Britain may be about to break its deal on Brexit

British bank notes. (Chris Ratcliffe/Bloomberg News)
British bank notes. (Chris Ratcliffe/Bloomberg News)

The Financial Times reported Monday morning that the United Kingdom government is planning to break its initial withdrawal agreement with the European Union, by introducing new legislation that would undermine parts of the agreement that affect Northern Ireland.

This has had immediate consequences, leading the British pound to fall sharply, and U.S. Rep. Brendan Boyle (D-Pa.) to warn that there may be no trade deal between the U.K. and the United States if the U.K. goes ahead with its plan. Yet the long-term consequences may be more profound, making it harder for Britain and the European Union to figure out a new relationship. Here’s what you need to know.

Britain agreed how it would withdraw from the European Union but now wants to take it back

The background to the new crisis is that the U.K. and E.U. already agreed on the broad terms under which Brexit would happen. This “withdrawal agreement” was supposed to have resolved uncertainties that might destabilize peace in Northern Ireland. Brexit might have meant (and might still mean) the introduction of a “hard border” between Northern Ireland and the Republic of Ireland. That, in turn, might have undermined the fragile peace between Northern Ireland republicans (who want a United Ireland) and loyalists (who want Northern Ireland to remain part of the U.K.). A protocol attached to the withdrawal agreement was supposed to ensure that peace could be maintained in Northern Ireland, no matter what else happened in the U.K.-E.U. relationship. The withdrawal agreement was a necessary condition for the beginning of more wide-ranging negotiations, which are taking place right now between the E.U. and U.K. over what their future relationship will look like.

Now, however, the U.K. seems to be planning to break this agreement — less than a year after it was reached. On Wednesday it is publishing new legislation, which government sources say will effectively override the Northern Ireland protocol on the issues of Northern Ireland’s customs arrangements and state aid decisions. At the same time, British Prime Minister Boris Johnson has suggested that the United Kingdom would be able to do perfectly well without any deal with the E.U. on its future relationship.

This is probably a bargaining ploy

Commentators agree that Britain is trying to influence the current negotiations with the E.U. These negotiations are stuck on the issue of state aid. Britain wants the freedom to subsidize British companies without E.U. oversight, while the E.U. believes that this would give British companies an unfair advantage. The U.K.’s proposed changes seem calculated to signal that it will not budge from its hard line on state aid, even if this undermines an agreement that it signed last year. Furthermore, the Conservative government has repeatedly sought to heighten the drama of the negotiations, so that it can present itself to its supporters as a stalwart defender of Britain’s interests, while the E.U. has typically focused on the technical aspects of the deal.

This helps explain why the E.U.’s response so far has been less extreme than might have been expected. E.U. politicians and negotiators don’t know whether the U.K. is bluffing. It may be that the legislation turns out to be less explosive for the negotiations when it is revealed, or that the government quickly and unilaterally decides to roll it back. Furthermore, the E.U. has far less to gain from drama than the current U.K. government.

But bargaining ploys have consequences

Even if the U.K. plans are just a short-term bargaining tactic, they are already having long-term political effects. First, and most obviously, they have changed expectations about the prospects of a broader deal between the E.U. and U.K. This is partly because the U.K. is deliberately signaling that it wants to take a hard line in negotiations. But it is also because it has made a long-term deal less attractive to the E.U. If the U.K. is willing to break a previous deal with the E.U. to gain temporary advantage, why would the E.U. trust it to implement a much bigger, and more politically complicated and costly agreement? And if the E.U. can’t trust the U.K. to deliver the concessions that it has agreed to, why should the E.U. make any concessions in turn?

Second, the U.K.’s ploy will have consequences for Northern Ireland. The protocol was supposed to remove the issue of Northern Ireland’s future political status from negotiations. Now, however, the U.K. clearly wants to use Northern Ireland’s situation — and the risk of a breakdown in Northern Ireland’s peace — as leverage in economic negotiations. That will damage the U.K.’s credibility in its dealings with the parties in Northern Ireland, and the Republic of Ireland, while also undermining the “joint committee” arrangement through which the U.K. and the Republic were supposed to resolve problems in implementation. Finally, it raises the question of what will happen in Northern Ireland if the U.K. and E.U. fail to reach a deal on trade. The protocol was supposed to guarantee continued political stability in Northern Ireland — but stability is unlikely to hold if the United Kingdom is willing to break its commitments.

Finally, the Conservative government’s gambit may have consequences for the makeup of the United Kingdom itself. One of the consequences of Brexit has been a revival of Scottish nationalism. The Scottish National Party (SNP), which controls Scotland’s government, has already announced a new referendum on Scottish independence. The Conservative government’s legislation on state aid was already causing controversy in Scotland. Now, the SNP’s leader has seized upon the controversy to suggest that the legislation will undermine peace in Northern Ireland, and that it shows how the Conservative government is willing to break an agreement that it freely negotiated. Scottish nationalists will surely use the issue to press for Scottish independence from a London government that cannot be trusted to look after Scotland’s interests.

Henry Farrell is SNF Agora Institute Professor at the Johns Hopkins School of Advanced International Studies, 2019 winner of the Friedrich Schiedel Prize for Politics and Technology, and Editor in Chief of the Monkey Cage blog at the Washington Post.

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