What the extension and probable election mean for Brexit

So Brexit won’t happen on October 31st after all?

It won’t. Despite all Boris Johnson’s “do or die” talk, the UK government applied for an extension and it was granted. So the new deadline is January 31st, 2020. For Ireland, the key immediate point is that the threat of a no-deal crash-out at the end of October has been avoided. This would have had huge economic costs for Ireland and would have forced the Government to put some checks at or near the Border.

And a no-deal Brexit is off the table?

Not completely. If the UK does not pass the withdrawal agreement by the end of January, then the threat would reappear. So a lot will depend on the forthcoming UK election, which now looks likely to happen in December. If Boris Johnson returns with a majority he could get the deal quickly passed. A hung parliament would raise questions.

The Irish Government will hope to get clarity soon after a UK election that the deal will pass, finally getting no-deal off the table and locking in the terms of the withdrawal agreement. Sources here say that the language from the Conservatives – now concentrating on getting the deal through – is already different from the previous no-deal threats.

That said, if the agreement isn’t through the Commons by the end of January, the EU’s reaction is uncertain. It also remains to be seen if the next prime minister will seek any changes from the EU before the deal is voted on again by parliament. The EU side’s position is that the agreement is now closed, though it did say that before, too.

Could Brexit happen earlier than January 31st?

Yes. If Johnson wins the election and gets the withdrawal agreement voted through parliament quickly, then under the agreement reached with the EU, the UK could leave on January 1st, 2020. The other option under the EU offer was to leave on December 1st, but assuming the election goes ahead – as now seems almost certain – that won’t happen. Johnson has said the Commons will not vote on it again before the election.

If the UK leaves with a deal, then it is largely immaterial to Ireland whether this happens on December 31st or January 31st, as the UK would enter a transition period during which not much would change in practical terms. This would last until the end of 2020, at least.

That doesn’t sound like very long?

It isn’t. The Conservatives have argued that a new trade deal with the EU could be completed by the end of 2020. Trade experts say this is impossible – and generally such deals take years to negotiate. The transition period can be extended, by one year or two. An issue in the election campaign will be how this should be dealt with, to avoid another deadline at the end of 2020.

For Ireland this is important. Were the UK to leave at the end of the transition period without a trade deal, World Trade Organisation tariffs would be likely to come into play, seriously affecting trade between Britain and Ireland and threatening jobs in the food sector. This impact would be similar to a “no-deal” Brexit – leaving without a withdrawal agreement.

But with the current withdrawal agreement in place the issues relating to the Border would not come into play in this version of a hard Brexit. Under the new agreement, the necessary checks should take place at ports as goods cross from Britain to the North. A lot has still to be worked out about how this would operate and doing this by the end of next year looks very difficult too.

Could the withdrawal agreement be re-opened (again) after the election?

The EU says no. Firmly. But who knows? Whether the new UK prime minister would want to do so is questionable. But whatever way the politics of this play out, a huge issue for Ireland will be the future shape of Brexit, to be fought over in the election.

The indications are that Johnson will campaign for a harder form of Brexit, while Labour would support remaining in the customs union, and the Liberal Democrats will seek a second referendum. For Ireland, it is as it has always been – the harder the Brexit, the worse for us. And the kind of hard Brexit envisaged by Johnson does raise the risk of significant barriers to trade with the UK in the long term and a noticeable economic cost for Ireland. A “ Breixteer” parliament would make this more likely. And the more the UK diverges from the EU, the greater the problem in managing the special arrangement for Northern Ireland, both practically and politically.

A closer future trade relationship would limit the economic damage significantly – both to the UK and Ireland – and lessen the challenge of the special arrangements in the latest version of the withdrawal deal.


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