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A Zero Tariff Trading Relationship Removes the Need for ‘the Irish Backstop’

by John Brian Shannon

Q: Why do EU negotiators feel the need to have an Irish Backstop?

A: The simple answer is that the EU has one set of tariffs (a tariff regime that’s part of the EU’s Single Market) and it’s expected that the UK would enact their own tariff structure after Brexit (as part of the UK’s modern industrial strategy) that might conflict with the EU’s tariff structure.


In Business for the EU or the UK?

European Union leaders feel the UK should remain in the Single Market to make life easier for the EU by ensuring that all tariffs are duly collected and remitted to the proper EU department and once you consider the serious budgetary pressures of Brussels-based politicians it’s understandable why they feel that way.

The question though is; Should the UK give up some amount of sovereignty (the ability to sign its own trade deals) so that another country or bloc can ease their budgetary pressures? What kind of logic is that?

Keep in mind that the day after Brexit, the EU becomes a competitor trade bloc and why should the UK help their competitors? Do other countries do that for the EU? (No) For that matter, do other countries do that for the UK? (Also; No)

The simple answer, of course, is that no countries do that. Ever.

The exception is where countries have reciprocal free trade deals with each other.

In the NAFTA countries (NAFTA remains in force until USMCA supersedes it) those countries collect and remit tariffs, levies, and fees on behalf of the others all the time, and nobody thinks a thing about it because it’s just normal business. That’s what valued trading partners do for each other.

See the problem here? The UK and the EU need a reciprocal free trade deal to solve any remaining Brexit issues — and more importantly — to prevent future problems in the relationship.

The UK and the EU have taken each other for granted for so long, that both sides think that taking each other for granted should remain the default mode even after Brexit.

Which is completely unreasonable — and such liberty-taking will eventually result in messy, unpredictable, and ultimately, disastrous results for business on both sides.

Living in each other’s back pocket since 1973 has been fun, hasn’t it? (Depends upon whom you ask, but for a time there were benefits for both sides) But that part of the relationship has ended and it’s time to create an honest relationship, one based on mutual respect, formal lines of communication, and healthy self-interest.


A Zero Tariff Free Trade Agreement with Equivalence Standards Solves All Remaining Brexit & Future Relationship Issues

So get on it!

Waiting and hoping isn’t going to get the job done, nor is each side trying to out-bluff the other going to get the job done, as we’ve seen over the past 2 1/2 years. Someone needs to grab the bull by the horns now before the official Brexit date of March 29, 2019 and do what needs to be done.

Playing the eternal political blame game as each side waits for political support in the other country to collapse isn’t what clear vision and leadership excellence is all about.

So, instead of defaulting to the failed Us vs. Them problem solving modality of the 20th-century, today’s leaders must move boldly towards a Win-Win problem solving modality, especially between Europeans sharing a hemisphere and as fellow NATO allies. And there’s no excuse good enough to do otherwise.

When you begin with a clear vision and add great leadership to carry out that vision, the results can only be good. Europe’s people on both sides of the English Channel deserve that good/better/best future!

Three Quick Ways to Solve the Irish Backstop Issue

by John Brian Shannon

With less than 50-days until the official Brexit date of March 29, 2019, no Withdrawal Agreement exists to guide future relations between the UK and the EU.

Although no reference to a such a withdrawal agreement appeared on the 2016 referendum ballot it seemed appropriate that UK and EU governments should attempt to create such a legal document in order to facilitate a better future relationship.

Subsequently, the two governments agreed to create a ‘Withdrawal Agreement’ (WA) document and try to have it ratified by their respective houses of Parliament. And while the EU27 hasn’t tried to ratify the agreement, UK Prime Minister Theresa May offered it up for consideration in the House of Commons where it was voted down by a margin of 230 votes in one of the largest defeats in the history of the United Kingdom.

MP’s vote down EU withdrawal agreement in resounding defeat for Prime Minister Theresa May

The 585-page Withdrawal Agreement was diligently prepared by Theresa May and her Ministers and there’s no doubt that the EU side also worked ceaselessly to produce it, yet British MP’s were singularly unimpressed by the ‘backstop’ clause dealing with the Irish border. That particular section of the agreement is 175-pages long, plus 10-pages of addenda. Yikes!

In any event, all parties in the House of Commons voted it down handing in the worst defeat for a governing party in the House in 100-years, thereby stalling further progress on Brexit negotiations.

So, if you arrived here looking for the reason why no agreement exists to guide Brexit with less than 50-days until the official Brexit date, you’ve found it.

The Irish Backstop portion of the WA (185-pages in total) is solely responsible for the lack of a Withdrawal Agreement between the UK and the EU. But the remaining 400-pages would pass in the UK House of Commons in minutes — and would easily pass in all of the EU27 countries too. There’s simply no dispute in the WA, except for the portion that deals with ‘the Irish backstop’.


As ‘the Irish Backstop’ has Failed, What Alternatives Exist?

Until last week, everyone involved in Brexit negotiations was locked-on to the idea of getting the Withdrawal Agreement passed through the House of Commons and then getting it passed in the EU27 parliaments.

And now that it has failed so massively, we are compelled to seek other options and such options to resolve the Irish backstop issue are only limited by our creativity.

  1. The territory of Northern Ireland was created a couple of centuries ago when the ruling Monarch of Great Britain purchased the territory and it thenceforth became part of Great Britain. Therefore, Northern Ireland could be sold or granted to the Republic of Ireland by the owner of NI which would be today’s Monarch of the United Kingdom of Great Britain and Northern Ireland (thereby obviating the need for ‘the Irish Backstop’ and guaranteeing near-instant passage of the Withdrawal Agreement) who would only do so if a majority of Northern Ireland’s people expressed their wish to join with the Republic of Ireland. Which would make for an interesting Northern Ireland-only referendum question, wouldn’t it? Assuming The People of Northern Ireland voted to leave the United Kingdom of Great Britain and Northern Ireland, the ruling Monarch would be well advised to accede to their wishes and let them leave. One important caveat must be in place, namely, that any property and historical buildings, monuments, etc., would need to be disassembled and returned to Great Britain as they are the property of the UK and from a pragmatic standpoint I doubt that statues of Sir Winston Churchill etc., would remain standing for long in a Northern Ireland that would join with the Republic of Ireland. Even the Stormont building in NI could be removed ‘brick-by-brick’ and relocated to Great Britain. If Northern Irelanders voted to leave the Kingdom, no doubt some would want to relocate to Great Britain to maintain their UK citizenship and their relocation to the UK should be facilitated with greatest care, speed, and respect, should that particular set of events ever occur. However, if The People of Northern Ireland voted in a referendum to stay in the United Kingdom of Great Britain and Northern Ireland, the ruling UK Monarch and the UK government are obligated to accede to the wishes of Northern Irelanders and continue to support their full rights of UK citizenship and devolved governance in NI.
  2. Another way around the present impasse would be for all trade between Northern Ireland and the Republic of Ireland to be routed through Liverpool for customs and inspection — by air or ship — instead of having a so-called ‘Hard Border’ between the two Irelands. Items valued under £100. (or some other mutually agreed and arbitrary number) could be exempted so that shoppers crossing the border between ROI and NI by car could purchase small items, etc., without incurring any tax liability or having to pass through a hard border crossing. Unlike every other country in the world, a hard border just isn’t acceptable due to the decades of conflict caused by poor leadership and oversight in the UK and in the Republic of Ireland that led to a horrible, divisive, and toxic power vacuum which led and fed the conflict. Let’s hope that politicians, corporations, and royalty in the 21st-century don’t drop the ball like that again. Ever. And I hope that every one of them that dropped the ball are roasting in Hell to this very day, paying for the fecklessness that caused such misery to hundreds of thousands of people on the island of Eire.

    Northern Ireland backstop

    Less than 50 days to go until the official Brexit date of March 29, 2019 and still no solution to the Irish backstop issue. Assuming goodwill on both sides, a deal will be done.

  3. Another suggestion is for new technologies exist that could be used to track and collect tariffs/maintain safety certifications, etc. on goods sold between the Republic of Ireland and Northern Ireland, and between other EU countries and Northern Ireland, and between overseas countries and Northern Ireland — and I believe it’s possible. The amount of information that can be contained in one bar code (a simple bar code!) is astounding. All that needs happen is for each such item to be scanned by a bar code reader. I can only imagine what modern and more sophisticated technologies could accomplish. Perhaps cooperation between the UK and the EU on these new technologies would result in the same scale of technological revolution as the introduction of the bar code and both countries could lead the world in such technologies. Wouldn’t that be great?

In short, if UK and EU leaders want to find a way forward they will and if they don’t find a way forward it’s only because they don’t want success.

IMHO, there’s no reason that political power vacuums should be allowed to occur in the 21st-century. Such power vacuums have proved disastrous in the past. So, let’s decide now to choose that better path, whatever it may look like.

It isn’t the job of citizens, of corporations, of sports teams, nor of any other organization to solve the political problems between or within developed nations, it’s the remit of politicians to solve political problems, therefore, let’s go forward with those sentiments in mind and together, write a much better script for our respective peoples so that everyone gets to live in peace and prosperity.

Why Would British MP’s Approve an Incomplete Withdrawal Agreement?

by John Brian Shannon

The UK’s draft Withdrawal Agreement is a fine agreement except that it lacks in one key area; The so-called ‘backstop’ portion of the agreement which has no end-date. It’s a major flaw in the draft and it must be removed.

The backstop means that if the UK and the EU don’t reach a free trade deal in 2019 the UK will be stuck in the EU Customs Union forever, and will never be able to negotiate its own trade deals. And the opportunity to take back control of the UK’s trading relationships was one of four main reasons that Britons voted to Leave the European Union.

Remember the four metrics of Brexit success?

  1. Take back control of the UK’s borders and immigration
  2. Take back control of the UK legal system
  3. Take back control of the UK economy
  4. Take back control of UK trade

In the so-called ‘Political Declaration’ between the two parties there is reference to the backstop which states that it’s expected a free trade agreement will eventually be worked out between the two sides — neatly solving the problem of the backstop clause.

But as they’ve had 2 1/2 years to work these issues out and still haven’t (not even close) it doesn’t inspire a lot of confidence and voters on both sides of the English Channel are entitled to better service from their politicians than that. CEO’s must be wondering, too. Much of the EU’s trade is with the UK and 2 1/2 years later, no free trade agreement is in sight even though the UK is leaving the European Union on March 29, 2019. Very disappointing.

And Jean-Claude Juncker and Donald Tusk’s replacements can choose to be bound by, or not be bound by the non binding Political Declaration as both of those EU leaders step down after May 26, 2019 to make room for newly appointed EC and EU Presidents. We don’t know who those new leaders will be, nor do we know how they view the draft Withdrawal Agreement, nor do we know if they’ll give two hoots about what the non legally binding Political Declaration says. (If I were them, I wouldn’t either!)


How to Fix It

If the draft Withdrawal Agreement fails to pass in the House of Commons tomorrow (as expected) Britons can breathe a sigh of relief because almost certainly the backstop clause will be removed in time to get an amended Withdrawal Agreement passed in the House of Commons before Brexit day on March 29, 2019.

And one reason we can count on that is the EU operates a stunning £95 billion trade surplus with the UK (£67 billion net) and without a free trade agreement, businesses on both sides will suffer greatly. When there’s £95 billion on the line you can bet CEO’s will pressure their respective governments and a trade deal will happen quickly! Or heads will roll.

For goodness sake, it’s a trade agreement between two nations that have traded with each other for centuries! It’s not like the Klingons and the Romulans opening trade relations! How hard can it be?

The way to fix this situation is for British MP’s to vote down the draft Withdrawal Agreement tomorrow and encourage CEO’s on both sides of the Channel to put significant pressure on Theresa May, Jean-Claude Juncker and Donald Tusk until they get their jobs done properly which is what they should’ve been doing all along.

Doing their jobs properly — even if it’s already a year late and counting — means removing the backstop completely, or inserting a firm end date for Customs Union membership and getting a free trade deal done by July 1, 2019.

Any level of success lower than that should be considered unacceptable by citizens, by European industry, and by any country that trades with the UK or the EU.