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Can Anyone Trust Johnson to Get a Brexit Deal?

(Bloomberg Opinion) -- Boris Johnson is no stranger to having cake and eating it. He has promised Brexit “do or die,” but insists he is prepared to leave the European Union without a deal. Not even his own brother is buying it.“Let us be absolutely clear: This government is going to get a deal from our friends in Brussels,” the prime minister said on Wednesday. “We will get the backstop out.”This suggests one of three things: either Johnson is bluffing, he actually means it, or is being sincere – but entirely unrealistic.There are many in the markets who think that a deal will be done. Why? Because there is so much to gain on both sides from that outcome: It would lift a weight off the pound and revive business investment. It would also avert a deep freeze in EU-U.K. relations and allow trade talks to begin.A deal that got parliamentary approval would also provide some political redemption for Johnson. What prime minister wouldn’t want to clinch such a victory? What country or trading bloc slouching toward recession wouldn’t want to avoid the alternative? And yet there is much to suggest that Johnson’s position is similar to Donald Trump claiming that he will build a wall and Mexico will pay for it.First, there is a well-documented history of Brexiters promising fantasy deals.“After we establish full legal independence we can then decide which EU-inspired rules and regulations we want to keep,” Michael Gove, Johnson’s partner in the Leave campaign and now minister responsible for Brexit planning, told an audience in April 2016. “One thing which won’t change is our ability to trade freely with Europe,” he promised. It’s hard to take Johnson’s assurances today at face value in light of misstatements like these.Second, there is motive. If Johnson doesn’t profess to want a deal, he is then left admitting that the only thing he really wants is a no-deal Brexit. That would scare off many moderate conservative voters, even those who support Brexit. And who would he blame if that proves, as widely predicted even by the government’s own estimates, to impose some rather unfortunate costs and burdens on business and ordinary people? It’s useful to say you tried to find a compromise but the other side – in this case, the EU or parliament – were unreasonable.Third, where is the evidence of deal-making? The EU keeps saying they are waiting for proposals that haven’t materialized. Johnson dodged Jeremy Corbyn’s questions on Wednesday about whether he had actually made any proposals to Brussels. He accused the Labour leader of obstructing negotiations by forcing the government to seek an extension – but Corbyn shot back, saying “I fail to see how I can be accused of undermining negotiations because there are no negotiations taking place.”Even backbench Conservative MPs looking for a crumb of comfort, or at least a ladder to climb down, were disappointed. “Having met the prime minister earlier today, I was unconvinced that he had a plan to reach a deal on Brexit,” David Gauke tweeted on Tuesday before voting in favor of legislation stopping a no-deal Brexit. If an agreement really was in the offing, Johnson’s own brother Jo, who resigned Thursday citing the tension between family loyalty and national interest, might well have stuck around. The prime minister’s argument that he will get a deal rests on there being a way out of the Irish backstop that both sides can live with. For Brexiters, the problem is the provision could lock the U.K. inside the EU’s customs union in order to keep the border with Ireland open. For the EU, maintaining the integrity of its single market is paramount.Johnson claims resolving this is a simple matter of accepting other options. It’s not so straightforward.The independent Alternative Arrangements Commission produced a lengthy report, supported by Brexiters, that goes into considerable detail about replacing the backstop with behind-the-border checks, multi-tiered trusted trader programs, special economic zones, and exemptions for the smallest firms. Ireland and the EU have considered these ideas and found them wanting, for various reasons including cost, enforceability, and political acceptability.A more recent proposal drawn up by Jonathan Faull, a respected former European Commission director general, and two legal academics, argues that Ireland and the U.K. should use their legal systems to enforce each other’s policies, making it a criminal offense to knowingly export goods across the border that breach the other side’s regulatory rules. Customs would be processed in trade centers away from the border. It’s an innovative approach that nonetheless relies on a great deal of trust and the robustness of the law enforcement and judicial systems on both sides.It also requires people to recognize a border which, after the Good Friday Agreement, many don’t. The very existence of a different set of rules politicizes the border in a way that could cause tensions to flare up: Non-compliance could be seen by one community as a sign of defiance.There are similar proposals around. Former Ulster Unionist Party leader Reg Empey also wants to make transport of non-compliant goods an offense in British law and suggests a North-South ministerial body to monitor and regulate trade across the border with the U.K. government providing the EU with an indemnity in the event of any violations.Pressed repeatedly this week on whether he has a plan, Johnson reportedly told the 1922 Committee of Conservative MPs that he is ready to propose an alternative to the backstop ahead of talks with Irish Taoiseach Leo Varadkar next week. He seems to favor a proposal under which Northern Ireland would match EU rules in certain areas like food and agriculture. The Northern Ireland Assembly (suspended since January 2017 amid deadlock between nationalists and unionists) would possibly be given a veto on future EU rules. This would require the bloc to concede that it cannot have full control over goods crossing the border (although possibly the EU would be given an emergency brake to use in case China or others abused this open door).In other words, workarounds to the backstop exist; but all are inferior to the current open border and require concessions, impose economic costs and carry political risks. Whether or not any are acceptable is a political question and depends, for both sides, entirely on whether the best-available alternative is deemed worse than the long-term cost of compromise.It’s unclear, for example, whether the Democratic Unionist Party, which has staunchly opposed Northern Ireland being treated differently from the rest of the U.K., can live with a compromise that crosses that red line. Johnson, no doubt, hopes that by calling and winning an election he would no longer be dependent on the DUP’s support in parliament – but that is quite a gamble.Even if he can devise a cake-and-eat-it solution, any concessions would be weaponized in an election campaign by Nigel Farage’s Brexit Party. That could be enough to deny Johnson his victory at the polls.A deal that replaces the hated backstop isn’t impossible; it just requires a parliamentary majority and a compliant EU and Ireland. So far, there are no signs of any of them.To contact the author of this story: Therese Raphael at [email protected] contact the editor responsible for this story: Edward Evans at [email protected] column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

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(Bloomberg Opinion) -- Boris Johnson is no stranger to having cake and eating it. He has promised Brexit “do or die,” but insists he is prepared to leave the European Union without a deal. Not even his own brother is buying it.“Let us be absolutely clear: This government is going to get a deal from our friends in Brussels,” the prime minister said on Wednesday. “We will get the backstop out.”This suggests one of three things: either Johnson is bluffing, he actually means it, or is being sincere – but entirely unrealistic.There are many in the markets who think that a deal will be done. Why? Because there is so much to gain on both sides from that outcome: It would lift a weight off the pound and revive business investment. It would also avert a deep freeze in EU-U.K. relations and allow trade talks to begin.A deal that got parliamentary approval would also provide some political redemption for Johnson. What prime minister wouldn’t want to clinch such a victory? What country or trading bloc slouching toward recession wouldn’t want to avoid the alternative? And yet there is much to suggest that Johnson’s position is similar to Donald Trump claiming that he will build a wall and Mexico will pay for it.First, there is a well-documented history of Brexiters promising fantasy deals.“After we establish full legal independence we can then decide which EU-inspired rules and regulations we want to keep,” Michael Gove, Johnson’s partner in the Leave campaign and now minister responsible for Brexit planning, told an audience in April 2016. “One thing which won’t change is our ability to trade freely with Europe,” he promised. It’s hard to take Johnson’s assurances today at face value in light of misstatements like these.Second, there is motive. If Johnson doesn’t profess to want a deal, he is then left admitting that the only thing he really wants is a no-deal Brexit. That would scare off many moderate conservative voters, even those who support Brexit. And who would he blame if that proves, as widely predicted even by the government’s own estimates, to impose some rather unfortunate costs and burdens on business and ordinary people? It’s useful to say you tried to find a compromise but the other side – in this case, the EU or parliament – were unreasonable.Third, where is the evidence of deal-making? The EU keeps saying they are waiting for proposals that haven’t materialized. Johnson dodged Jeremy Corbyn’s questions on Wednesday about whether he had actually made any proposals to Brussels. He accused the Labour leader of obstructing negotiations by forcing the government to seek an extension – but Corbyn shot back, saying “I fail to see how I can be accused of undermining negotiations because there are no negotiations taking place.”Even backbench Conservative MPs looking for a crumb of comfort, or at least a ladder to climb down, were disappointed. “Having met the prime minister earlier today, I was unconvinced that he had a plan to reach a deal on Brexit,” David Gauke tweeted on Tuesday before voting in favor of legislation stopping a no-deal Brexit. If an agreement really was in the offing, Johnson’s own brother Jo, who resigned Thursday citing the tension between family loyalty and national interest, might well have stuck around. The prime minister’s argument that he will get a deal rests on there being a way out of the Irish backstop that both sides can live with. For Brexiters, the problem is the provision could lock the U.K. inside the EU’s customs union in order to keep the border with Ireland open. For the EU, maintaining the integrity of its single market is paramount.Johnson claims resolving this is a simple matter of accepting other options. It’s not so straightforward.The independent Alternative Arrangements Commission produced a lengthy report, supported by Brexiters, that goes into considerable detail about replacing the backstop with behind-the-border checks, multi-tiered trusted trader programs, special economic zones, and exemptions for the smallest firms. Ireland and the EU have considered these ideas and found them wanting, for various reasons including cost, enforceability, and political acceptability.A more recent proposal drawn up by Jonathan Faull, a respected former European Commission director general, and two legal academics, argues that Ireland and the U.K. should use their legal systems to enforce each other’s policies, making it a criminal offense to knowingly export goods across the border that breach the other side’s regulatory rules. Customs would be processed in trade centers away from the border. It’s an innovative approach that nonetheless relies on a great deal of trust and the robustness of the law enforcement and judicial systems on both sides.It also requires people to recognize a border which, after the Good Friday Agreement, many don’t. The very existence of a different set of rules politicizes the border in a way that could cause tensions to flare up: Non-compliance could be seen by one community as a sign of defiance.There are similar proposals around. Former Ulster Unionist Party leader Reg Empey also wants to make transport of non-compliant goods an offense in British law and suggests a North-South ministerial body to monitor and regulate trade across the border with the U.K. government providing the EU with an indemnity in the event of any violations.Pressed repeatedly this week on whether he has a plan, Johnson reportedly told the 1922 Committee of Conservative MPs that he is ready to propose an alternative to the backstop ahead of talks with Irish Taoiseach Leo Varadkar next week. He seems to favor a proposal under which Northern Ireland would match EU rules in certain areas like food and agriculture. The Northern Ireland Assembly (suspended since January 2017 amid deadlock between nationalists and unionists) would possibly be given a veto on future EU rules. This would require the bloc to concede that it cannot have full control over goods crossing the border (although possibly the EU would be given an emergency brake to use in case China or others abused this open door).In other words, workarounds to the backstop exist; but all are inferior to the current open border and require concessions, impose economic costs and carry political risks. Whether or not any are acceptable is a political question and depends, for both sides, entirely on whether the best-available alternative is deemed worse than the long-term cost of compromise.It’s unclear, for example, whether the Democratic Unionist Party, which has staunchly opposed Northern Ireland being treated differently from the rest of the U.K., can live with a compromise that crosses that red line. Johnson, no doubt, hopes that by calling and winning an election he would no longer be dependent on the DUP’s support in parliament – but that is quite a gamble.Even if he can devise a cake-and-eat-it solution, any concessions would be weaponized in an election campaign by Nigel Farage’s Brexit Party. That could be enough to deny Johnson his victory at the polls.A deal that replaces the hated backstop isn’t impossible; it just requires a parliamentary majority and a compliant EU and Ireland. So far, there are no signs of any of them.To contact the author of this story: Therese Raphael at [email protected] contact the editor responsible for this story: Edward Evans at [email protected] column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Therese Raphael writes editorials on European politics and economics for Bloomberg Opinion. She was editorial page editor of the Wall Street Journal Europe.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

September 06, 2019 at 06:00AM via IFTTT