Summary
Given the position adopted by Prime Minister Johnson, the consequent lack of progress in EU/UK discussions and UK government’s manoeuvres to side line the parliament, a no-deal Brexit now looks inevitable. Despite government claims of accelerated implementation of Brexit preparations, there is widespread scepticism that a sustained disruption of UK trade flows can be avoided. This carries implications for ACP exporters which now need to be urgently assessed and where possible addressed before the 31st October 20190. This will require action by both ACP exporters, in regard to reviewing how their export supply chains function and their vulnerabilities to a no-deal Brexit, and ACP governments in regard to the initiation of parallel dialogues with the EU and UK authorities on how to minimise disruption of the ACP exports trade with EU28 members under a no-deal outcome to the Brexit process.
On 28th August Prime Minister Johnson requested the Queen to prorogue Parliament (i.e. end the parliamentary session) in the first week of September. This would effectively suspend parliament for five weeks from early September, with Parliament only reconvening on 14th October 2019. Parliament would recommence with the presentation of the Queens speech, which sets out the governments’ forthcoming agenda for Parliamentary business (1).
Prime Minister Johnson claims the proroguing of Parliament is intended to allow the government to define its parliamentary agenda after the longest Parliamentary sitting in 400 years (some 340 days in total (1).
However the announcement followed on immediately from a ‘positive and constructive session’ between leaders of all opposition parties on 27th August, held to find a way forward in preventing a no-deal Brexit. The party leaders agreed in a joint statement on the ‘urgency to act together to find practical ways to prevent no deal, including the possibility of passing legislation and a vote of no confidence’ (2).
The aim of this legislative measure would be to compel Prime Minister Johnson to request a new extension for the article 50 process and if the Prime Minister refused to pursue such a course of action or the EU declined to accept such an extension, request Parliamentary endorsement of a revocation of Article 50. It was the most favoured option since it securing its successful adoption would not require Conservative MPs to ‘vote their own government out of office’ (2).
The prorogation of Parliament announced by Prime Minister Johnson would effectively short circuit this envisaged parliamentary initiative by allowing parliament to meet for only a few days in early September and then for just over two weeks at the end of October, before the UK’s scheduled date of departure from the EU.
This government manoeuvre has caused Parliamentary outrage with it being seen as simply a device for preventing any Parliamentary initiative to block a no-deal Brexit on 31st October 2019.
While this could give rise to an motion of ‘no-confidence’ in the government being tabled in the 1st week of September, the question arises can sufficient Conservative MPs opposed to a no-deal Brexit be mobilised to vote against the government on a no-confidence motion, given these Conservative MP were singularly absent from the opposition leaders meeting on 27th August?
A further question also arises: namely whether in the context of a prorogation of Parliament there would be sufficient time to either form an alternative administration which enjoys majority support in Parliament or hold a general election, before the scheduled 31st October departure of the UK from the EU?
Against this background a no-deal Brexit is looking more likely, particularly given the lack of progress in EU/UK negotiations. It had been hoped face to face fringe meetings at the G7 Summit in Biarritz would facilitate progress. However it was reported ‘nothing really happened’, with both side simply reconfirming their well-established positions (3).
While the EU remains open to considering ‘any concrete proposals’ the UK may table which ‘are compatible with the withdrawal agreement’, to date no such proposals have been forthcoming from the UK government. Rather officials from Prime Minister Johnson’s office maintain there is s ‘still not a substantive openness to action’ on the EU side despite what is described as a ‘shift in rhetoric’ from EU leaders’ (3).
However as Chief Negotiator Barnier has pointed out in discussions with the UK Brexit Secretary, the EU stands ready to analyse and respond to any British proposals that are ‘realistic, operational and compatible’ with the principles set out in the EC’s negotiating mandate and embodied in the Withdrawal Agreement. This view was endorsed by EC President Juncker speaking on the fringes of the G7 meeting when he repeated his ‘willingness to work constructively with prime minister Johnson and to look at any concrete proposals he may have, as long as they are compatible with the withdrawal agreement’ (3). This has been the longstanding EU position and remains the position.
While discussions between EU and UK officials remain on-going, it is noteworthy that during discussions in Brussels Prime Minister Johnsons’ new EU advisor David Frost ‘admitted that even without the backstop there was no guarantee the withdrawal agreement would be backed by parliament’ (4). A view reinforced by subsequent statements by a number of Conservative Party ‘hard’ Brexiteers (5).
Against this background the EC believes it is only through a dramatic back-flip by Prime Minister Johnson that a no-deal Brexit can be avoided. This is seen as unlikely. The general consensus in the EU is thus that a no-deal Brexit is now most likely.
While the UK government has announced a multiplicity of new funding initiatives and claims no-deal planning is now central to government action across government (6), there is a generalised scepticism over the adequacy of the UK government’s actions and initiatives.
For example on 27th August 2019 the UK government announced a £10m Brexit fund for English ports, with a ceiling of £1m per marine gateway. However this Brexit Port Fund was dismissed by the British Ports Association (BPA), as ‘a tiny amount of money’ which ‘would not achieve anything significant in terms of Brexit preparedness in the event of no deal’. In addition given the time frame the BPA argues there simple ‘isn’t much time to apply and spend money’. Other senior executives at British ports have warned that ‘if business or the government is not prepared enough for customs declarations and food and animal health checks on the other side of the Channel, there could be chaos at the border’ (7) (for more details see companion epamonitoring.net article ‘Vet Shortages in UK Meat Sector Could Fuel Export Surges to ACP Countries and Delay Imports under a ‘No-Deal’ Brexit’, 15 August 2019).
The BPA also warned of potential risks across all UK ports arising from the lack of customs agents and government tax software systems. Authorities at the port of Portsmouth have expressed concerns over severe traffic congestion given plans to use nearby land as a lorry park had to be abandoned when the owner, the Ministry of Defence, refused to release the land for emergency no-deal Brexit use (7).
| Comment and Analysis The situation highlighted by the British Port Authorities and individual port managers potentially carries profound implications not only for ACP exporters serving the UK market via trading hubs and initial ports of landing in EU27 countries or attempting to serve markets in the Republic of Ireland via the EU, but also for all ACP exporters seeking to serve UK markets. A no-deal departure of the UK from the EU on the basis which is currently emerging will give rise to a range of practical trade administration and trade facilitation issues which simply didn’t exist when ACP exporters built up supply chains designed to serve all 28 EU markets within a single trade policy framework. The need for ACP governments and exporters to open up parallel discussions on these issues with both the EU27 and UK authorities has to be recognised and addressed, if disruptions to ACP exports to the UK and EU27 markets are to be minimised. The individual the trade administration and trade facilitation issues which need to be addressed do not constitute insurmountable obstacles to trade. However each of these individual issues needs to be addressed if ACP exporters are not to face trade disruptions which result in increased costs and lower net incomes. It is now a matter of some urgency for ACP governments and those ACP exporters which have not already done so, to prepare for the trade disruptions which a no-deal Brexit will inevitably give rise to. It will not be possible to prepare in advance to deal with all sources of trade disruption, cost increases and revenue losses, but there are steps which can be taken. The most basic of these include: · ensuring ACP governments have reconsolidated their current terms and conditions of access to the UK market before 31st October 2019, so as to avoid the financial losses arising from the inclusion of ‘delivered duty paid’ stipulations in contracts with UK supermarkets and wholesalers; · ensuring supply contracts set prices for goods delivered into UK ports of landing and not inland locations, given the potential for fuel shortage sin the UK arising form no-deal Brexit related disruptions; · ensuring existing triangular supply chains are reviewed, with where necessary this involving a move over to direct delivery to the UK or the use of UK north sea ports which avoid the worst transportation bottlenecks which will arise in the South East of England; · ensuring all basic trade administration documentation requirements are addressed before the 31st October (e.g. ensuring valid EORI numbers have been obtained for the trade envisaged and all associated BOI and BTO decisions are also in order); · obtaining Authorised Economic Operator status from the UK authorities, given the likely increased used of this scheme under the pressures generated by a no-deal Brexit (see companion epamonitoring.net article, ‘Can AEO Accreditation Help Assist ACP Exporters Using Triangular Supply Chains in Overcoming Potential Brexit Related Trade Disruptions?’, 29 July 2019); · initiate dialogues with Port authorities and clearing agents to ensure they have plans in place to deal with the shortage of customs agents and failures of government software systems, so as to minimise disruptions of ACP trade in goods directly onto the UK market; · ensure parallel discussions with the UK and EU27 authorities on trade administration and trade facilitation issues are launched to minimise disruptions to ACP exports to both the UK and EU27 markets as a result of a no-deal Brexit. |
Sources
(1) Guardian, ‘Boris Johnson asks Queen to suspend parliament’, 28 August 2019
https://www.theguardian.com/politics/2019/aug/28/chancellor-sajid-javid-fast-tracked-spending-review-fuels-talk-of-early-election
(2) Guardian, ‘Corbyn’s summit shows a no deal Brexit is avoidable if MPs put tribalism aside’, 27 August 2019
https://www.theguardian.com/commentisfree/2019/aug/27/corbyn-summit-no-deal-brexit-avoidable
(3) Guardian, ‘EU ready to look at ‘realistic’ backstop plans from Johnson’, 27 August 2019
https://www.theguardian.com/politics/2019/aug/27/eu-ready-look-at-realistic-irish-backstop-plans-boris-johnson-brexit
(4) Guardian, ‘G7 leaders wait nervously for Boris Johnson’s debut on the world stage, ‘18 August 2019
https://www.theguardian.com/world/2019/aug/18/g7-leaders-wait-nervously-for-boris-johnson-debut-biarrit
(5) Guardian, ‘No 10 optimistic over EU ‘shift’ but Ireland presses for backstop’, 27 August 2019
https://www.theguardian.com/politics/2019/aug/27/brexit-no-10-optimistic-over-eu-shift-but-ireland-presses-for-backstop
(6) Guardian, ‘UK less able to cope with hard Brexit than it was in spring, say officials’, 1 August 2019
https://www.theguardian.com/politics/2019/aug/01/uk-less-able-to-cope-with-hard-brexit-than-in-spring-say-officials
(7) Guardian, ‘Fresh £10m Brexit fund for English ports ‘tiny amount of money’, 27 August 2019
https://www.theguardian.com/politics/2019/aug/27/fresh-10m-brexit-fund-for-english-ports-tiny-amount-of-money