Europe Should Cut Boris Johnson a New Brexit Deal

(Bloomberg Opinion) — Britain’s new prime minister, Boris Johnson, won the job promising to do something Europe’s leaders have long refused to allow: renegotiate the Brexit withdrawal agreement. The EU should think again — not to help Johnson, but for strictly selfish reasons.The constant sticking point in the Brexit saga has been the so-called backstop — the plan to avoid new border infrastructure between Ireland, which will remain part of the EU, and Northern Ireland, which won’t. This ties the U.K. into a customs union with the EU and requires compliance with much of Europe’s single-market regulation. It would be a kind of second-class membership, with no say in the rules, and no exit clause. The U.K. can devise alternative border arrangements, but Europe gets to decide whether they suffice, and Britain can’t quit the arrangement unilaterally.You can see why Brexiteers are unimpressed. Opposition to this part of the Brexit deal is the main reason Theresa May’s government failed, three times, to get the agreement through parliament. It’s why Johnson is now in charge. Amid the current political chaos, rule nothing out — but the chance that the deal as it stands can be revived in the next 100 days (the Brexit deadline is Oct. 31) and might pass at a fourth attempt seems vanishingly small.Other possibilities are much more likely — a deliberate no-deal Brexit of the kind Johnson has promised as a last resort, an accidental no-deal Brexit if Brexiteers and Remainers in Parliament continue fighting each other to a standstill, a second referendum, a general election — even, conceivably, unilateral revocation of the decision to quit the union. Here’s the thing: All of these possibilities are worse for the EU than agreeing to a new deal with no backstop.A no-deal Brexit would hurt Britain severely, no doubt — but it would also damage the EU’s economies at a time when their prospects aren’t bright. A referendum, general election or revocation of the U.K.’s Article 50 notice to quit would each cause further protracted delay and uncertainty, quite likely with a constitutional crisis (or crises) thrown in for good measure. Again, the U.K. would be the principal victim of the ongoing turmoil — but, again, Europe would suffer collateral damage. A Britain’s that’s half in and half out of the EU is a paralyzing distraction.None of these alternatives offers closure, or even a foreseeable outcome. Europe’s leaders are already sick, justifiably, of the Brexit saga. And that’s why they should be helping to push it toward, rather than away from, an orderly resolution.The form this should take is simple: Take the backstop out of the withdrawal agreement and replace it with an undertaking to avoid, by whatever means, installing physical infrastructure at the Northern Irish border. Exactly how much of a challenge it will be to devise an invisible border depends on the specifics of the long-term trade deal that Britain and the EU eventually strike. Formal negotiations on that long-term deal have barely begun, because Europe insisted on settling the details of the exit deal first. The withdrawal agreement provides for a transitional period where trade arrangements don’t change, pending agreement on the long-term deal. The backstop issues can therefore be tabled and dealt with later.There are two main objections, both seemingly accepted as self-evident truths. In fact, both are plainly wrong.First is the idea that this solution would betray the people of Ireland, north and south of the border, by leaving a vital question affecting their futures unresolved.  But whether one likes it or not, the border issues cannot be fully resolved until the long-term trade deal is finished and the exact nature of the problem laid bare.True, technological and administrative solutions will take time and money to work out — but they aren’t impossible and shouldn’t be dismissed as magical thinking. Bear in mind that EU members apply different rates of value-added tax, which would ordinarily require border checks; these are avoided using exchanges of information, registration schemes, and behind-the-border procedures. The challenge posed by a U.K. that stood outside the customs union and single market would be much greater, but the problem isn’t insuperable.Also, Britain and Ireland both have a compelling security interest in maintaining a low-friction border: A post-Brexit Britain is most unlikely to shirk this obligation. Bear in mind, as well, that in the case of a no-deal Brexit — the alternative that the EU seems willing to contemplate — it’s Brussels, not London, that will be calling for new infrastructure on the border to curb smuggling and protect the integrity of the EU’s single market. The claim that Europe’s insistence on the backstop arises from its overriding concern to maintain an invisible border and peace in the North is more than a little disingenuous.The second objection is that Johnson would seize on any concession as a victory — and the EU, eager to discourage further defections, can’t allow the U.K. anything that looks like success. But if this was ever a danger, the events of the last three years have dispelled it. No other member of the European Union could look at what has happened in Britain since the referendum passed in 2016 and think, “That’s the way to go.”The country’s politics is shattered. The economy has taken a serious hit, with more to come. Two prime ministers have lost their jobs. And the country’s standing in the world seems damaged beyond repair. Is that not a sufficient deterrent? Allowing an orderly exit wouldn’t undo the economic and political harm that Britain has already inflicted on itself. Nor would it assure Brexit’s success — assuming, of course, that Europe’s leaders are right that the EU confers great benefits on its members.Talks and refusals to talk are matters of strategy, and the best course isn’t always obvious. In this case, though, it is. Europe should think again. Insisting on the backstop and refusing to reopen the withdrawal agreement is just plain irrational.To contact the author of this story: Clive Crook at ccrook5@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Clive Crook is a Bloomberg Opinion columnist and writes editorials on economics, finance and politics. He was chief Washington commentator for the Financial Times, a correspondent and editor for the Economist and a senior editor at the Atlantic.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

(Bloomberg Opinion) — Britain’s new prime minister, Boris Johnson, won the job promising to do something Europe’s leaders have long refused to allow: renegotiate the Brexit withdrawal agreement. The EU should think again — not to help Johnson, but for strictly selfish reasons.

The constant sticking point in the Brexit saga has been the so-called backstop — the plan to avoid new border infrastructure between Ireland, which will remain part of the EU, and Northern Ireland, which won’t. This ties the U.K. into a customs union with the EU and requires compliance with much of Europe’s single-market regulation. It would be a kind of second-class membership, with no say in the rules, and no exit clause. The U.K. can devise alternative border arrangements, but Europe gets to decide whether they suffice, and Britain can’t quit the arrangement unilaterally.

You can see why Brexiteers are unimpressed. Opposition to this part of the Brexit deal is the main reason Theresa May’s government failed, three times, to get the agreement through parliament. It’s why Johnson is now in charge. Amid the current political chaos, rule nothing out — but the chance that the deal as it stands can be revived in the next 100 days (the Brexit deadline is Oct. 31) and might pass at a fourth attempt seems vanishingly small.

Other possibilities are much more likely — a deliberate no-deal Brexit of the kind Johnson has promised as a last resort, an accidental no-deal Brexit if Brexiteers and Remainers in Parliament continue fighting each other to a standstill, a second referendum, a general election — even, conceivably, unilateral revocation of the decision to quit the union. Here’s the thing: All of these possibilities are worse for the EU than agreeing to a new deal with no backstop.

A no-deal Brexit would hurt Britain severely, no doubt — but it would also damage the EU’s economies at a time when their prospects aren’t bright. A referendum, general election or revocation of the U.K.’s Article 50 notice to quit would each cause further protracted delay and uncertainty, quite likely with a constitutional crisis (or crises) thrown in for good measure. Again, the U.K. would be the principal victim of the ongoing turmoil — but, again, Europe would suffer collateral damage. A Britain’s that’s half in and half out of the EU is a paralyzing distraction.

None of these alternatives offers closure, or even a foreseeable outcome. Europe’s leaders are already sick, justifiably, of the Brexit saga. And that’s why they should be helping to push it toward, rather than away from, an orderly resolution.

The form this should take is simple: Take the backstop out of the withdrawal agreement and replace it with an undertaking to avoid, by whatever means, installing physical infrastructure at the Northern Irish border. Exactly how much of a challenge it will be to devise an invisible border depends on the specifics of the long-term trade deal that Britain and the EU eventually strike. Formal negotiations on that long-term deal have barely begun, because Europe insisted on settling the details of the exit deal first. The withdrawal agreement provides for a transitional period where trade arrangements don’t change, pending agreement on the long-term deal. The backstop issues can therefore be tabled and dealt with later.

There are two main objections, both seemingly accepted as self-evident truths. In fact, both are plainly wrong.

First is the idea that this solution would betray the people of Ireland, north and south of the border, by leaving a vital question affecting their futures unresolved.  But whether one likes it or not, the border issues cannot be fully resolved until the long-term trade deal is finished and the exact nature of the problem laid bare.

True, technological and administrative solutions will take time and money to work out — but they aren’t impossible and shouldn’t be dismissed as magical thinking. Bear in mind that EU members apply different rates of value-added tax, which would ordinarily require border checks; these are avoided using exchanges of information, registration schemes, and behind-the-border procedures. The challenge posed by a U.K. that stood outside the customs union and single market would be much greater, but the problem isn’t insuperable.

Also, Britain and Ireland both have a compelling security interest in maintaining a low-friction border: A post-Brexit Britain is most unlikely to shirk this obligation. Bear in mind, as well, that in the case of a no-deal Brexit — the alternative that the EU seems willing to contemplate — it’s Brussels, not London, that will be calling for new infrastructure on the border to curb smuggling and protect the integrity of the EU’s single market. The claim that Europe’s insistence on the backstop arises from its overriding concern to maintain an invisible border and peace in the North is more than a little disingenuous.

The second objection is that Johnson would seize on any concession as a victory — and the EU, eager to discourage further defections, can’t allow the U.K. anything that looks like success. But if this was ever a danger, the events of the last three years have dispelled it. No other member of the European Union could look at what has happened in Britain since the referendum passed in 2016 and think, “That’s the way to go.”

The country’s politics is shattered. The economy has taken a serious hit, with more to come. Two prime ministers have lost their jobs. And the country’s standing in the world seems damaged beyond repair. Is that not a sufficient deterrent? Allowing an orderly exit wouldn’t undo the economic and political harm that Britain has already inflicted on itself. Nor would it assure Brexit’s success — assuming, of course, that Europe’s leaders are right that the EU confers great benefits on its members.

Talks and refusals to talk are matters of strategy, and the best course isn’t always obvious. In this case, though, it is. Europe should think again. Insisting on the backstop and refusing to reopen the withdrawal agreement is just plain irrational.

To contact the author of this story: Clive Crook at ccrook5@bloomberg.net

To contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.net

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Clive Crook is a Bloomberg Opinion columnist and writes editorials on economics, finance and politics. He was chief Washington commentator for the Financial Times, a correspondent and editor for the Economist and a senior editor at the Atlantic.

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