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THE EUROPEAN UNION AND THE BREXIT PARADOX

RAFAEL GARCÍA PÉREZ

rgarcia@upo.es

Full Professor of International Relations. Previously he was professor at the University of Santiago

de Compostela. Currently he is assigned at the Universidad Pablo de Olavide in Seville (Spain).

He also teaches at the Instituto Universitario General Gutiérrez Mellado in Madrid,

Ministry of Defence - UNED.

Abstract

The article analyses the consequences of the withdrawal of the United Kingdom from the

European Union, particularly the political effects of its decision. In the first place, it addresses

the holding of the referendum, and the decision to withdraw, as a paradigmatic example of

the so-called “new politics” that has given special prominence to the so-called populist forces

in Western societies. Then, the peculiar negotiation between the UK and the EU to establish

a withdrawal agreement is examined. Next, the different forms of commercial ties that the EU

currently maintains with third States are identified as a reference to the agreement that may

be established with the United Kingdom. Finally, the viability of the Global Britain project as

a future strategy to regain a position of international influence is evaluated. The conclusion

reached is the paradox that Brexit represents, as the United Kingdom has launched a

traumatic, uncertain and divisive process to achieve an international, political and commercial

position, which in objective terms will be indisputably worse than the one it left.

Keywords

Brexit, European Union, United Kingdom, Referendum, Trade Agreement.

How to cite this article

Pérez, García Rafael (2020). "The European Union and the Brexit paradox". In Janus.net, e-

journal of international relations. Vol. 11, No. 2 Consulted [online] at date of last visit, DOI:

https://doi.org/10.26619/1647-7251.11.2.7

Article received on December 9, 2019 and accepted for publication on September 9, 2020

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THE EUROPEAN UNION AND THE BREXIT PARADOX

RAFAEL GARCÍA PÉREZ

1. The Brexit paradox: a “democratic” decision against Britain's own

interests

A paradox is a "fact or expression apparently contrary to logic" (DRAE)

. It is an

apparently true manifestation that, however, contains a logical contradiction. Brexit

constitutes a paradox in the sense that British voters chose in the June 2016 referendum

an option that is contrary to their own material and political interests.

Undoubtedly, the departure of the United Kingdom from the European Union weakens

the European project, but so far less than expected. Instead, the break will really hurt

the country that is leaving. The economic, commercial and business costs will add up to

a bill yet to be determined, very high in any case, depending on whether the United

Kingdom and the EU finally manage to agree on a mutually beneficial form of economic

and commercial coexistence (Dhingra et al, 2016). In any case, the magnitude of the

material damages that Brexit entails is outweighed by the loss of the positive and

stereotyped image of the country, its political system, the leadership and international

influence that it has wielded through the exercise of its extraordinary soft power. It will

mean a break of its political system that directly affects its party system and threatens

the very constitutional structure of the United Kingdom. Territorial cohesion between the

four nations that comprise it (England, Wales, Scotland and Northern Ireland) is in danger

by giving up European integration. We have seen it in Northern Ireland, where the

possibility of re-establishing an international border places the 1998 Good Friday peace

accords at risk and fuels sentiments in favour of the island's unification. One of the keys

to peace and coexistence in this territory lies precisely in the existence of a porous intra-

community border that is a consequence of the unity of the EU market. A similar concern

is also seen in Scotland, where the Scottish National Party, currently in power, threatens

to hold a new referendum on its relationship with the United Kingdom, encouraged to

retain membership of the EU through future accession once independence is achieved.

Article translated by Carolina Peralta.

A first version of this paper was presented and discussed at the seminar organized by the Centro de

Investigação em Ciência Politica - CICP at Minho University (Braga), in December 2019, with the title: “A

União Europeia perante o paradoxo do Brexit”.

All cited online references were last accessed on 30/09/2020.

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If the motto during the Brexit campaign was to vote out to "take back control”, what one

sees is precisely the opposite. A new paradox.

Why does this situation occur? Is it perhaps a problem of the decision-making mechanism

adopted in consultation with the electorate? Are democratic systems unreliable and

should a momentous decision be voted on? Obviously, the problem is not democracy as

a political system, but rather the evils that afflict Western societies that present a series

of common features shared by many countries (Portugal is an exception), the most

obvious manifestation of which is the rise of the so-called populist forces from one side

of the Atlantic to the other.

Brexit is a paradigmatic example of this process of political change in Western societies

that perhaps symbolizes a change of era. Brexit is analysed here as a representative

category of this process of change in a double dimension: the responsibility of political

leaders who embrace these populist policies for their own advantage and to avoid their

own responsibilities; and the motivation that drives citizens to support such options.

Regarding the first question, Brexit is a clear example of political mismanagement within

the Conservative Party. Threatened by a split as a consequence of the bitter

confrontations that date back decades, and the pressure exerted by the electoral advance

of the demagogic Independence Party (UKIP), Prime Minister David Cameron avoided

holding a congress that would resolve the internal division by convening instead, a

referendum, encouraged by the success achieved in the consultation on the

independence of Scotland (Castellà, 2016). This way, he managed to transfer an internal

problem of the party to the whole country and, by extension, to the whole of the Union.

In order not to face a domestic problem, it generated a constitutional and international

crisis.

Political mismanagement does not concern only the decision to consult the population,

but also the chosen procedure. All major political decisions (such as, for example, a

constitutional reform) are framed in a procedure regulated by the countries’

constitutional systems. Despite their differences, they all share common features: an

extended legislative procedure that allows detailed analysis of the rules to be adopted

and a reinforced voting procedure that requires qualified majorities in the Chamber and,

in some cases, calls for elections for the new parliament to ratify the decision. And also

the holding of a referendum, at the end of the process, to corroborate the decision made,

but never as a consequence of a popular initiative, except in the few constitutional

systems in which it is contemplated, such as the cases of Switzerland or the State of

California (Butler and Ranney, 1978). Faced with this traditional use of the referendum,

the British government used it as a formula for direct democracy, in contradiction to its

political system, which is the archetypal example of parliamentary democracy. In addition

to the known weaknesses of this form of direct democratic exercise (the possibility of

manipulating deliberative assemblies, the opportunity offered to demagogic arguments

or their interested celebration based on the priorities of the rulers' agenda), political

theory had repeatedly warned of the danger that the decisions adopted this way may be

the result of the passions of the moment, without any procedure that imposes limits on

the power of the majority: “Referendum democracy is objectionable mainly because it

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establishes (…) a system majority government that excludes minority rights” (Sartori,

1988: 156).

The procedure followed in the United Kingdom has incurred in all the dangers political

theory warned about: the referendum was held at the beginning of the procedure, the

result of which, to be applied, does not require any reinforced majority and lacks any

other counterweight or filter that conditions its execution. Only once leaving the EU was

approved was the design of the rule that made it possible to apply such a resolution

began. Resorting to a referendum as the supposedly more democratic decision procedure

eliminates the procedural guarantees and the parliamentary debate typical of indirect

democratic systems. It reduces decision time to an instant by simplifying complex

problems to the extreme of reducing them to yes or no. An electoral campaign is not a

parliamentary debate. There is no reply or dialogue, and the opportunity to launch

demagogic arguments, if not simple lies, multiplies, creating a very intense emotional

climate that is increasingly decisive in electoral processes.

A referendum, the exercise of the so-called direct democracy, is not the most appropriate

procedure to make important political decisions. Those who chose to use it do so for

political advantage, to take advantage of the emotional state of an electorate that can

be excited by multiple means and thus avoid a debate that highlights the negative

consequences of the decision, if not its infeasibility.

A referendum is not invalidated as a decision-making mechanism in democratic

processes, but it cannot be a single act, nor should it be placed at the beginning of the

decision-making process. It should be part of a longer and more rigorous process that

allows analysing the consequences of the decision and evaluating the way it will be

carried out. In democratic systems, all these guarantees are given through parliamentary

procedure. Brexit runs aground when it comes to applying the result of the referendum

in Parliament and the consequences derived from the decision are verified, preventing

the majority that would allow its execution.

The referendum, as used in the terms of David Cameron’s government, was self-

advantageous and demagogic. And, of course, its celebration did not bring any

democratic bonus.

Let us now examine the second question posed: the motivation that drives voters to

choose a certain option.

There is a huge amount of academic literature published in recent years that convincingly

explains the process that has allowed the electoral boom of the so-called populisms

(Goodwin and Eatwell, 2019). Although each society has its own domestic ghosts, social

scientists have identified some aspects that are common in all cases where there has

been an electoral victory of these political forces or their postulates, as has undoubtedly

been the case of Brexit.

The first common factor lies in the existence of a fragile society as a consequence of the

growing duality driven by globalization and reinforced by the impact of the 2008 crisis on

Western societies (Rueda, 2014).

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Social dualization is a phenomenon of increasing division that occurs within national

societies between a minority, urban and enlightened group, linked to transnational

production and information chains, and a majority group that is “left behind”, which sees

their material and working conditions deteriorate as wage earners (the end of the middle

classes: Guilluy, 2019). The main consequence of this dualization phenomenon is that it

is increasingly difficult to move from the territorialized to the globalized group, although

not the other way around.

This dynamic generates an extraordinary frustration regarding social promotion

expectations in broad social layers. The social lifting that the welfare state entailed has

ceased to function and its loss fuels growing resentment, which can occasionally manifest

itself in the form of a social explosion, a process identified as the tunnel effect by Albert

O. Hirschman (Costas, 2015). Accordingly, the globalized are "denationalized", while the

territorialized are "renationalized".

They feel unjustly harmed and degraded by their condition as losers in front of the

educated, urban and cosmopolitan groups that stigmatize them. Self-perception as

victims of globalization leads them to reaffirm themselves in everything they reject: the

longing for protectionism (King, 2017) and a kind of national withdrawal from the global,

in the confidence that the nation-state can protect them more effectively than

international or multinational institutions such as the EU (Grygiel, 2016).

The second aspect is how identity, the feeling of belonging to a community, has become

the backbone of mass political action through what Francis Fukuyama has called the

politics of resentment (Fukuyama, 2019: 23), used in different ways.

The identification of groups that are assembled around identity feelings that can be the

most varied is becoming more and more frequent. In addition to the nation, religion or

ethnic group, which traditionally have been the most common, now there are also issues

such as gender or sexual orientation. These groups share the perception that their

identity does not receive the recognition it deserves from others. An allegedly humiliated

group that demands to restore its lost dignity constitutes a more effective mobilizing

element in political processes than rationality based on a cost/benefit calculation. The

emotional appeal to the vote invoking identity feelings is the key that the so-called

populist forces use to win electoral majority by offering fanciful solutions, if not lying and

brazenly manipulating the electorate. The feeling of identity has replaced the materialistic

logic of belonging to a specific social class. The parameters that traditionally defined the

ideological spectrum of Western societies in terms of right and left have been irreversibly

altered (Bobbio, 1995). The definition of political options that were previously made

under material criteria (based on the position occupied in the production system as an

employee or owner) has come to depend on other postmaterialist criteria which,

increasingly, are linked to the feeling of belonging to a certain identity and a system of

values. The globalized are not necessarily “right-wing”, on the contrary (the gauche

brahamane identified by Piketty, 2019). Nor the territorialized are necessarily "left-wing":

in the US, they constitute Trump's electoral base. The anti-globalization, anti-

cosmopolitan and renationalizing reaction can manifest itself both on the left and the

right, but they find a shared channel of expression through populist platforms.

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The third element that allows explaining this dynamic is the cause whereby emotion

prevails in front of reality when voters decide their political option. How do we get to lose

the sense of reality and, even, the very notion of true? Hans Rosling conducted decades

of research to show that humans have a tremendously distorted view of how we perceive

what is happening in the world (Rosling, 2018). Using surveys directed at groups of all

walks of life and nationality on global parameters related to the economy, development,

demography and the environment, he concluded that our perception was always inclined

towards pessimism. The problem is not ignorance, and even less ignorance due to lack

of information, which for decades has been more abundant than ever, although not more

accessible. The problem is our individual perception of the world and reality, deeply

pessimistic and fearful of changes. These negative feelings tend to be stimulated by the

media and certain political groups through discriminatory criteria that tend to disseminate

biased information with a high dramatic impact. They try to capture the attention of the

audience, effectively contributing to establish in the collective conscience the idea that

everything is going wrong, that the future is going to be worse, that they are the harmed

ones and need restitution. The feeling of threatened identity stimulated by a distorted

perception of reality leads to a simplified political choice, to the extreme that reduces the

solution of all problems to a single cause that can be neutralized only with a vote: the

problems are caused by Mexican immigrants, or Jews, or Spain, or the European Union.

The British vote in the referendum constitutes a paradox only if we use a rational choice

analysis typical of other times. It is the paradigmatic example of the new stage where

national and international politics are in, where traditional references to the left or right

do not explain political alignments, where reality is not the basis of the logic of political

action. On the contrary, in many cases reality is an accessory discomfort that can be

easily dispensed with.

2. The European Union and Brexit

The UK's decision to withdraw from the EU Treaty placed the EU in a state of alarm. A

new and very serious problem was added to those already present (design of the euro,

migration crisis,...) pointing to a scenario of "existential crisis" as defined by the president

of the Commission Jean-Claude Juncker (Juncker, 2016). This was due to the relevance

and international weight of the United Kingdom, for setting a precedent that could

influence other Member States, for denying the self-legitimizing and complacent

discourse of inclusive Europeanism. With Brexit, the EU faced a situation that challenged

its own survival: being or not being part of the Union.

More than four years after the referendum, it can be said that the Union has survived,

although all the threats are still present and the problems, rather than resolved, seem

postponed. Neither the euro nor the migratory crisis, nor Brexit, are past, they continue

to be problems of the present with which we will have to live in the future.

Regarding Brexit, the extraordinary political, legal and diplomatic capacity of the EU to

face a challenge that only had a generic treatment through Article 50 of the Treaty of the

Union (TEU) is striking. Throughout the negotiating process, the Union has shown what

possibly are its greatest institutional virtues: an extraordinary regulatory framework

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adapted to specific needs defined through permanent negotiation: the law through

consensus.

Let us recall how the negotiation process started. It was not from the presentation of two

negotiating proposals, one from the United Kingdom and the other from the Union. These

were not two positions that tried to reach a shared synthesis (Patel, 2018). It has never

been an international negotiation. It was something quite different, and it should be

remembered.

In January 2017, Prime Minister Theresa May presented her exit plans and the new

framework of relations that she intended to agree with the Union (May, 2017a). She also

expressed her intention to negotiate a transition period to smooth the process. The

significant delay with which the British Government established its negotiating position

and the fact that it did not formally notify its withdrawal to the Union until 29 March of

that same year should be noted. The intention of trying to gain time was evident but, in

the end, it did not bring her any advantage in the negotiation.

In this document, the British Government established the so-called “red lines” that

defined the objectives it wanted to achieve:

- Establishment of controls to regulate immigration from EU countries.

- Independence of the British justice, which would cease to be under the jurisdiction of

the Court of Justice of the EU.

- Renouncing the single market (which implied giving up participating in the so-called

“four freedoms”: free movement of people, capital, services and goods).

- And instead, negotiate a free trade agreement with the EU.

For its part, the EU responded through the President of the Council, Donald Tusk

(European Council, 2017), establishing the times and the material scope of the

negotiation:

- It was necessary to negotiate, in the first place, the way the British withdrawal would

take place and only when a "substantial progress" had been achieved would a second

negotiating phase take place, with the United Kingdom already a third country, to

agree on a new association agreement.

- The possibility of “à la carte” participation in the Single Market based on sector

approaches was excluded.

- And, finally, it was proposed to solve the most urgent problems derived from the

British withdrawal

- To ensure legal security to resident citizens and companies, avoiding a legal

vacuum that would allow the enforcement of new regulatory measures that violate

acquired rights.

- Demand that the United Kingdom comply with its financial commitments, which

were finally estimated at around € 40,000 million.

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- Study “flexible and creative solutions” to avoid a rigid land border in Northern

Ireland.

With this decision, the European Council managed to thwart one of the few negotiating

tricks that the British Government had: negotiating at the same time the exit and the

future relationship with the EU. By being able to negotiate on those terms, the United

Kingdom would have had the opportunity to conduct the negotiation according to its

interests, which basically consisted of achieving a sort of selective membership in the

Union by fragmenting the single market. Having to accept a negotiation in successive

phases, the British only had to try to break the community bloc by offering bilateral

agreements to the Member States separately (Rogers, 2019)

, or threaten a hard break

in the relationship by taking the resident population hostage (RTVE, 2018) or weaken the

future relationship on security issues (May, 2017b).

The EU has managed to maintain negotiating unity and has faced British threats by

limiting its negotiating capacity in the face of evidence that it could offer nothing in

exchange for its claims. The loss of options led the British Government to use a last

resort: successively threaten the Union with causing total chaos (May, 2018), and to its

Parliament by not leaving the Union if the agreement offered by Brussels was not

approved. Brussels finally accepted the May cabinet after having previously rejected it

(El País, 2019a).

With the British negotiating strategy neutralized, the question was posed in essentially

technical terms: how to shape the exit demands freely and unilaterally expressed by the

British Government? It should be remembered that the “red lines” defined a very narrow

area with little room for manoeuvre.

The work of the Commission and the European negotiating delegation was to give legal

form to these British proposals, protecting the integrity of the acquis communautaire. A

British proposal that was never presented was not discussed, rejected or accepted. On

the part of London, only wishes were expressed and when those wishes were transferred

to the text of a treaty, the result frustrated the emotional illusion generated by Brexit in

such a way that Parliament rejected it up to three times, and by a large majority, the

proposal accepted by its Government. This led to a situation of institutional blockade that

ended up forcing the resignation of Theresa May and the constitution of a new

conservative cabinet led by Boris Johnson as of 24 July 2019.

Johnson, a fierce opponent of the agreement reached by the May government, presented

to the British Parliament a new agreement with the EU negotiated in record time at the

end of October 2019. In reality, it cannot be properly said that it was a new agreement

but rather a modification of the document closed with Theresa May in 2018 that

fundamentally affected the situation regarding the border between Ireland and Northern

Ireland.

“Theresa May did not know how the EU worked when she activated Article 50 and thought she could reach

a Brexit deal by negotiating directly with European leaders. It didn't work during [David] Cameron's

negotiation before the referendum and it hasn't worked now either". Statements by the former permanent

representative of the United Kingdom to the European Union, Ivan Rogers.

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In the 2018 agreement, the so-called “Irish backstop” was intended to prevent the

reinstatement of a physical border between Ireland and Northern Ireland. This provision

sought to preserve the 1998 Good Friday peace accords, which ended three decades of

violence in Ulster, while protecting the integrity of the European single market. It was a

last resort solution that would only come into force if, after the transition period foreseen

in the agreement, London and Brussels did not find a better solution.

In the agreement signed by the Johnson government with the EU on 17 October 2019

(BBC, 2019), the so-called “Irish protocol” ceased to be a safeguard clause to become a

permanent situation as long as the Northern Irish parliament so decided. This agreement

provides that this region is part of the British customs territory, although it is subject to

the Community customs regime and under the jurisdiction of the Court of Justice of the

European Union. This means that border controls will be carried out at the ports of entry

into Northern Ireland and not at the border with the Republic of Ireland, to control goods

declared as destined for Ireland, even if they come from other parts of the UK.

Consequently, the new customs border is moved to the Irish Sea.

To reach this agreement, both the United Kingdom and the EU made important

concessions, which was quite a surprise given the sovereign intransigence that Johnson

had championed until then and the solemn statements made by the European authorities

affirming that the 2018 agreement was closed and could not be renegotiated again (El

País, 2019b).

The determining factor that made it possible to reach the agreement was the change in

the position of the Dublin government, which accepted this compromise solution. This

allowed the alignment of the rest of the Community partners with the Commission, which

from the beginning of the negotiation had given Ireland the last word on this specific

issue of the British withdrawal agreement. The only non-negotiable limit was, and still is,

to preserve the integrity of the European single market, and the agreement guarantees

this.

With his bombastic style, Boris Johnson presented the signing of the agreement with the

EU as a “great victory” (Day, 2019). His best argument was to ensure that the previous

Irish backstop was gone. The survival of this special customs situation was left exclusively

to the Irish Parliament. Every four years, the Assembly of Northern Ireland may vote to

abandon this special regime, which would mean its disconnection from the European

Union and the establishment of the border with Ireland as the external border of the EU.

If the Assembly approves by a simple majority to maintain the special regime, it will be

extended for another four years. In the event that a favourable vote is obtained with a

reinforced majority (which would imply counting on the votes of the Catholic and

Protestant parties), the renewal would be for eight years. In the event that it was not

approved, a two-year period would be established to negotiate the new formula that

would replace it (El Confidencial, 2019).

The Northern Irish unionists of the DUP (Democratic Unionist Party) expressed their

opposition to the provisions in the new agreement, but their influence as a supporter of

the minority Conservative government disappeared when Johnson achieved a

comfortable absolute majority of the chamber on 12 December 2019. The agreement

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was finally approved and the United Kingdom officially withdrew from the EU on 31

January 2020.

Since then, and until the expiration of the transition period on 31 December 2020, the

bilateral relationship has been maintained, in its practical effects, in terms similar to

those that prevailed until then: the United Kingdom remains within the single market and

the customs union during the transition period, without being a member state, and

therefore lacks voice and vote in the community institutions. Although the possibility of

extending the transition period was offered to give more time to the negotiating

committees of the treaty that would regulate the future relationship, the British

Government rejected this possibility. This decision put strong pressure on the negotiating

commissions in charge of agreeing on the treaty that governs future bilateral relations,

as the time available to close a negotiation is limited, which, as has been shown, is

proving extremely difficult.

When it seemed that this chapter had been successfully closed, with the entry into force

of the Withdrawal Agreement (Agreement, 2020) that has allowed the United Kingdom

to formally exit the Union, the British Government presented to Parliament, at the

beginning of September 2020, an Internal Market Bill designed to allow goods and

services to flow freely through England, Scotland, Wales and Northern Ireland when the

transitional period ends on 1 January 2021. Surprisingly, its articles include the possibility

of unilaterally modifying the terms agreed upon in the aforementioned Agreement.

By invoking the right "to act in the best interests of Northern Ireland and the UK internal

market" (UK Government, 2020), the law would allow eliminating the UK's obligation to

control goods destined for North Ireland from the rest of Great Britain. That is, to

eliminate the "border" in the Irish canal, to which it had committed itself in the

Agreement, without re-establishing the territorial border between Ireland and Northern

Ireland. This is precisely the key point on which the Withdrawal Agreement was built,

which ensures both the validity of the Good Friday agreements and the integrity of the

European internal market.

The legislative initiative represents a violation of the terms agreed with the European

Union, of which the British Government is fully aware. The Minister for Northern Ireland,

Brandon Lewis, has publicly stated that: “it will break international law” (The Guardian,

2020a). The head of the British Government's legal department, Jonathan Jones,

resigned as a result.

According to Lewis, it would be a “very specific and limited” violation of international law,

based on the need for the Government to reconsider its international obligations to the

extent that “circumstances” have changed.

Implicitly, the British Government is appealing to Article 62 of the Vienna Convention on

the Law of Treaties, which establishes the rebus sic stantibus principle. The problem is

that the circumstances have not changed, quite the opposite. Even the Agreement itself

provided for the application of this commitment even when a commercial treaty was not

agreed within the foreseen time period.

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Unilateral action by the British Government, should the Internal Market Bill come into

force, violates the UK's international commitments and, as Theresa May has stated before

Parliament (BBC, 2020a), permanently compromises its international reputation

The excess of the British legislative initiative is of such scope that the European

authorities have initiated a disciplinary proceedings after its approval in the Westminster

Parliament by a large majority (340 favourable votes compared to 256 against), even

pending its passage through the House of Lords for final approval. Pressured by the

intransigent wing of the Conservative Party, Johnson had to include an additional

safeguard in the text of the bill according to which the Government will not be able to

modify the commitments reached in the Withdrawal Agreement without the express

authorization of Parliament.

Specifically, the President of the Commission, Ursula von der Leyen, announced the

sending of a "formal notification letter" to open an infringement procedure that will take

the case before the Court of Justice of the EU, under whose jurisdiction the United

Kingdom remains during the current transitional period (The Guardian, 2020b). The

infringement file is not initiated due to possible violations of the Agreement to which the

Internal Market Law may give rise, but due to violation of article 5 of the Withdrawal

Agreement, which includes the need to negotiate in good faith between both parties.

The legal process of the sanctioning file would not be paralyzed with the end of the

transitional period. Article 87 of the Withdrawal Agreement establishes that the European

Commission has a period of up to four years, once the transitional period is concluded,

to initiate a procedure against the United Kingdom, if it considers that it has breached

any of its obligations under the Agreement. The text of the Agreement also provides that

if one of the parties considers that there has been a violation of the agreement, it may

request the creation of an arbitration panel before the Joint Committee, which would be

constituted within three months of the request. If the issue that is the subject of the

complaint is related to Union law, the panel would not pronounce itself and would direct

the matter to the Court of Justice of the European Union as the ultimate interpreter of

Community law.

Although the legal effectiveness of the procedure is limited and, above all, slow, it

represents a gesture of firmness on the part of the Commission in the bilateral trade

negotiation that remains open. Given the antecedents of Boris Johnson’s political

behaviour throughout this prolonged negotiation plagued by stunts, Brussels has not

ruled out that it may be a new theatrical wink directed at the most intransigent sector of

the Conservative Party before reaching a final commitment on the trade agreement under

negotiation, which, to be concluded in the coming weeks, will require some renunciations

with respect to its initial postulates (El Confidencial, 2020a).

Whether or not it is a stratagem in the final stretch of the negotiation, the reality is that

the protocol on Ireland is a highly complex legal instrument that will require, for its

"This can only weaken the UK in the eyes of the world (…) our reputation as a country that sticks by its

word will have been tarnished". John Major, Tony Blair, Gordon Brown and David Cameron have also spoken

out against the bill.

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correct application, not only the goodwill of both parties but also an exhaustive and

rigorous application of the controls envisaged to avoid creating a black hole in the internal

market of the Union. It is an ugly cloud on the horizon that threatens the future

relationship that is finally agreed between the UK and the EU.

3. The trade agreement that would govern future relations between the

UK and the EU

Although future relations between the two partners cannot be exclusively circumscribed

to the commercial sphere, the future trade agreement will be the key to underpin the

bilateral relationship that is established.

The EU does not have a single model for association with its trading partners. In fact, it

is extremely flexible in the type of commercial relationship it establishes with third states.

At present, up to five different forms of connection can be identified (Table 1): through

membership of the European Economic Area, where Iceland, Norway and Liechtenstein

participate; the European Free Trade Association, where Switzerland is located; the

Customs Union Agreements, such as the one with Turkey; a Free Trade Agreement like

the one in force with Canada; and the general framework established by the World Trade

Organization.

Table 1.- Types of commercial relationship between the European Union and third States

Type of

agreement

Countries

Characteristics

European

Economic Area

(EEA)

Island

Norway

Liechtenstein

- Membership of the EEA implies access to the

common internal market with free movement of

people, goods, services and capital.

- Despite not being member states, their participation

is necessary to adopt around 20% of EU legal acts.

- The Common Agricultural Policy and fisheries

policies, the Customs Union, the Common Trade

Policy, the Economic and Monetary Union, the

Common Foreign and Security Policy, and justice

and home affairs are outside the agreement,

although these countries are part of the Schengen

Area.

European Free

Trade Association

(EFTA)

Switzerland

- It participates in the European Economic Area

through EFTA. This implies accepting European

legislation, contributing to the Community budget

and the jurisdiction of the Court of Justice of the EU.

- Outside the Customs Union.

- It is part of the Schengen Area

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- No right to establish banks.

Customs Union

with the EU

Turkey

- Practical freedom of movement of GATS

goods on

services

- No rules of origin and reduced customs costs for

most products.

- EU regulations and standards checked at the border.

Adoption of EU tariffs for non-EU trade. No influence

on regulations or trade agreements signed by the EU

with third States.

- Trade in financial services as a third country.

- Restricted movement of workers.

Free trade

agreement

Canada

- Access to the single European market with very low

tariffs. In general, goods are the least affected, but

services have limited access.

- Rules of origin and customs costs, with border

controls to verify conformity with community

regulations.

- Trade in financial services: prudentially, under a

third country regime. No automatic establishment of

banks.

- Possible movement of workers, not completely

restricted.

World Trade

Organization

(WTO)

- Most Favoured Nation tariffs and GATS fees for

services.

- Rules of origin and customs costs.

- Enforcement of the set of EU regulations and

standards verified at the border.

- Trade in financial services under third country

regime.

- No provisions for the movement of workers.

Source: Vega, 2019:12 y 17; author’s own list.

With such an example of flexibility, it is hoped that the UK can find a tailor-made fit in

its future relationship with the EU, but this is not being easy or fast. Of course, the future

agreement governing trade relations between the EU and the United Kingdom does not

necessarily have to conform to one of the formulas described above and it is likely that,

as was the case with Switzerland at the time, a custom fit is defined for this specific case.

GATS: General Agreement on Trade in Services (1995).

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Switzerland’s situation (European Commission, 2019) is truly special, insofar as after

rejecting its accession to the EU in 1992 in a referendum, the Swiss government tried to

seek the closest possible link with the European Economic Area (EEA), except in those

aspects that had provoked the rejection by the electorate. Consequently, the result of

this negotiation, conducted in two phases, was the signing of ten bilateral treaties that

regulate areas such as the free movement of people (Switzerland participates in the

Schengen Agreement), air and road traffic, agriculture, public procurement and science.

Switzerland contributes to the Community budget and is outside the Customs Union. It

has a cooperation agreement in the repression of fraudulent financial activities but its

banks do not have the right to establish themselves in the territory of the Union.

Undoubtedly, the touchstone of the future relationship lies in the UK's non-membership

of the Single European Market. After leaving the Union, it left the EEA at the same time,

which led to its withdrawal from the single market. Of course, it can join the EFTA and

participate in the EEA through it. But in such a case, it would have to adopt European

law, contribute to the Community budget and accept the jurisdiction of the Court of

Justice of the European Union. All of which would imply returning to square one, but in

worse conditions.

In any case, in view of the available options, the United Kingdom could achieve a status

similar to that countries such as Norway, Switzerland, Turkey or Canada now have:

outside the institutions and with a very limited capacity to influence the policy of Brussels.

It will be a third country in the face of a commercial bloc that, until now, has managed

to preserve its unity and its negotiating strength.

The British Government's aspiration is to reach a free trade agreement with the EU,

similar to the one established between the EU and Canada. This was stated at first by

the Government of Theresa May and has been confirmed by the Johnson Government, a

proposal that has not been rejected by the Union. Trade negotiations began in March

2020, after the withdrawal was complete, and have been particularly difficult. It is a

conventional international negotiation whereby each party tries to pursue interests that,

in principle, are not convergent. The EU has managed to overcome, to date, the inherent

difficulty of establishing a common negotiating position involving 27 states. These

circumstances, present in all trade agreements signed by the EU, are responsible for the

fact that the negotiating periods that have traditionally required this type of agreement

before reaching its conclusion were particularly long. In the case of the Global Economic

and Trade Agreement between the European Union and Canada, known as CETA

(Comprehensive Economic Trade Agreement), it lasted seven years, and did not enter

into force, provisionally, before 21 September 2017 (European Commission, 2017). It

would be a truly unusual fact if the agreement with the United Kingdom could be

concluded in just seven months, before the end of the transitional period.

The time pressure introduced in the negotiating process was a deliberate action by the

Johnson Government, by not requesting an extension of the transitional period. If the

objective pursued was to make Brussels' negotiating position more flexible in the face of

the threat of a “hard Brexit”, this negotiating strategy has not obtained the desired

results. The negotiation remains stalled at a number of critical points on which no

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agreement has been reached when there are barely a few weeks before the time limit

available to close an agreement runs out.

The points where the greatest divergences are concentrated are the content of the future

agreement on fisheries (the EU wants to maintain a situation as close to the current one

while the United Kingdom aspires to impose an annual negotiation on licenses and volume

of catches), regulatory harmonization (a common alignment of the respective regulations

that would make it possible to reduce border controls) and what is possibly the central

issue: the so-called level-playing field.

This expression refers to the preservation of fair competition under market conditions by

preventing the United Kingdom from carrying out a kind of dumping that harms the single

market. Brussels’ fear lies in the possibility that the British economy could transform

itself into a model based on low taxes and low regulation, lowering its environmental,

social or labour standards and authorizing public aid to companies, in order to make

unfair competition regarding European competitors.

Within the EU, companies cannot receive State aid so as not to distort competition, and

they have to comply with demanding social, labour and environmental standards and

maintain taxation in line with the rest of the European partners. Thus, the creation of an

enclave across the English Channel, like a new Hong Kong with access to the European

market, would break the domestic market.

The fear of this possibility was expressed by the EU in the Political Declaration on future

relations with the United Kingdom (Declaration, 2019), a non-legally binding political

document. It established the bases on which the future trade agreement would be

negotiated, committing to establish "an ambitious, broad and balanced economic

association" (point 17). This commitment is terribly difficult to materialize because it

affects the very foundation on which the Brexit legitimizing discourse has been built: the

recovery of lost sovereignty through full normative and regulatory capacity (O’Toole,

2020).

The conclusion of the trade negotiations has proven enormously difficult. It is not a

dispute raised in diplomatic terms that allows the best possible agreement to be reached,

satisfying both parties. Apart from its extraordinary technical complexity, the negotiation

faces two strategies that are non-negotiable for the parties: the preservation of the

internal market for the Union and the satisfaction of the expectations aroused during the

Brexit campaign among the British population. The promises made by the Brexiteers,

mostly false or impossible to fulfil, compromise not only the stability of the current

government but the future strategy that the United Kingdom intended to follow after its

withdrawal from the EU.

4. The uncertainty of Global Britain as a future strategy for the United

Kingdom

Although the hopes of reaching an agreement at the last moment have not been

extinguished, the feeling of disbelief in the political circles of Brussels and also among

senior British officials with respect to the negotiating position of the Johnson Government

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is perceptible (El Confidencial, 2020a). One last pirouette is expected, as happened in

September 2019, that will allow the commercial negotiation to be closed in extremis. And

for the same reasons, it is also feared that the British Government will subsequently fail

to comply with the agreed commitments.

The United Kingdom sometimes looks like a prisoner running away from the prison that

was holding him. The wish to achieve the desired freedom prevails over any other

consideration, although in the attempt, the reputation and good name of the country that

had been one of the most compliant European partners of EU law is tarnished (Mangas,

2020)

. Forty seven years locked up in the community “jail” may have made them

overestimate their own capacities and also idealize the outside world where they intend

to return to and which bears so little resemblance to that of half a century ago. In the

midst of the geopolitical struggle between the Chinese and the United States, along with

other lower-ranking powers, the possibilities of becoming an autonomous relevant actor

are certainly limited.

However, Boris Johnson is not daunted by the challenge. In his first speech as head of

government, he presented the idea of recovering the “natural and historical role” of the

United Kingdom as “an entrepreneur, who looks outwards and is truly global, generous

and committed to the world” (Johnson, 2019). This idea was invoked again by the

Secretary for Foreign Relations, Dominic Raab, before Parliament at the time the

withdrawal materialized (Raab, 2020). Thus, the narrative of a Global Britain that aspires

to pass on the image of the country as a world leader was retaken. This idea was originally

created as a slogan to counter fears that Brexit could lead the country to international

marginalization. Enunciated as a great political project by Theresa May, it constitutes a

kind of strategy to guide the British international image in the new stage that is beginning

(Glencross and McCourt, 2018). Still, its conception and enforcement raise serious

doubts.

One of the illusions that fuelled Brexit consisted of being able to free itself from the

restrictions that the EU imposed on the United Kingdom in its relations with third States,

which made it lose economic opportunities. Once the withdrawal is complete, the country

will regain the freedom to negotiate trade agreements with the entire world.

Indeed, since 1 February 2020, the United Kingdom has been able to negotiate and

conclude trade agreements with full autonomy, but the results achieved by its diplomatic

efforts have been limited. The structure of British foreign trade, as is common to all

Member States, is highly conditioned by its membership of the EU. 60% of its exchanges

were carried out through community channels (11% directly with the Union and 49%

through EU trade agreements). Due to its membership of the Union, the United Kingdom

was part of around 40 trade agreements signed by the EU with more than 70 countries.

Until the end of August 2020, British trade diplomacy had managed to transfer 19 of

these agreements, so that they could be used from 1 January 2021 (Table 2). Together

they represent 8% of the total volume of its exchanges (BBC, 2020b).

In 43 years (1973-2015), the UK was sued for breach of EU law before the Court of Justice 139 times. In

30 years (1986-2015) Spain was sued 244 times.

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Table 2.- United Kingdom trade agreements that will enter into force on January 1, 2021 (August 2020)

Source: BBCb, 2020.

There are still pending negotiating agreements with countries that currently do not have

trade agreements with the EU: the United States, Australia and New Zealand, among

others. London’s diplomatic efforts with such close political and cultural partners have so

far not borne fruit. The expectations aroused in the United Kingdom by belonging to a

shared past do not compare with the reality of a world market in fierce competition. As

New Zealand's Deputy Prime Minister Winston Peters has stated, “the United Kingdom

seems to be a bit rusty” and has forgotten to negotiate (El Confidencial, 2020b)

, which

does not necessarily imply that agreements cannot be reached in the next few months.

The greatest achievement attained by British diplomacy to date has been the signing of

a free trade agreement with Japan in September 2020 (El Confidencial, 2020c). The

agreement, which is basically a transposition of the existing one with the EU, although

London has insisted on highlighting that it goes further, represents 2% of British foreign

trade and is expected to have a positive impact on British GDP of 0.07%, in the long run.

As it could not be otherwise, trade alternatives to the EU, although feasible, are not

proving quick or easy to achieve for a diplomacy that has not faced negotiations of these

characteristics for decades. Due to proximity, market structure and integration between

“They have never had a test, so to speak. It's like entering Ashes [famous cricket competition between

England and Australia] when you haven't played for 30 years; It is the same thing that is happening now

to the United Kingdom”.

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the respective economies, the European internal market will continue to be, at least for

the next decade, an essential factor for British prosperity. The paradoxical consequence

of this reality is that only the signing of a trade agreement with the EU will be able to

offset the trade damages for the United Kingdom arising from Brexit (Brakman et all,

2018).

In the event that this agreement with the EU cannot finally be concluded within the

limited timeframe available, once the transitional period has expired, bilateral exchanges

will take place, as of 1 January 2021, in accordance with the basic rules established by

the World Trade Organization (WTO). This will imply applying tariffs to most of the British

exports to the continent (obviously, the United Kingdom could do the same for

Community products). It will also mean restoring merchandise controls at the border,

which will imply customs saturation and, predictably, an increase in the delay in supplies.

And the British service industry will also lose guaranteed access to the European market.

All this in a context of economic recession aggravated by the COVID-19 pandemic, which

has led to a historical drop in GDP of 20.4% in the second half of the year (The Guardian,

2020c).

The Government of Boris Johnson is trying to outline some guidelines to re-establish the

position of the United Kingdom on the board of global power, but the Global Britain

project will hardly be able to be the adequate strategy. In the first place, because it is

contradictory to the very social bases that supported Brexit. A project that aspires to full

integration in the globalization process collides head-on with the perception of threat that

many British citizens feel when facing this opening to the outside (Gaston, 2020).

Secondly, due to the lack of connection that underlies its conception with respect to the

current international context, the UK will hardly be able to regain the predominant

position occupied during its imperial past as a medium-sized economy in a world

dominated by great powers and trading blocs. The UK cannot hope to become a

commercial superpower on optimism alone (Saunders, 2019).

The material limits to aspirations embodied in the Global Britain project are easily

evidenced in practice. Faced with the pressure exerted by the Trump Administration, the

British government has not hesitated to join the US policy against China, limiting its

access to the domestic market by prohibiting investments in strategic sectors such as

the nuclear one or excluding Huawei from launching 5G in British territory (Sendagorta,

2020). While the fundamental British interest would lie in reaching a broad trade

agreement with China, its strategic autonomy is conditioned by the geopolitical influence

of the United States. In any case, the negotiating capacity of British diplomacy to

conclude a trade agreement favourable to its interests with a power like China remains

to be seen.

5. Provisional conclusions

Although the process is still ongoing and the level of uncertainty about its outcome is

considerable, some conclusions can be drawn on a provisional basis.

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The first one has to do with the integrity and survival of the European Union. The

confusion bordering on the chaos in which the UK has plunged will surely discourage any

further attempt to activate Article 50 of the Treaty on European Union by another Member

State. Still, while the British withdrawal does not trigger the dismantling of the Union,

this should not hide the evidence that the EU needs to rethink its integration model in

the face of the avalanche of challenges it faces. The functionalist path followed in the

European integration process since its inception has yielded all possible results. The

problems that we face exceed the partial technical decisions that can be made. The future

of the Union only seems assured by initiating a new federalizing path.

To the long list of difficulties that afflict us, the threats to security at our external borders,

geopolitical competition or the growing social and territorial dualization of the Union, it

cannot be ruled out that a new and unforeseen problem is added: the future relationship

with the UK. If the British withdrawal fails to satisfy the political and economic aspirations

of British society, it will be thrown into a crisis whose effects will undoubtedly affect the

Union. If, on the contrary, the Global Britain strategy succeeds in becoming a commercial

and financial node in the global economy, the EU will have to be extremely vigilant to

preserve the integrity of its internal market. It cannot be ruled out that the future

relationship with the United Kingdom may evolve through conflicting channels that will

make us direct competitors, if not rivals.

And finally, regardless of the commercial relationship that may be established between

British and European Community, the last great paradox of Brexit will occur, in any case:

to have started this traumatic, uncertain and divisive process to achieve an international,

political, and commercial position, which, in objective terms, will be indisputably worse

than at the starting point. It is ironic that the great hope that Brexiteers seem to embrace

is to turn the United Kingdom into an enclave in the style of what Hong Kong was during

its colonial era: an economy parasitic of a large market.

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