What are the stakes for India? In a background of intense speculation on deal or no deal, there is no doubt that if May cannot push this final deal through Parliament, UK will leave without a deal. This will impact India-UK economic partnership, writes Amb. Bhaswati Mukherjee (retd.) for South Asia Monitor
By Bhaswati Mukherjee
A week is a long time in politics! For Brexit, within 48 hours, the deal was agreed upon by EU leaders and Prime Minister Theresa May and then rejected by the opposition Labour Party in Britain. Given May’s tenuous position and her promise to debate the deal now on in the House of Commons, the end of the week could well see its rejection and the end of May’s political career.
How did this happen? The Economist (February 2017) noted that “Brexit is May’s paradox”. The reason is that the liberal vision of a pro-Brexit future in which UK embraces free trade and lower taxes was strongly opposed by those who voted for Brexit, since the pro-Brexit camp also voted against free trade and globalisation. The Economist (March, 2017) underlined the difficulties in reconciling conflicting demands of a ‘hard’ versus a ‘soft’ Brexit.
Both the ‘leave’ and ‘remain’ voters support free trade and other advantages of EU membership but also favour tougher controls on migration from the EU. These differences divided both Conservatives and Labour and now threatens to split the ruling Conservative Party. There is no doubt that Brexit will mark a watershed in the history of so called ‘European unity’.
The complex issue of Gibraltar and its status after Brexit as well as the Irish border issue had cast a shadow over the complex and heated negotiations. Initially, Donald Tusk, President of the European Council, inserted in the draft Brexit guidelines a provision that any future trade deal with UK would apply to Gibraltar only if Madrid agreed. Spain has objected to British sovereignty over Gibraltar since it was conceded in the Treaty of Utrecht in 1713. May’s capitulation on this issue has been interpreted by her domestic adversaries as a national sellout.
Another potential major grievance which has not been discussed publicly is the 2003 Le Touquet Treaty with France that puts British border controls in Calais, France. If France withdraws from this treaty after Brexit, it would result in asylum seekers being sent through the Channel Tunnel to set up camp in Dover, UK instead of in Calais.
The deal, arrived at after 524 days of negotiations, must be put to the British and European Parliaments for ratification ahead of Britain’s withdrawal on 29 March 2019. There is a 585-page withdrawal agreement, which will form the basis of a legally binding treaty, and a 26-page political declaration on the future relationship. The second document, which is not legally binding, politically binds both sides to some basic parameters in future talks. This has been interpreted as impacting UK’s sovereignty. It appears that May has been outmanoeuvred on all major issues including citizen’s rights, the £39bn divorce deal and the issue of a soft border between Northern Ireland (in UK) and the Republic of Ireland after Brexit.
The deal safeguards rights of over three million EU citizens in Britain and over one million British nationals in EU countries to stay and continue their current activities where they have made their home. All those arriving to live in Britain at any point until the end of the transition period, which could last until the end of 2022 if extended, will enjoy the rights that EU nationals have today, to make Britain their home, to live, work and study.
The divorce costs are heavy. UK would need to pay £39bn to cover its contribution to the EU budget until 2020, and accumulated other outstanding commitments like pensions for EU officials. The most contentious issue is the so-called backstop, a contingency plan in case future trade talks fail on the Irish border issue. Brexit supporters are furious that it leaves UK within the EU but without a say on policy. May remains defiant insisting that Britain is not bound to a customs union.
What are the stakes for India? In a background of intense speculation on deal or no deal, there is no doubt that if May cannot push this final deal through Parliament, UK will leave without a deal. This will impact India-UK economic partnership.
With €19.4 billion of India-UK trade at stake, the large Indian diaspora and more than 400 Indian companies in Britain fear for their future in a country cast adrift in the world. A week is indeed a long time in politics.
(The author is a former Indian ambassador and author of the book “India and EU: An Insider’s View". She can be contacted at email@example.com)