For all the talk of Parliament’s inability to agree on anything related to Brexit, MPs are united in their dislike of the backstop – the mechanism designed to ensure that there will be no hard border in Northern Ireland, even if no formal deal can be concluded after the UK enters the transition phase. Of course, this is unpalatable to many MPs, as it raises the possibility of the UK remaining tied to the EU indefinitely in a state of quasi-dependency. Ergo the opposition to May’s Brexit deal.
However, a little-known international treaty known as the Vienna Convention could be about to come to the rescue of Prime Minister May. To give it its full title, The Vienna Convention on the Laws of Treaties is a treaty that sets out the international rules governing legal agreements between states. It entered into force on 27 January 1980 and has now been ratified by 116 states.
Under Article 62 of the treaty, states can withdraw from a treaty if there is “a fundamental change of circumstances” following the conclusion of said treaty “which was not foreseen by the parties”. Accordingly, on 12thMarch, Attorney General Geoffrey Cox, the UK’s chief lawyer, told Parliament that “the UK has no unilateral exit right to leave [the Transitional Arrangement}, unless there were a fundamental change of circumstance under Article 62 of the Vienna convention on the law of treaties”.
But – there always is a but when it comes to Brexit – legal bigwigs, including the Attorney General himself, have voiced scepticism regarding the applicability of Article 62 in this particular case. The chief stumbling block is that the triggering of the backstop would not be “unforeseen”. As such, in a move that no doubt helped lead to the second major defeat of Mrs May’s Brexit Bill, Mr Cox ruled that the legal risks of Britain remaining trapped in the backstop remained “unchanged”, notwithstanding Mrs May’s “assurances” from Brussels.
That said, there is talk from some quarters that Mr Cox could amend his advice to include the argument that Article 62 would allow the UK to unilaterally exit the backstop in the event of a “fundamental change in circumstances”. For example, let’s assume that the EU was deliberately frustrating negotiations regarding the future trading relationship between the UK and the EU. Under that scenario, it is arguable that a “fundamental change in circumstances” would have arisen; and as such, the UK would have just cause to walk away from the backstop unilaterally.
This is a highly controversial matter that relies very much on the interpretation of lawyers. With that in mind, it will be very difficult for MPs to vote for a deal on the basis of someone’s opinion and therefore the most likely outcome is that Mrs May’s deal is defeated – for a third time – next week. Once that happens, the UK Government will no doubt seek an extension of Article 50 in order to delay Brexit and buy more time.
In light of the current impasse, seeking an extension may seem like the logical thing to do. But the European Union is likely to only grant a long-term extension – say, around a year or more – because it is still in its interest to keep the UK within the EU. In the EU’s calculation, a longer extension makes it more likely that the UK would simply get bored with Brexit and abandon the idea altogether. Mrs May will be seeking a shorter extension, as the Government is now acutely aware that Brexit uncertainty is holding back the performance of the UK economy, and delaying Brexit even further will only serve to prolong the agony.
Nevertheless, the economy is holding up rather well, as the Chancellor outlined in his Spring Statement which was delivered to the House of Commons on Wednesday. Public borrowing – the deficit – is now at its lowest in almost two decades as the Exchequer enjoys bumper tax receipts on the back of strong growth in employment and wages. You wouldn’t have guessed it listening to the BBC, but the UK economy is actually growing faster than that of Germany, Europe’s powerhouse – despiteBrexit uncertainty.
In his speech on Wednesday, the Chancellor mentioned the prospect of a “Brexit dividend” which would accrue to the UK in the event of an orderly exit from the EU. I shall be revealing the extent of that potential dividend next week, but the biggest risk to the UK economy is not a no-deal Brexit (for which civil servants have been busily making preparations behind the scenes now for months), it is a long extension to Article 50 which would leave us trapped in no-man’s land and prolong the uncertainty facing businesses and consumers.