“Brexternalities,” Article 50 and the UK’s grossly irresponsible attempt to export its own problems

The political deadlock which now afflicts British politics is one of the unintended consequences of the EU referendum held three years ago. Core aspects of the political system—the relationship between politicians and voters, the executive and parliament, and the unitary state and its sub-national components—have been put under immense strain as the repercussions of the vote to leave have reverberated through normal political life.

But as well as these internal domestic difficulties, there is another phenomenon—the “externalities” of Brexit. We all suspect that departure from Europe presents certain challenges beyond UK shores. But the language of “externalities” provides a novel and revealing way of thinking about how we ended up here, how the exit process was meant to work and how it has gone so badly wrong.

Externalities differ from unintended consequences. They may or may not be foreseeable, what counts instead is their effects. Most importantly, externalities produce an effect for others. They are often economic—such as contagion from the eurozone crisis—or environmental—as in the impact of the Chernobyl disaster on neighbouring countries.

A political externality occurs when those who do not participate in a decision-making process are affected by it. Referendums produce democratic externalities when their outcomes affect the lives of those outside the franchise and beyond the territory of the state conducting the plebiscite. In the context of Brexit, an externality is something that affects countries, citizens and businesses without their having had a vote or representation in the 2016 referendum, or the internal political process of implementing the result. These are “Brexternalities.”

That a key function of Article 50, the EU’s exit clause, is the management of externalities appears to have been almost entirely lost in the political debate about Brexit. As has the UK’s grossly irresponsible attempt to export its problems rather than face up to them itself.

It is true, of course, that Article 50 envisages that the choice to leave the Union—or indeed to remain a member—is a voluntary, unilateral choice. This is a point underscored by the December 2018 ruling of the Court of Justice on the UK’s unilateral right to revoke its Article 50 notification. EU law accepts that these choices are left to the member states, acting in accordance with whatever constitutional requirements are demanded by national law.

However, once a state notifies of its intention to leave the Union, the primary function of Article 50 is to manage the externalities of withdrawal through a negotiated and orderly departure. In doing so, the procedures that are adopted facilitate the representation of those voices and interests that were not directly represented in the withdrawal decision but which are, nonetheless, affected by such a decision.

Yet with the Article 50 process having produced outcomes—a Withdrawal Agreement and a Political Declaration on the future EU-UK relationship—that the domestic politics of the UK seems unable to accept, the UK is now facing the prospect of a no-deal Brexit.

Understandably much of the analysis of no-deal is on the likely impacts on UK citizens and businesses. But here again we must look at the externalities. For only looking at what a no-deal Brexit means internally has a skewing effect. For example, it gives rise to simplistic statements by one-time leadership hopeful Andrea Leadsom that in the event of no-deal, the UK could unilaterally put in place legal frameworks to replicate the reciprocal requirements of the Withdrawal Agreement, including in respect of citizens’ rights. When combined with recitations of the mantra of the “sovereignty of parliament,” there is a sense in which the management of Brexit is reduced to a purely domestic exercise, as if the constitutional and legislative machinery of the UK could wholly internalise the externalities of Brexit.

The most significant Brexternality that a no-deal departure would leave unresolved would be the problem of border controls on the island of Ireland. Precisely because the effect of Brexit on Ireland was foreseeable, once Article 50 was triggered the EU prioritised work on the border issue, to facilitate the representation of affected interests in the negotiations. The Withdrawal Agreement—and its Protocol on Ireland/Northern Ireland—is the outcome of that process. Significantly, in requiring that alternative arrangements and subsequent agreements to replace the Northern Ireland “backstop” are overseen by a “Joint Committee,” the Withdrawal Agreement ensures a continuing commitment to managing the externalities of Brexit through processes that represent all affected interests.

Understood in this way, the objection to a UK unilateral exit provision from the backstop becomes crystal clear. It would negate the central purpose of Article 50 and the Withdrawal Agreement, namely to ensure that those interests located outside the UK can be represented and reflected in decision-making processes.

All of which needs to be kept in mind when we consider the interview that Tory leadership front-runner and potential future Prime Minister Boris Johnson gave to Laura Kuenssberg on the anniversary of the 2016 result. When pushed on the implications of a no-deal Brexit, Johnson proffered the seemingly innocuous view that the UK would not put in place border controls on the island of Ireland. Yet this leaves Ireland and the EU to manage the externality that the UK has created, and in doing so produces potential problems in securing the integrity of the single market.

This isn’t the worldview in which the UK internalises its externalities but instead one in which it simply washes its hands and carries on, regardless of the effects on those who were not direct participants in the referendum. The same might also be said of Johnson’s threat not to meet the UK’s accumulated financial liabilities during its period of EU membership and the implications that has for the budgetary contributions of other EU states. It is to avoid a withdrawing state from acting unilaterally and regardless of the externalities that its withdrawal generates, that Article 50 establishes a process of negotiation in which diverse interests can be represented.

Despite dealing with a highly exceptional situation, Article 50 is consistent with the mainstream operation of EU law. When we consider the system of cooperation that EU membership facilitates, it is often about managing the effects that would otherwise be generated by unilateral action by its member states. The discipline of membership is that it demands that others’ interests are represented in decision-making to avoid damaging externalities. This is hardwired into the EU operating system.

Casting our collective minds back to the renegotiation which preceded the referendum, one of the key demands made by David Cameron was for protection as a non-eurozone state from the externalities—political as well as economic—that could be generated by the collective actions of eurozone states. True, some of what was agreed was a demarcation of responsibilities, to insulate the UK from the potential effects of decisions made for the benefit of eurozone states. But, crucially, there was agreement on a mechanism by which non-eurozone states could refer matters of concern to the European Council, for discussion among eurozone and non-eurozone ministers. Problems would have been escalated to the Council and its consensus model of problem-solving among European leaders. In other words, an institutional mechanism would have existed for the representation of affected interests, whose underlying logic would be to seek solutions acceptable to all.

As the UK leaves the EU it is removing itself from these structures of cooperation and the discipline of EU membership. That is its right and its choice. But that leaves open how the externalities that Brexit generates ought to be managed. Any approach must facilitate the representation of affected interests, particularly when those interests lacked a voice or a vote in a referendum whose ramifications need to be managed.

Article 50 is the obvious means of managing Brexternalities. A no-deal Brexit puts no alternative mechanism in its place. It would result in the UK failing to take responsibility for a decision that was Made in Britain but whose repercussions spread beyond its borders.

In managing environmental externalities, the principle that “the polluter pays” is now well established. A new prime minister who would allow the UK to leave the EU in a disorderly fashion would be acting as a political and economic polluter. Brexit may have blown the lid off British politics, but that’s no reason to accept that the UK can simply dump toxic problems in its European backyard.

 

Kenneth Armstrong, professor of European law, Cambridge