THE war of words between Nicola Sturgeon and Theresa May is hotting up over a “flexit” deal keeping Scotland in the EU’s single market. But if Scotland instead voted for independence in 2018, how easy might its EU path be? With difficult UK-Brexit negotiations under way, would Mrs May or Brussels even consider some sort of special EU status for Scotland?
In 2014, there was talk of a possible EU “holding pen” for Scotland, keeping it in the EU while it separated from the UK. But the 2018 scenario is different.The UK is expected to leave the EU by early 2019. So Scotland, after a Yes vote in a second independence referendum, might be in the UK and EU for a year, then in the UK outside the EU for six to 12 months (depending on separation talks), then independent outside the EU. This could be a bumpy, uncertain path as Scotland’s political, economic and trade status kept changing.
If UK-EU talks fail to agree a transition deal for 2019, while negotiating a bigger, Canada-style deal, the UK risks a “falling-off-the-cliff”, World-Trade-Organisation (WTO)-rules, scenario. Some in Brussels label this a dirty Brexit. A softer transition would keep almost full-single-market access but quite likely the UK would be outside the EU customs union; better but still complicated.
Without a “special status” deal, Scotland would be part of this “falling-off-the-cliff” or other UK scenario. Might the EU throw it a lifeline effectively keeping it part of the EU even though formally outside along with the UK?
There is no precedent for such a deal. Amidst the talk of “reverse Greenland”, the closest mirror image is East Germany in 1990, where two states (it and West Germany) became one overnight. But even this does not point to a solution for Scotland.
If the EU had the political will to smooth Scotland’s transition to membership, perhaps its lawyers could create an unprecedented “special status”. Scotland would probably still need to go through a fast-track accession, with negotiations over a few months, then two to three years for ratification; in a rosy scenario, becoming a full EU member state by early 2022. But if accession talks failed, Scotland’s EU “special status” would surely lapse too.
Would Westminster agree to special status? If Scotland is out of the UK by late 2019, perhaps it would see no reason to block it. But UK politics could be much tougher. If, by 2018, the UK-EU talks are in trouble with a “dirty Brexit” looming, and a toxic atmosphere hanging over the talks, it will be a bad moment to suggest UK-EU-Scotland special status talks.
And if the UK crashes down into WTO rules, disrupting supply chains (possibly even more chaotic if the UK doesn’t have its own WTO schedules), special status for Scotland may, legally, be seriously taxing too.
Timing will be crucial. A Yes vote in early 2018 would give time to consider options. One in December 2018, with the UK leaving the EU in early 2019, leaves no time at all.
If the UK-imposed a “sunrise” clause, refusing an independence referendum until 2019, this would create a political outcry and prolong Scotland’s transition even more. It would create a new catch-22: Scotland can have a referendum to be independent in the EU but not until the UK, including Scotland, had left the EU. There are more positive outcomes. If Scotland has a “flexit” deal or the UK has a single-market transition deal, Scotland might not need special status at least until independence, which would then be a Scotland-EU deal without the UK.
And if UK-EU talks remain cordial, a Scottish Yes vote in 2018 would mean Scottish views would surely have much more weight, especially in matters such as how to deal with the EU’s external land borders with the UK, given that the EU would anticipate having two such borders: Ireland-Northern Ireland and Scotland-England.
If Scotland is a full EU member state by early 2022, when the comprehensive EU-UK deal could still be under negotiation, it would have a veto on that deal. Uncertainty looms. A “dirty Brexit” in 2019 could create substantial economic damage for the UK, even after a 2018 Yes vote for independence. A softer UK-EU deal in 2019, and a special status deal for Scotland, could be positive all round. The path ahead is rocky but interesting.
Kirsty Hughes is Associate Fellow, Friends of Europe.
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