The EU Withdrawal Agreement – how and why the UK government agreed the worst of all possible deals

The Withdrawal Agreement in which the UK has negotiated the terms of its exit from the EU is, according to Angela Merkel, a ‘diplomatic piece of art’. And so it looks from the perspective of most European capitals, given how favourable it is to the long-term interests of the EU. Viewed from the UK, however, it represents one of the most abject failures of statecraft in modern British history. This is the story of how and why it got to be so bad that it has achieved the remarkable feat of uniting both ends of the political spectrum against it.

As is now widely acknowledged across political party lines at Westminster, the EU Withdrawal Agreement, in the form that was endorsed by the Council of Ministers on 25 November 2018, amounts to a strikingly bad deal for the UK.

Less coherent than any other available option, it leaves all of the fundamental issues as to the future unresolved, while committing the UK in international law to processes and outcomes that ought to be unacceptable to any democratic nation state. It concedes most of the UK’s original bargaining positions in return for no permanent benefit, and creates a fatally weak basis for negotiations on a future trade deal. In consequence, its adverse political and economic effects are likely to be worse in the long term than the disruption of a ‘no deal’ Brexit would be in the short term.

Moreover, these defects are not the product of the usual give-and-take of negotiation – a tolerable compromise, acceptable to everyone because it fully satisfies no-one. Instead they are the outcome of a series of avoidable decisions, the most important of them made in No. 10 Downing Street by the Prime Minister personally. As a result, the Agreement represents one of the most abject failures of statecraft in modern British history.

The things that are wrong with this deal can be summarised in four main points. But to understand them, and the Agreement itself, it is important to describe briefly how the UK got itself into this mess.

A Brief History of Now

In the spring of 2017, Theresa May experienced a moment of profound hubris. As a new prime minister, briefly riding high in the opinion polls, she saw an opportunity to consolidate her position by triggering an early general election.

The election campaign – largely fought by the Conservative Party on the basis of May’s self-styled leadership qualities – was a disaster. May had overestimated herself, and she and her advisers badly underestimated her opponent. In consequence, after an election they had no need to fight, the Tories lost their working majority in Parliament, and have ever since had to be propped up as a minority administration by the MPs of Northern Ireland’s Democratic Unionist Party (DUP). It was a textbook case of political self-harm.

A Story of Brexit in Five Errors

But the truly consequential decision was one that was made shortly before the election. Wanting to shore up her right flank, May remained worried about the threat posed by the UK Independence Party. In early 2017, UKIP was already complaining loudly about the government’s delay in serving notice to quit the EU.

This too was a self-inflicted wound, of an earlier variety. David Cameron had promised that Article 50 would be invoked immediately after the referendum result – a promise he need not have given and, as the courts later found, had no authority to make. But it piled timing pressure on his successor. By the spring of 2017, the failure to serve the notice opened up the political class to the charge of being either reluctant to honour the vote to leave, or actively seeking to frustrate it. Unwilling to fight a campaign while exposed to this line of attack, the Prime Minister decided to issue the Article 50 notice shortly before calling the election.

Error 1

This was the first error, and it was catastrophic; an act of national self-sabotage carried out in pursuit of personal political gain. By serving the Article 50 notice when it did, the UK squandered its one procedural advantage – control over the timetable of Brexit. From that point on, a clock was steadily ticking towards a departure in March 2019 for which the country was always going to be ill-prepared. By this means, Theresa May ceded to the EU the upper hand, and guaranteed that the UK would be negotiating from a position of weakness.

As a result, instead of taking time prior to invoking Article 50 to have a national debate about what type of Brexit the UK wanted, and what trade-offs the country was prepared to make in order to get it, these domestic political arguments were obliged to take place concurrently with negotiations with the EU. That was never likely to end well. To make matters worse, at a time when every day needed to be put to productive use, the first three months of the two-year notice period were thrown away on electioneering and the business of forming a new government.

Error 2

The second error was one of pure naivety. At the beginning, May talked of wanting a ‘deep and special’ relationship with the EU, and appeared to think that it was possible to negotiate a long-term trade deal on that basis, self-selecting those aspects of membership that appeared most beneficial and transposing these into a third country deal. Politically this was never going to be the outcome.

The European ‘project’ is not a normal political enterprise. To its adherents it is closer to an article of faith, which the EU institutions have become highly efficient at defending against both internal and external heresies. May had little excuse for not understanding this. If she had not learned it from her own political experience, she could have found that it was well-documented by many others.

In the interests of preserving the European project, Brexit was always going to be viewed  by the EU as a threat. Even those nations which remained well-disposed towards the UK were not likely to believe that they owed it any favours, or to support it against the long-term interests of the club of which they remained members. And for the politicians and officials at the heart of the project, the EU’s interests would always be best served by the departure of the UK being – pour encourager les autres – exemplary in its difficulty. In the face of these obvious facts, May simply wasted time on wishful thinking.

Error 3

The third error flowed from the second. In pursuance of her unwarranted optimism about the EU’s willingness to conclude an agreement on terms favourable to the UK, May failed to instruct the British civil service to make adequate preparations for a failure to reach a deal. By doing so she violated the first and most basic principle of any business dealings – a negotiation ceases to be a negotiation the moment you become unable or unwilling to get up and walk out of the room.

For the UK to have any chance of reaching an acceptable deal, the EU had to understand that it was ready and able to leave without a deal. By visibly failing to make preparations for this outcome, the Prime Minister ceased negotiation and became a mere supplicant at the EU’s table. Inevitably, sensing this weakness, the EU pressed home the strength of its position.

Error 4

The fourth error was related to the second and third. The EU insisted that negotiations towards a long-term trade deal could not take place until after the UK has ceased to be a member, so that the terms of the Withdrawal Agreement must be limited only to matters related to the UK’s exit.

Legally, this was an absurdity. Indeed the final Withdrawal Agreement, which projects a trading relationship out into the (potentially indefinite) future, gives the lie to the notion that the Agreement could only be about the terms of exit. But as a procedural device it worked perfectly, requiring the UK to make concessions on matters about which the EU cares deeply (money), while necessitating no reciprocal concessions to the UK.

May passed on her opportunity to take the only sensible negotiating position, which was to reject this procedural bifurcation at the outset.

Error 5

The fifth error was the irrational and inconsistent approach that May took towards the UK’s negotiating ‘red lines’. Some were firmly expressed but then summarily abandoned, giving the impression of weakness and pliability. Others were held to rigidly, against all evidence as to their merits, and at considerable political cost.

The choices that the Prime Minister made between the red lines that were casually given up and those that were doggedly pursued are often difficult to explain. May’s personal obsession with immigration, sharpened by her years of failure to control it at the Home Office, made abandoning freedom of movement her one constant. However, by making the option of remaining in the single market impossible, this complicated the problem of Northern Ireland, and removed from the table a key element of one potential solution to that issue.

As a result, the UK has been treated to the surprising sight of a Conservative and Unionist prime minister – one, moreover, who is dependent on the votes of the DUP to remain in office – deciding to privilege immigration control over the constitutional integrity of the nation state. The complex and unpalatable provisions of the Withdrawal Agreement to which this approach gave rise have proven to be, in domestic politics, its fatal Achilles heel.

The Withdrawal Agreement

The resulting Withdrawal Agreement is a substantially one-sided document. Even on a first read, it plainly imposes many more, and more substantial, obligations on the UK than on the EU.

Angela Merkel called it a ‘diplomatic piece of art’, which reflects a certain satisfaction in European capitals as to the way it has turned out for the EU. Meanwhile the political fallout in the UK, where the Agreement has attracted cross-party condemnation from the two ends of the political spectrum, speaks clearly as to how poorly it serves the country’s own interests.

There are four broad reasons why its provisions have proven so unpalatable from a UK perspective.

1.  Rule Takers – The Transition Period

In public debate, the provisions for the so-called ‘transition period’ have been among the least controversial parts of the Agreement. But this neglect to focus on them should not mask the fact that they are deeply unattractive, and rendered necessary only because of the avoidable errors identified above. In essence, the transition period reflects the fact that, although the UK had total control over the timetable on which it left the EU, it has contrived to leave at a time when it is not ready.

During the transition period, the UK is required to act as if it remained a member of the EU, while losing all of the constitutional and institutional protections that come with EU membership. It becomes a rule-taker, being bound by EU law over which it no longer has any influence, vote or veto, and subject to the ultimate jurisdiction of a court on which it has no member. It cannot conclude new trade deals with third countries. And while it maintains the ‘frictionless’ trade arrangements it currently has with other member states – which is the government’s purpose in agreeing to it – it must pay for this privilege as if it had never left the EU, through a £16 billion contribution to the EU budget.

In principle, during this period, the UK continues to benefit from various trade and other international agreements between the EU and third countries. This is asserted as fact in the Withdrawal Agreement. However, the assertion is of questionable legal status. Third countries may have a different perspective on whether their trade agreements extend to non-EU members without further dialogue with them.

The transition period expires at the end of 2020, but it is extendable, if both sides agree, by up to two more years. Since almost everyone thinks that the initial period is too short to reach a new trade arrangement which will replace the transitional arrangements, an extension appears almost inevitable. Therefore an overall transition period of three or four years is likely.

The more time goes by, the more the UK will be subject to newly-developed EU laws over which it had no influence. And there is a financial cost of extension, in a duty to continue to pay towards the EU budget in an unspecified amount yet to be decided, but which will realistically be at least of the same magnitude as during the initial period.

2.  The Ungilded Cage – The Northern Ireland Backstop

When the transition period ends, if a new trade agreement has still not been reached, the UK will default into what is generally referred to as the ‘backstop’.

In simple terms, this means that Northern Ireland will continue to operate under legal arrangements that look very similar to those of the transition period, while Great Britain will devolve into a different and looser relationship with the EU.

The underlying purpose of this is to avoid a ‘hard border’ within the island of Ireland by maintaining free trade, and for that purpose broad regulatory alignment, between north and south. Northern Ireland will not be within the single market, but it will be part of the EU Customs Union, and is committed to comply with a set of EU single market provisions so extensive that it requires 75 pages of the Agreement just to list their titles.

Avoiding a hard border on the island is clearly desirable, and the UK committed itself to that goal at an early stage of negotiations with the EU. However, the argument that the absence of border infrastructure is a legal requirement under the Belfast (Good Friday) Agreement – often either stated or suggested in media coverage – is wide of the mark. No such duty exists, or can be implied, in the text of that Agreement.

What is clear within the Good Friday Agreement is that ‘Northern Ireland in its entirety remains part of the United Kingdom and shall not cease to be so without the consent of a majority of the people of Northern Ireland voting in a poll‘. And here the ‘solution’ posited by the Withdrawal Agreement runs into immediate difficulties by driving a legal wedge between Northern Ireland and the rest of the UK.

When, under an international agreement with a third party (the EU), the UK finds itself having to accept a legal obligation to use best endeavours to facilitate trade between Northern Ireland and Great Britain – two supposedly integral parts of its own territory – alarm bells should sound that something has gone seriously wrong.

The backstop breaches the constitutional integrity of the UK as a nation state. It is little surprise that this has been intolerable to the DUP, on whom the government’s majority in Parliament depends. By their own lights, and having regard to their electoral base, it is difficult to see how DUP members could have been expected to do anything other than oppose this part of the Agreement.

Moreover, in order to make the UK’s legal commitment even vaguely feasible, in terms of permitting largely frictionless trade between Great Britain and Northern Ireland, the whole of the UK will be required to remain within the same customs territory as the EU. And the price for that is that Great Britain is required to commit, in order to preserve a ‘level playing field’ with the EU, to maintain broad alignment with EU law on (among other things) taxation, state aid, competition law, environmental protection, labour law and social standards. Because it will remain in a single customs territory with the EU, the UK will be unable to conclude its own third party trade deals.

The backstop, in short, is a constitutional and legal mess. To compound the problem, it has no expiry period and cannot be exited unilaterally. This fact is clear from the text of the Agreement, and the government was forced to reveal that the Attorney-General also spelled it out in his advice to Cabinet. The backstop arrangements will persist, potentially indefinitely into the future, unless and until they are replaced by a subsequent trade deal (if any) reached between the UK and the EU.

More than any other part of the Agreement, this has proven toxic in domestic politics. The government’s weak attempts to neutralise the discontent, through a choreographed exchange of letters with the EU which insist that the backstop is a last resort that both sides will seek to avoid through the early agreement of a new trade deal, is meaningless. It has no bearing on the legal purpose or effect of the Agreement.

3.  The Anti-Democratic Time Bomb – The Joint Committee

Governance of the Withdrawal Agreement is to be carried out by a ‘Joint Committee’, co-chaired by an EU Commissioner and a UK government minister (or senior officials taking their place). It is the body responsible for the effective implementation and application of the Agreement.

At first glance, this is just an expression of the bureaucratic machinery necessary to give effect to the Agreement. All agreements of this nature require ongoing dialogue between the parties, and it is sensible to have an oversight body charged with making them work.

However, the Joint Committee will be, as the House of Lords EU Committee has observed, a ‘uniquely powerful and influential’ body. The scope of its decision-making remit is extremely broad, including the power – which subsists for four years after the end of the transition period – to amend the Agreement to deal with any ‘deficiencies’ or ‘situations unforeseen when this Agreement was signed’.

This authority for the Joint Committee to correct the Agreement and fill in its gaps is not a mere technicality, but is in effect a power to legislate. Moreover, since it extends across a period of six to eight years, and since it is not realistic to assume that the drafters of the Agreement will have anticipated all the issues likely to arise during that time, it is highly probable that there will be many cases in which this power can be exercised.

In addition, this is a superior form of bureaucratic legislation. Amendments made by the Committee have the same legal status as the rest of the Agreement, which in turn has the same legal status as EU law, which means that it has ‘supremacy’ over any laws that have been (or may in future be) passed by Parliament.

The Committee, according to the rules of procedure set out in the Agreement, conducts its business in private, and the default position is that its minutes and decisions are not published. There is currently no proposed mechanism for Parliamentary control of the UK representative.

If the UK and EU representatives on the Committee are unable to reach consensus, they can refer their dispute to arbitration, where it will be decided by arbitrators drawn from a list put together by both parties. If the dispute turns on a question as to the meaning of EU law, that question can be referred by the arbitrators for an authoritative ruling by the EU Court of Justice – a competent judicial body without doubt, but (problematically for a supposedly impartial court) one that is inextricably politically associated with one party to the Agreement.

None of this has made headlines in the debate about the Agreement. It appears too dull, a classic technocratic (which is to say non-democratic) solution of the sort beloved of the EU institutions. But if the Agreement is entered into, a great deal more will be heard about it, and it will become the source of significant controversy in the years ahead.

4.  The Meaningless Piece of Paper – The Political Declaration

The Withdrawal Agreement comes bundled together with a 26 page document known as the ‘Political Declaration Setting out the Framework for the Future Relationship between the EU and the UK’. In the words of Presidents Tusk and Juncker ‘these two documents, while being of different nature, are part of the same negotiated package‘.

Promises were made throughout the course of negotiations that the Political Declaration, when it emerged, would be both ‘detailed’ and ‘substantive’. In practice, it is neither. It was hastily cobbled together at the last minute, and consists only of polite meaningless words about future relations, together with a long shopping list of issues that will need to be addressed in trade negotiations. It is an ‘agreement to agree’ which, as even the most junior lawyer knows, has no legal status or value.

The Political Declaration is in fact useful as an indicator, but not in any way that reveals the Withdrawal Agreement in a good light. It indicates the complexity and importance of what remains to be worked out between the UK and the EU, the absence of any progress on those issues, and the likely challenge and length of the negotiations that lie ahead.

This leads to the most important criticism of the Withdrawal Agreement – one that even commands unanimity among the widely divergent members of the House of Commons Exiting the EU Committee – which is that the Agreement is merely an exercise in kicking the can down the road, resolving nothing of substance and leaving all the most difficult issues to be addressed another day.

In two years of consideration and negotiation, the UK seems no closer to answering the big questions posed by Brexit – how to reach a satisfactory resolution of the Northern Ireland issue, how to evaluate the inevitable trade-off between regulatory freedom and the benefits of the single market, to what extent to preference the right to conclude trade deals with third countries over the preservation of frictionless trade with Europe, and what financial or economic price is worth paying for what degree of greater sovereignty.

Most damningly of all, the Withdrawal Agreement worsens the UK’s already constrained negotiating position. It fritters away the UK’s main bargaining counter (money) without any guaranteed future benefit in return, and ensures that future negotiations will take place from a position of weakness, in which the UK needs a trade deal in order to extract itself from the undesirable position of being either a rule-taker or, worse, a captive in the ongoing prison of the backstop arrangement.


In the end, Theresa May has been obliged to sell her deal on the basis of what it is not. Her best arguments are that it is neither ‘no Brexit’ nor ‘no deal’. Of its positive virtues almost nothing has been heard.

The Withdrawal Agreement has its supporters, notably among business leaders who rightly see it as delivering short- and medium-term continuity, preferable in their view to leaving the EU without a deal for which many of their companies, like the government itself, are inadequately prepared. This indeed is the best that can be said of it.

But the very reason the Agreement produces continuity is that it resolves nothing, does little beyond buying time and, in the process, worsens the UK’s position for negotiating a future trade deal.

For these reasons, it is likely to be defeated in Parliament. Instead of drawing MPs from both the Remainer and Brexiteer extremes into the centre, Theresa May’s deal so poorly represents the collective UK interest that it has driven them away from the middle and towards their opposing political poles. This, ultimately may be its real legacy, with huge consequential effects that cannot be predicted.

Hubris always attracts nemesis. But in this case perhaps not only for May personally, but for the UK as a whole.


The Withdrawal Agreement

The Political Declaration

Correspondence from the UK to the EU, and the EU to the UK

The Report of the House of Commons Exiting the EU Committee

The Report of the House of Lords EU Committee