to consensus. Theresa May is under pressure from a section of the British political scene to withdraw from negotiations if EU fails to initiate Phase-II this month. Any draft deal drawn up by negotiators will also have to be approved by at least 20 EU countries having 65% of EU’s population and ratified by the European Parliament. It will be a mammoth feat for so many nations to agree on all points of a settlement. Further, the British Parliament also has to accord its sanction to any agreement reached. Europe is entering a period of uncertainty, and many clashes and struggles can be expected before the UK finally leaves the EU and the Brexit is complete.

Featured Image Source: Visual Hunt / CC BY-NC-ND