This week sees the first Brexit talks between the two sides since March’s European Council Summit, but neither David Davis nor Michel Barnier are expected at these negotiations. Principally they are aimed at tackling overhanging issues from the draft withdrawal agreement, particularly Northern Ireland, but they will also see the first discussion on the future trade relationship between the UK and the EU.
This first meeting will focus on how to manage those talks, rather than issues of substance in relation to the future relationship.
Despite the lack of time before the October deadline for the agreement on the UK’s withdrawal and the annex to it “taking into account the future relationship” there has been a noticeable relaxation in Brussels about the ticking clock.
For the last year the constant refrain was that time was running out and the UK needed to make up its mind. Part of that cacophony of complaints was tactical, the EU wanted to force the UK to show its hand before it did the same, but it did also reflect concerns in Brussels that the difficult issues around the financial settlement and citizens’ rights might not be agreed in time.
Relations between the UK and the rest of the EU have noticeably improved as some of the thornier withdrawal issues have been dealt with and the display of solidarity after the Salisbury attack has also helped ease tension, and this new mood is being reflected in much of the language from Brussels.
However, despite the warming relations, one very serious roadblock is coming into view very quickly.
The issue of the border between Northern Ireland and Ireland was not resolved both in the draft withdrawal deal and in the enthusiasm around a draft agreement on the transition deal. However it is unlikely to remain unresolved for much longer.
This week, President Tusk again reiterated that without a future deal to keep the Northern Irish border open, there would be no withdrawal agreement and no transition period. Behind the scenes in Strasbourg this week, the gossip was that the Irish government is prepared to go “all in” on this position in June.
Quite what this means for any deal is unclear. The Irish position, backed at the moment by the other 26 EU states, appears to be to hold firm on a demand which it knows the British government cannot meet, or any British government in fact. Any deal to keep the whole UK in the single market and customs union (the only viable option to avoid a different border to today's border) undermines the whole point of Brexit, means none of the issues that led to Brexit are addressed, and will actually leave the UK in a much worse position than being an EU member state. It would be bound by the same rules but without a say in those rules. If the UK agreed to such a scenario it would be better off to stay in the EU, which may be why the EU is pushing so hard on this point.
The other option the EU has proposed of Northern Ireland alone staying in the customs union and single market would split the province from the UK, violates the Good Friday agreement, couldn’t be agreed by any UK Prime Minister and would probably not get through the UK Parliament anyway given the parliamentary arithmetic and the government’s need for DUP support for any deal.
So there appears to be no way to meet the Irish government demands. The question will therefore be, who backs down first? Will the UK back down, most likely by trying to extend Article 50 to have more time to get a solution to this deal, or will the EU ultimately back down as the Brexit date approaches?
If neither side backs down, and the situation doesn’t change, there will be no withdrawal agreement or transition deal. The UK will crash out of the EU on the 30th March next year, without any agreement on any issue, including citizens’ rights, the budget or the Irish border.
This may be bad for the UK, but it will be very bad for many EU countries. Ireland would face the hardest of hard borders and the loss of its largest trading market. Cyprus and Malta would see summer 2019 devastation in their tourism industries as the flights that bring British holidaymakers (70-80% of total tourists to these countries come from the UK) wouldn’t be able to take off. Spain and Greece would face similar challenges. Flanders and the Netherlands would also see significant industrial downturns in such a scenario.
It therefore remains to be seen whether the EU would continue to back such a hard Irish position if it became clear that this will lead to a no deal scenario. Until recently the talk behind the scenes was that they would not. The most likely outcome is therefore that after a summer of trouble, the EU position becomes less united and Ireland is encouraged to find a form of words which allows its government to save face and postpone the ultimate battle to the future trade discussions. In this case postponing border talks until after the transition deal is agreed.
So despite a relatively quiet Easter, where other issues have dominated the agenda, the Brexit talks are about to get serious once more. The irony is that just as time begins to run out, all sides have started believing that the clock isn’t ticking quite as quickly as it was previously.
The transition deal is not a done deal yet, as the next few weeks will demonstrate. The UK will leave the EU with or without a transition deal in 11 months' time. If there is a transition, there is plenty of time to plan for the future trade relations, if there isn’t, time is fast running out.
High stakes are being played, and it is not at all clear where the cards will fall come the end of the summer.