Chess, Not Chequers (No Blushing, Please)

The controversial Chequers Agreement put forward by the British Government has its detractors. That, perhaps, is putting it mildly given the number of resignations it triggered,

But if Eurosceptics hate it that much, why is the EU talking about rejecting Mrs May’s big compromise? Afterall, much to the chagrin of Jacob Rees-Mogg, the Government has shifted sideways on its redline over the European Court of Justice and there has been real movement on rules and regulations with a common rulebook, with the UK pledging to maintain alignment with EU regulations on goods and agriculture.

There are two outstanding issues that mean this isn’t so much a game of Chequers, but of 3D Chess and the players on both sides had better be able to think creatively if they’re to get the stalemate both sides want and need. Without it, there will be no winner, because neither side can take it all.

The first outstanding issue is that the common rulebook as proposed by the UK Government essentially only applies to goods and agriculture.

Why is this a problem?

Put simply, the Four Freedoms of the European Union as laid down in the Treaty of Rome and then reinforced in the Lisbon Treaty. For the European Commission, the Parliament and the vast majority of Member States, the Four Freedoms are non-negotiable. They are; the freedom of goods, capital, services, and labour. The UK has proposed a deal that addresses goods, but has left out services and has explicitly stated that freedom of movement will end.

This proposal, some may call it ‘cherry picking’, was designed to get round the second and related issue, that of customs arrangements.

Whilst Dover and Hull may understandably be itching for a deal, in order to prevent logistical and administrative chaos at their portsides, the larger issue is around the UK land border with the European Union on the island or Ireland. There has been a lot of loose talk in UK political circles about the EU attempting to annex Northern Ireland. This is both unfair and a misunderstanding the two competing interests with the border.

The first interest is the need of the EU27 to secure the integrity of the Single Market, that is to say ensuing that goods that do not adhere to the rules and regulations of the Single Market do not enter the Single Market by a back door. The lengths that the EU27 will go to to ensure this integrity may seem absurd to some, but it is a bedrock principle and central tenet of EU institutions. It is why they exist.

The second interest is the history of Ireland, the partition and the violence. The Good Friday Agreement is essentially based on the assumption that both Ireland and the UK will retain membership of the European Community, if one side breaks from that partnership then the question of a border between the North and the Republic inevitably comes to the fore and one of the central agreements to ensuring peace in Ireland is put in jeopardy.

So long as these two competing interests remain at loggerheads the likelihood is that either

1. the UK will be forced to back down and effectively accept a Customs Union with the EU27-bloc on all four European freedom principles,
2. there is an agreement that Northern Ireland will retain a form of membership of the Customs Union, effectively splitting off Northern Ireland from the rest of the UK, anathema to both the Conservative & Unionist Party, their coalition partners, the DUP, and many others across the House of Commons and Lords,
3. the UK walks away the the EU and any customs partnership/agreement, very likely ensuring a physical border between the North and the Republic.

All three options present potential constitutional and political crises. Which is why both sides are moving towards what will eventually be a fudge, a brown paper bag option if you will.

Both sides have recently made new moves and both sides have welcomed then rejected mooted proposals. The question is how much more room for movement there is on the Council and in Downing Street. The answer, probably just enough providing the relevent people have the side step required in such a situation. In the end, if a deal is to happen, it won’t be pretty and is likely to infuriate the ultras on both sides of the debate, but hard heads, creative interpretations and a willingness to simply engage in some political make believe might just get us all through this to reach a deal everyone can agree to blush at.

By Daniel Paterson, Senior Counsel