CHEQUERS DEAL - A SUCCESS OR FAILURE?

By Alistair Law

As the negotiation period end date looms closer, the likelihood of a ‘no-deal Brexit’ was seeming to be ever more increasing. And so, in July, Theresa May declared her new vision for Brexit that was to be presented to the EU. It was a 3-page government statement that was issued after a cabinet meeting at the PM’s country residence. It was the first real idea of Brexit but had many controversies and even caused David Davis to quit as Brexit Secretary and Boris Johnson as Foreign Secretary.

The statement itself was fairly vague as the PM tried to juggle the support of the EU and her own party, Parliament and the DUP as well as her cabinet. The deal in itself contained various issues, that were varying in clarity and seemed almost ‘illusory rather than real’ as Mr. Davis said.

The deal mostly focussed on the trade of goods within the EU area. This is seen by the creation of a common rule book on the standards in goods to allow frictionless trade, but this would only cover goods, not services. Barnier said that this would simply allow UK firms to ‘undercut’ EU firms since services that were given to help produce the good, would not have to follow the same criteria, making the production cheaper, so then UK firms could then sell the product at the cheaper price than the rest of the market.

Other points were that Britain would be a separate legal jurisdiction, but the ECJ (European Court of Justice) would have the ultimate decision in changing the UK-EU goods rule book, while UK Parliament would have a veto and any changes, making us similar to Norway. It was also said the UK would have control over fishing waters, while maintaining a common agricultural policy alongside the EU’s agri-food rule book, and also control immigration by leaving the free-movement area but set up a ‘mobility framework’ for tourists, students and workers. This lack of clarity and conflicting issues creates a feel that May pushed for an ideal in terms of a Brexit deal, even though the chances of the EU accepting these issues were very low.

Other vague issues were customs and trade, where the UK wanted to control tariffs and have an independent trade policy, while staying in the EU customs territory and the idea of movement of services were ‘skirted over’. This lack of depth is what caused concern within May’s cabinet. And the EU response was anything but in agreement.

The EU negotiation team had already disagreed heavily on the idea of detaching goods from services whilst also disapproving of the idea of Britain controlling fishing waters. Furthermore, Barnier described the proposals as being ‘dead’ during a meeting with MPs and that the British proposal was not only a threat to the internal market but also the existence of the EU project. May’s previous Brexit Cabinet were also in disapproval with claims that the common rulebook would tie Britain to the EU without a say on future rules, rather than being a free-trading nation. Labour also declined the proposal, showing deep-scepticism about the so-called ‘facilitated customs arrangement systems’.

However, British negotiators hit back saying that the EU were being harsh without merit and were confused. Also there was support from Hans-Olaf Henkel, former head of IBM Europe and now an MEP in the same group as the Conservative party. He expressed that German business leaders to ‘speak up for their economic interests’ and ‘back May’s Chequers plan’. He said that a good deal for British industry will also help European industry. The EU said that they would not be entirely dismissive of the proposals, suggesting that the plan could be a template for an adapted version.

In conclusion, the proposed Brexit deal is an interesting topic that could either be a huge success in securing a British deal with the EU, or simply another attempt by May to try and bring together her party, the EU and the country. It has the possibility to be amended into a deal that satisfies both sides of the Channel, or could be shot down, leaving an almost impending doom of a no-deal Brexit scenario.

Personally, I think that the deal could potentially be very successful in that it has the possibility to do well. The ideas of having free trade of goods is good in that it keeps elements of the Single Market, and also having a template for movement of students, workers and tourists could prove to be beneficial for both the continent and the UK. However, if May is to make it a successful plan then issues like services need to be clarified and a definitive deal needs to be put in place in order to stop ambiguity and to help win back the trust and support of her party and electoral.