The UK and the EU: It’s Complicated

  • Tommy Koh
  • Straits Times

  • 30 March 2019

In June 2016, 51.9 per cent of the British electorate voted in a referendum in favour of leaving the European Union (EU). On 28 March 2017, the British government officially informed the European Union of its wish to leave the union. Under EU law, the UK would leave the EU, two years later, on 29 March 2019.

However, on 14 March 2019, the British House of Commons voted to extend the deadline to 30 June 2019. Let me try explain this complicated story.

History
To understand this story, it is necessary to recall its history.

The British have always been ambivalent about its place in Europe. As early as 1930, Winston Churchill had envisaged the formation of a European Union. However, he said: ‘We are with Europe but not of it’. This ambivalence exists to this day.

Europe is a divisive issue in both the Conservative Party and the Labour Party. Some leaders of both parties, such as Conservative Edward Heath and Labour’s Roy Jenkins were pro-Europe. Other leaders, such as Margaret Thatcher were anti-Europe.

After the Second World War, some visionary leaders of Europe had a plan. They wanted to prevent the recurrence of war by integrating their economies. Six countries, namely, France, Germany, Italy, Netherlands, Belgium and Luxembourg, met in Rome, in 1957, to negotiate a treaty to establish the European Economic Community (EEC). They invited the UK to join them.

The British rejected the invitation, calling the Treaty of Rome, ‘irrelevant’.

British Applications
After losing its empire, the British economy declined rapidly.

For example, in 1950, the UK’s GDP per capita was 30 per cent higher than that of the EEC. By 1973, it was 10 per cent lower.

The British government therefore decided, for economic reasons, to join the EEC.

The UK applied in 1961 and, again, in 1963. On each occasion, France vetoed the applications. Why did the French President, Charles de Gaulle, oppose the British applications? He did so because he did not think the British shared the political objectives of the European integration project. He felt that the UK would be an obstructive partner or, worse, act as a US agent inside the EEC.

The British applied, for the third time in 1973, successfully this time. The then British Prime Minister Edward Heath, was a Europeanist. The new French President, Georges Pompidou, was his good friend and supported the application.

Two Referendums
Two years after the UK joined the EEC, the Conservative government was replaced by a Labour government. The new Prime Minister, Harold Wilson, decided to hold a referendum, in 1975, to let the British electorate decide, whether to remain in the EEC. At that time, 67.2 per cent voted to remain and only 32 per cent voted to leave.

In 2016, 41 years after the first referendum, the then-British Prime Minister, David Cameron decided to hold another referendum on the EU. The campaign was vicious. The leaders of the Remain camp waged their campaign based on the economic benefits of membership. They appealed to the heads of the electorate. The leaders of the Leave camp, waged their campaign on the emotional issues of sovereignty and immigration. They had the support of the tabloid newspapers.

They appealed to the hearts of the electorate. The British voted with their hearts. The result couldn’t be more different than the result of the first referendum. This time, 51.9 per cent voted to leave and 48.1 per cent voted to remain.

Divorce Proceedings
On 29 March 2017, the UK served the EU with the notice of withdrawal under Article 50 of the EU Treaty. The period for negotiations is two years. The negotiations began on 19 June 2017. The two sides have agreed on the text of the Withdrawal Agreement. The EU’s 27 members (which consists of all EU members except the UK) have accepted the agreement.

The withdrawal agreement has to be approved by the House of Commons. On 15 January 2019, the House rejected the agreement by 202 in favour and 432 against. On 12 March 2019, the House rejected a modified version of the agreement by 242 in favour and 391 against.

The ‘Backstop’
What is the reason for the double rejections of the agreement by the House of Commons? The sticking point is the border between the Republic of Ireland, which is a sovereign state, and Northern Ireland, a territory within Britain. The Republic of Ireland is a member of the EU.

When the UK leaves the EU, the border between the Republic of Ireland and Northern Ireland would become the border between the UK and the EU. Neither side wants a return to a hard border, with check points, custom posts, surveillance cameras at that border. They want goods and people to continue to flow freely across the border. However, the two sides have been unable to agree on how to do it.

As a temporary measure, the two sides have agreed on a ‘backstop’. Under the backstop, Northern Ireland would continue to adhere to EU rules on food safety and standards. 

The backstop would also create a temporary single customs territory. In other words, the UK will be in the EU customs union until they have agreed on a new post-Brexit, trade agreement.

Why did so many Members of Parliament vote against the agreement? The reason is that they feared that the UK would be tied to the EU indefinitely since there is no guarantee that the UK and EU will be able to agree on a post-Brexit trade agreement soon or ever.

The Timeline
On the 13th of March 2019, the House of Commons voted against leaving the EU without a withdrawal agreement. On the 14th of March 2019, the House decided to ask for a delay of three months. The new deadline is 30 June 2019. The EU’s 27 other members will have to agree, unanimously, to this request. 

On 21 March 2019, the EU Council of Ministers agreed to delay Brexit until 22 May if the House of Commons would vote in favour of the withdrawal agreement before the 29 of March. However, if the House rejects the agreement again then the UK will be out of the EU on 12 April 2019.

Options
Prime Minister Theresa May is faced with a few options. 

First, she asked the House of Commons to vote on the Withdrawal Agreement, for the third time.  Last night, MPs rejected her withdrawal agreement for the third time, by 344 votes to 286 – a majority of 58. 

Second, she can give in to the popular demand for a second referendum. But she may not have the backing of the House of Commons to do so. 

Third, she can ask the EU to stop the clock on her application to leave the EU. I suspect that this option would not be acceptable to the House of Commons. We are therefore faced with the grim prospect that the UK, will leave the EU on 12 April 2019, without any agreement.

The Future
What does it mean for the UK to leave the EU without any agreement? 

It means that the UK will no longer have duty-free access to the EU’s single market. It means that the UK will not benefit from all the free trade agreements which the EU has concluded with other countries, such as, the EU-Singapore Free Trade Agreement. It means uncertainty about the border between the Republic of Ireland and Northern Ireland.

The Brexiters are optimistic about the UK’s future. They believe that it will thrive and prosper. Some of them even think that the UK could be Singapore writ large, or be Singapore-on-the-Thames as it is called. 

The Remainers are pessimistic. They recall that the UK was declining economically until it joined the EEC in 1973. By joining the EU, the UK became part of a market of 500 million consumers.

We do not know what the future of UK will be post-Brexit. At this critical moment, I want to assure our British friends of our goodwill and support. We wish them well as they embark on a journey into unchartered waters.

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