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Analysis

Is it Chequers? Is it Canada? No, it’s Chequada.

by Hugo Dixon | 06.10.2018

There’s a famous illusion called the “duckrabbit”. Its two long prongs can look like a duck’s beak with the curved surface like the back of its head. But the two prongs can also look like a rabbit’s ears with the curved surface like the animal’s face.

The emerging deal between UK and EU is a similar illusion. It can seem like Chequers 2.0, an even more miserable descendant of the prime minister’s dead Chequers proposal. Or it can seem like Canada+++, the sort of relationship with the EU that Brextremists like Boris Johnson want.

That’s the attraction of “Chequada”. Everybody can think they have got what they want.

But there is no such magic. Chequada would be bad for our power and our prosperity. It would also be bad for democracy, as it would deliberately attempt to keep the public in the dark for years about what Brexit really means.

Two-part deal

To understand the emerging Chequada deal – two EU sources have told Reuters that a deal is “very close” – remember that it will have two parts: the legally-binding withdrawal agreement – which, among other things, will contain the so-called Irish backstop, designed to keep the Irish border open whatever the circumstances; and the “political declaration” about our future relationship with the EU.

This week negotiations are expected to move forward on both fronts. The UK is going to put forward its proposals for the Irish backstop. Meanwhile, the EU will present the first draft of the political declaration, according to Bloomberg.

The UK’s backstop will have two main elements: the whole country would stay in the EU customs union until and unless some as-yet-to-be-invented technology is created that makes this unnecessary; and there would be regulatory checks in the Irish Sea to stop goods and agricultural products that don’t meet EU standards ending up in Northern Ireland and then entering the bloc by the open border with the Republic of Ireland.

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Political declaration

The EU’s draft political declaration was discussed by European Commission negotiators with EU ambassadors on Friday, according to Bloomberg. It will go beyond the deal that Canada has with the EU by including provisions to cooperate on counter-terrorism, foreign policy and defence. Although that sounds good, we will have much less power than now because we won’t be in the room when the decisions are taken.

What’s more, the declaration will propose “‘level playing field’ conditions to ensure the UK doesn’t gain a competitive advantage in areas such as regulatory standards, labor law and state aid.” Such rule-following isn’t part of Canada’s deal with the EU. It could even go beyond what the prime minister proposed in Chequers.

The language on trade will “probably run to fewer than 10 pages”, three diplomats told Bloomberg, and much of it will be vague. This means a proper trade deal, running into thousands of pages, would have to be nailed down after we’ve left when we would have even less negotiating power than we do now.

Why this is Chequada

If a two-part deal on these lines is reached, the theory is that the UK would stay in the single market as well as the customs union during a transition period that would last from next March until the end of 2020. The prime minister likes to pretend that the full trade deal would be finalised during that transition. It would have provisions that keep the Irish border open and, as a result, the backstop would never kick in.

All this is hopelessly optimistic. Negotiating such an elaborate trade deal would take much longer than 21 months. Not surprisingly, the EU is considering offering the UK a chance for a longer transition where we stay in both the single market and customs union, according to the FT.

What’s more, a deal based on Canada would not keep the Irish border open. So the backstop would kick in.

So look at that backstop again. It would keep the whole of the UK in the customs union for as far as the eye can see. Add that to the EU’s insistence that Canada++ will involve us following lots of its rules and the combination starts to look rather like Chequers 2.0 – but without trade that is fully frictionless.

Worst of all worlds

There is still a lot of negotiating to be done. One important issue is whether to put the provision for the UK to stay in the customs union in the legally-binding backstop or the vaguer declaration. May wants it in the backstop; but the EU wants it in the political document because it wants time to negotiate detailed “level playing field” conditions, according to the FT.

Still if the remaining difficulties can be overcome, such a deal would be bad for the UK for six reasons:

  • It would damage our power. We would end up following lots of EU rules, including on trade with the rest of the world, without a vote on them.
  • It would damage our prosperity. It would do little to protect our services industries, 80% of the economy. Since trade in goods wouldn’t be fully frictionless, it would harm our manufacturers too.
  • It could damage peace in Northern Ireland since unionists have said regulatory checks in the Irish Sea would cross their “blood red” line.
  • The EU would probably charge us a membership fee for every extra year of transition that we want – and maybe a lower, but still big fee after Chequada kicks in.
  • Political infighting over whether the ultimate deal was closer to Chequers or Canada would drag on. The continuing uncertainty would depress investment and the economy.
  • The public would be kept in the dark about what Brexit means until well after we have left.

If the prime minister brings backs such a “blindfold Brexit”, MPs must tell her to ask the people whether they want it. That’s why it’s important to get out and march in favour of People’s Vote on October 20 – and ask your friends to come too.

7 Responses to “Is it Chequers? Is it Canada? No, it’s Chequada.”

  • INFACTS needs to tread a careful line here. The people are fed up to the back teeth with all the Brexit shenanigans and they want it done and dusted. If the Remain camp (and Labour) shoot any and every deal down in flames with the ultimate goal of staying in the EU, we’ll end up with no deal and every finger will be pointed at them. The fact is that no negotiated deal will leave us as well off as we are now. Try explaining that to the extreme Leavers – it’s not possible, they are blind and deaf to what is usually called commonsense. I am a Remainer, I passionately want to remain part of the EU, which I believe is the best shield to have in this uncertain world. But failing that, this deal, with all its drawbacks, seems the next best thing. If we HAVE to leave, then let’s do so retaining as many as possible of the existing links with the EU. Either way, INFACTS needs to soft peddle their opposition to any efforts on the part of May to secure a deal. Don’t forget, Johnson and Mogg are waiting in the wings; horrors.

  • Well John, I half agree with your comments, but I’m not keen on soft-pedalling now. Frankly I can put up with the ire of frustrated Leavers as long as by hook or by crook we remain in the EU. Let’s face it, they never expected to win anyway, and the shenanigans, as you put it, have made it pretty clear to all the sensible Leavers that this was a bridge too far. I am now scared that following The Deal….whatever that turns out to be….our ex chums will gradually grind us further into the ground in economic warfare. Hunt did us no favours by insulting Brussels last week. They can easily get their revenge….they already own half the utilities and motor manufacturing, are building the next nuclear power station, and will probably stuff HS2 with Siemens trains and switchgear. Any deal which leaves us on our own is bad. France and Germany will laugh all the way to their banks.

  • None of the Brexit options anyone envisages are likely to win a vote in Parliament. Waiting for a peoples vote will cause mayhem before it can take place. The only option I can see is for a Parliamentarian to move a Motion on the basis that This House requests the Government to withdraw the invocation of Article 50 so that the country can remain in the EU. I am trying to get legal advice on the procedure and drafting.

  • At some point this will have to go to another referendum – by the beginning of next year the demographic factor will have swung the population definitely towards remain not counting the people who have thought better of leaving the EU. If being in some kind of Brino for the next two years stretches things out I am comfortable with that. I am still very uncomfortable with my EU citizenship being taken away on the basis of a referendum characterised by lies, illegality and no doubt dollops of Russian interference. I think that a new referendum on the deal (with the option to remain) would put this matter to rest and then in or out the country can focus on a radical overhaul of our democracy which is essentially at the root of the out vote.

  • I am bemused by the total lack of realism in the UK in relation to the EU’s stance. Seen from continental Europe, the English, as this does not as much apply to the Scots or the Irish, negotiate between themselves on the basis of their own premisses totally cut off from the actual offer determined by M. Barnier and his 60 strong contingent. For instance “Chequers” was an absolute non-starter and yet incredible time was wasted in the UK debating it. This also applies by and large to InFacts… Now, the question of the Irish border -to stop using that strange ‘backstop’ euphemism-, is pretty much aporetic. The proposals by the EU imply a border. This will remain unacceptable to the UK Government (not to the Irish Government). Therefore, the most likely outcome is that there will not be any deal and 2 ensuing scenarios: a no deal “Brexit” or no “Brexit”. It is time for all remainers of influence to start exercising it lobbying MPs towards a cross-bench coalition aimed at “merely” suspending Article 50 as is constitutionally possible. A second referendum -that would not be more constitutional than the first one- is a falsely good idea. We just need Parliament to be encouraged to exercise its prerogatives.

  • Tim,

    let me assure you another referendum will NOT put this issue to rest. If remain should win then why should leavers not then call for another referendum and so on & on & on…….
    it appears that many contributors on this site are from the legal profession???
    No wonder they want to stop Brexit as they may have to start answering to the plebs who at the moment have no real say.

  • Why will anyone be pointing fingers? The Brexiteers always said a deal would be easy to get and anyway no deal was better than a bad deal. So have they now retracted the position that was put forward during the referendum?