Today, Barnier and Davis held a joint press conference announcing that a transitional period, to last from the end of March 2019 until December 31, 2020, had been agreed by the two parties. However, as ever with these negotiations, it’s worth looking into the detail. There are days when that whole “Theresa May is a secret genius” thing seems more believable on than on others, and today it seems like she may have slipped the UK into a position in which soft Brexit becomes inevitable. Again, I have no idea if that was her intention, but if it always secretly was, she’s done it in a way few could have.
The text on Ireland essentially signs the UK up to either keeping Northern Ireland in an arrangement that amounts to Customs Union/Single Market membership in every practical way – or having the whole of the UK inside the CU and SM. Yes, nothing is agreed until everything is agreed, but the government have just announced that they’ve bagged a transitional arrangement to last 21 months and they would be in serious trouble with business if they rolled away from that one in a few months’ time. What this means is that either there is a customs border down the Irish Sea – which means the DUP brings down the government and we very likely have another general election in late 2018/early 2019 – or the UK stays in the CU and SM. These are now becoming unavoidable realities. The DUP can deny it, but that’s what the text of the agreement means in practice. The only other option is thinking the EU at some point do a complete about face and say, “You know what? The Zeppelins checking car registrations thing might work after all”, which simply isn’t going to happen. It’s NI stays in the CU and SM in some capacity, or it’s no deal. And no deal is increasingly unlikely for many reasons.
Will this all be enough to stop businesses fleeing the UK for the remainder of 2018? The government is banking on that to some degree. As always, a lot of today is just more cans being kicked down the road. Yet with Brexit, there’s only so much road in front of us.