Takeaway
Broad compromise with the Opposition is unlikely. According to participants of the roundtable, the Withdrawal Agreement deal suffered a historic defeat in the House of Commons. MPs are concerned about the backstop, the emergency mechanism to ensure there will be no hard border with Ireland, which is included in the Withdrawal Agreement. MPs voted for an amendment to say that the backstop should be changed. EU leaders, including EurCou president Donald Tusk, have voiced their support in favour of the Customs Union, which they think could find a majority in the HoC composed of parts of Conservatives and the Labour party. But MPs in the HoC have already voted against other amendments which could have led to this option. And Prime Minister May is seeking a sustainable majority based on her own party. Because a majority is required not merely for the Withdrawal Agreement ratification, but also for the scores of other Brexit-related legislation which needs to be passed as well. There is currently no majority in HoC for an extension of Art. 50 TFEU deadline of March 29. However such a scenario cannot be excluded.
British Parliament wants to change the backstop. The backstop disagreement disturbs the sequencing of the Brexit process because its solution hinges on the future relationship with the EU – which should not be properly discussed in the Withdrawal Agreement. According to the British government, there are three possible ways to break the deadlock. Two of them – putting a time limit on the backstop, or making it unilaterally revocable – have been repeatedly rejected by Brussels. The third option is to avoid erecting border infrastructure by using alternative arrangement, such as some kind of technological solutions. However, such a solution currently does not exist and is unlikely to appear soon. However, a specific regime of regulatory alignment on the island of Ireland cannot be excluded. A distinct Northern Irish regime is already in place for animal matters.
Financial services prepared for any contingency. Given the scale of interdependence between EU and UK financial markets (60-80 per cent of continental financial transactions take place via London and under common law), future planning is relatively advanced in this sector. Specific contingency plans have been developed to govern the relationship between the legal orders if a no-deal scenario materialises at the initiative of central banks and other relevant actors. These measures seek to ensure there is contract continuity, adding more security in a no-deal world. The crux of the problem post-Brexit will be cross-border mobility – the UK will be a third country not covered by the EU passport regime.
Transport and automotive industries among the most affected. Participants expressed their concern over the impact of a no-deal scenario on Polish businesses. Approximately 1,200 Polish trucks cross the British border every day, and even a five-minute delay caused by border controls will lead to higher costs. The automotive industry will also be hurt by border controls, which will disrupt supply chains and impact producers across the continent, including in Poland. Despite significant contingency preparations on both sides of the Channel, there is still no certainty on how border controls are going to work. As a result, hauliers will have little time to learn and adapt to the new procedures. The contingency plans of the EurCom aim to maximise flow while ensuring there is a symmetry of rights for everyone involved.
Brexit will influence the global order. Participants recalled that the future relationship between the UK and the EU should be forged in the context of shifting global powers and Europe’s struggle for relevance. A bespoke partnership, therefore, continues to be the most plausible scenario. A dramatic no-deal split would drive a wedge between the UK and the EU, where distrust and resentment are already on the rise on both sides of the Channel. The future relationship is contingent on the geopolitical vision of the EU’s place in a changing global order. A broader geopolitical approach should also determine the outcome of future regimes governing data exchange (including for security purposes) and access to the EU’s joint resources (such as the Galileo satellite systems).
* The round-table discussion ”Brexit – next steps for citizens and businesses” was organised by Polityka Insight in partnership with the Embassy of Great Britain and Northern Ireland, as part of Risks and Trends 2019 conference. It was moderated by Wawrzyniec Smoczyński, the founder of Polityka Insight. Participants included representatives of financial services and automotive industries, UK senior officials, Polish government representatives and public policy experts.
