The Case for a Differentiated Brexit

Nikos Skoutaris | 13 December 2017

Flags of England, Wales, Scotland, Angus Wilson, CC-BY-NC-ND-2.0

Hours after the result of the Brexit referendum was announced, the First Minister of Scotland, Nicola Sturgeon, made clear that she intended to take ‘all possible steps’ in order to secure Scotland’s ‘continuing place in the EU and in the single market’. Some months later, the Scottish government released its blueprint on how Scotland could remain in the single market post-Brexit by participating in the European Economic Area.

In Northern Ireland, the collapse of the power-sharing arrangement has meant that there has been no Northern Ireland executive since the start of the year. But, in their post-referendum letter to the UK prime minister, the then first minister and deputy first minister highlighted the need to ensure that the Irish border does not become an impediment to the movement of goods, services and capital.

Clearly, the most straightforward way for both territories to remain in the single market would entail the whole UK opting to stay in the EU’s single market – the Norway model. In her Lancaster House speech, however, Theresa May ruled out such option. Her aim is for the UK to be out of the single market and the customs union once Brexit takes place.

Is there, despite this, any possible way for the two UK constituent nations that voted against Brexit to remain in the EU and/or the single market?

In a recently published paper, I have argued that the EU has the necessary legal mechanisms to accommodate their differing aspirations. The paper points to two pathways that could be used for Scotland and Northern Ireland to remain in the EU and/or the single market.

The first option involves Scottish independence and the unification of Ireland through democratic referendums. However, while Northern Ireland enjoys such a constitutional right, Scotland would have to reach an arrangement similar to the one that led to the 2014 independence referendum. From an EU point of view, it is interesting to point out that following the April European Council statement and last week’s Brexit joint report, it seems that a special clause regulating the possible future re-integration of Northern Ireland in the EU will be included in the withdrawal agreement.

Of course, secessions could lead to extreme polarisation. This is why the second option might offer a pathway to avoid such political developments. The remarkable flexibility of the EU legal order could allow both territories to remain in the EU single market (and the customs union) without seceding from the UK.

In order to do that, there are two possibilities. Both of them require the consent of the UK. The first would entail the amendment of the EU treaties to the extent that Union law would no longer apply to England and Wales but would fully apply to the other two constituent nations. This is called the ‘reverse Greenland’ scenario. Alternatively, the UK could sponsor the membership of those two regions in the EEA. In order to achieve that, the EFTA Convention and the EEA Agreement would have to be amended in order to allow the membership of sub-state entities. This might seem unrealistic, but the Faroe Islands (together with Denmark) have been exploring the possibility of joining EFTA since 2006.

Having said that, one has to admit that a differentiated Brexit may entail some (border) checks within the territory of the UK. In addition, a substantial constitutional amendment to devolution arrangements would have to take place in order for both regions to participate in the political and constitutional life of the EU or the European Economic Area.

David Davis has explicitly rejected the prospect of a differentiated Brexit with regard to Scotland. In the case of Northern Ireland, he has underlined that the Irish border solution cannot be at cost to the ‘constitutional and economic integrity of the UK.’ However, the EU-UK joint report that allowed moving on to the second phase of the Brexit negotiations has opened up the possibility for a differentiated Brexit.

The solution that was found suggests that the aim of the future negotiations would be to address the challenge of the Irish border through the overall EU-UK relationship. If the withdrawal agreement finds it impossible to provide for a frictionless, invisible border, then ‘specific solutions’ will apply to Northern Ireland. Finally, if the UK and the EU cannot agree on those ‘specific solutions’, then the UK will remain aligned to the rules of the single market and the customs union that ‘support’ the Good Friday Agreement, North-South cooperation and the all-island economy.

Realistically speaking, given that even the most advanced free trade agreement cannot eliminate customs controls, and that the UK has said that it does not want to remain aligned with the single market and the customs union after Brexit takes place, an invisible border could only be achieved if ‘specific solutions’ are agreed for Northern Ireland. In other words, Northern Ireland can potentially enjoy a differentiated special relationship with the EU even after Brexit takes place. Following the initial suggestion, before the joint report was agreed, that Northern Ireland would stay in regulatory alignment with the Republic of Ireland, political leaders in Scotland also asked to benefit from any special deal given to Northern Ireland to smooth access to the EU after Brexit.

Admittedly, such a differentiated Brexit could create tensions around economic integration with the rest of the UK. Having said that, one has to point out that the UK territorial constitution has already adopted a model of internal differentiation that goes as far as allowing Scotland and Northern Ireland even to have some fiscal powers. In particular, Northern Ireland has a unique constitutional status that is ‘accompanied by unusual multi-level governance: regional, north/south and British/Irish.’ So, a differentiated Brexit would follow, respect and protect a system of internal constitutional differentiation that already exists.

At the same time, it should be noted that there are a number of cases where different parts of a (member) state have different relationships with the EU. Arguably, those different parts are small territorial exceptions because of certain historical and political circumstances or even insularity. More importantly, in all those cases the relevant regions have opted out from areas of EU law, while Scotland and Northern Ireland would opt in to the Union legal order. However, they underline the fact that territorial differentiation is an integral characteristic of the EU legal order. Those differentiated arrangements respect and accommodate the specific needs created by the constitutional status of those areas and do not in any way question the sovereignty of the relevant states.

In that sense, a differentiated Brexit should be understood as a pragmatic solution to the specific circumstances of Scotland and Northern Ireland that could potentially prevent the break-up of the United Kingdom. At the end of the day, the raison d’être of the EU is to preserve the peace in Europe by offering a pragmatic framework where competing nationalisms can coexist peacefully.

Nikos SkoutarisNikos Skoutaris | Twitter

University of East Anglia

Dr Nikos Skoutaris is Lecturer in EU Law at the University of East Anglia. He has written extensively on Brexit and its effects on the UK territorial constitution. His latest paper discusses how Scotland and Northern Ireland could remain in the single market after Brexit.