Between a Rock and a Hard Place… The ‘Gibraltarian Backstop’

Between a Rock and a Hard Place… The ‘Gibraltarian Backstop’

Much of the Brexit negotiations have focussed on the ‘Irish Backstop’, but the situation in Gibraltar is equally complex and a ‘Gibraltarian Backstop’ seems to be the most likely outcome.

Before Brexit, Gibraltar was not an official EU member state but was indirectly a member of the EU under Art. 355 (3) of the Treaty on the Functioning of the European Union due to its status as a British Overseas Territory. Gibraltar had full access to the European single market, adhered to all EU treaties and legislation, and participated in European Parliament elections “as part of the South West England constituency”.

Post-Brexit, three issues make Gibraltar’s position particularly complex: the need to ensure Gibraltar’s economic security outside of the EU; the need to avoid a hard-border; and Spain’s ambiguity towards Gibraltar. This means that the ‘Gibraltar issue’ is unlikely to be resolved during the transition period.

Identity over Economic Security?

Gibraltar voted by an overwhelming 96% majority in favour of the UK staying in the European Union in the 2016 EU Membership Referendum. However, the Gibraltarians are staunch in their commitment to Britain. In 2002 they voted by a 99% majority against shared British-Spanish sovereignty over the rock. Gibraltar’s British identity has been forged ever-since the 1713 Treaty of Utrecht officially “assigned the territory to Britain”. What makes the 1970s Britain-style territory unique is that it is a British seaside town sitting on the gateway to the Mediterranean Sea. The Gibraltarians made it clear after the Brexit vote that they will not seek to stay in the EU “at any price”, showing that for Gibraltar, Britain comes first and Europe comes second.

Preserving Gibraltar’s ‘Britishness’ will come at the price of being forced to remain outside the single market, which is anticipated to severely hamper Gibraltar’s economy. As Dr. Peter Clegg indicates, Gibraltar is heavily dependent on the “shipping trade, and its online gaming industry”, both of which have grown exponentially as a result of Gibraltar’s access to the single market. Gibraltar’s access to the single market as a whole accounts for roughly 45% of Gibraltar’s international trade. Gibraltar has also received €5.7 millions in European Regional Development Funds as part of the Investment for Growth and Jobs programme 2014-2020. The only areas of Gibraltar’s economy which would be largely unaffected by Brexit is Gibraltar’s online gambling and insurance industries, “90% of which is focused on the UK”. After the transition period, Gibraltar is not guaranteed full access to the single market and therefore could potentially lose 45% of its economy’s clientele and vital funds that prop-up Gibraltar’s economy. Gibraltar’s loyalty to Britain suggests that the Gibraltarians may rather suffer customs duties and checks than guaranteed economic benefits.

Crisis at the Border

Around 28,500 people enter Gibraltar every day for work and tourism. The Gibraltar-Spain border is 1.8 kilometres-long and “has one narrow crossing point”. Should there be a hard Brexit, there would be border checks once the transition period ends. This could create enormous bottlenecks with potential delays of up-to six hours to cross the border. The future of Gibraltar’s economy rests on the continuation of the free movement of labour and an open-border because many people who work in Gibraltar would struggle to even enter the territory, let alone work and leave to return to their homes in Spain.

The potential border crisis would take life-long Gibraltarian citizens back to the time when the former Spanish dictator Francisco Franco closed the border from 1969 to 1985. As Keith Kahn-Harris reports, the border closure “didn’t just cause economic inconveniences and transport difficulties, it tore families apart”.

Despite the complicated situation of Gibraltar in relation to Brexit, the border between Northern Ireland and the Republic of Ireland has been a much more contentious issue during the negotiations than the Gibraltar-Spain border. This may be in part because the Irish land border stretches across 500 kilometres with 200 border crossing points, whereas the Gibraltar-Spain border only has one crossing point and would therefore be much easier to police.

The Chief Minister of Gibraltar, Fabian Picardo, has suggested that in order to avoid the potential border crisis, “it would be positive for Gibraltar to join the Schengen Area”. This would prevent a movement of labour crisis because no passport or border checks for people would be implemented. However, the UK government has ruled-out the possibility of Gibraltar joining Schengen because “the UK will be negotiating the future relationship with the EU on behalf of the whole UK family, including Gibraltar”.

The Spanish Agenda

The Spanish position is key to the resolution of the ‘Gibraltar issue’, especially as the EU has further complicated the situation by awarding Spain a veto on any future UK-EU agreements that apply to Gibraltar. However, Spain’s position on Gibraltar is becoming increasingly ambiguous. The Spanish Prime Minister Pedro Sanchez, in a surprising move, stated that it is in Spain’s best interests to keep an open-border with Gibraltar, enabling the free movement of people to continue across the border. This was surprising because many Spanish government officials are heavily in favour of using Brexit as an opportunity to make a renewed attempt at triggering the Treaty of Utrecht, which stipulates that Spain will automatically “reclaim Gibraltar should Britain ever relinquish sovereignty”. Therefore, conflicting views within the ‘Spanish camp’ may prevent the Spanish government from reaching a decision on its objectives concerning Gibraltar.

Last Resort or the Key to All Problems?

With much of the withdrawal negotiations focussing on the Irish problem, and since the negotiations on the future relationship have taken a ‘back-seat’ due to the global COVID-19 pandemic, Gibraltar has been a comparatively ‘neglected’ issue. This means that all possible options for Gibraltar have so far not been exhausted.

Due to the complexity of guaranteeing Gibraltar’s economic future outside of the EU while also avoiding a hard-border, an agreement in the form of a temporary ‘Gibraltarian Backstop’ appears to be the most likely outcome. A ‘Gibraltarian Backstop’ has not been formally proposed yet. However, Fabian Picardo has recently proposed an open border despite leaving the EU,  stating that “by working together, we can ensure smooth border flows for all interested parties”, which seems to suggest that a Gibraltarian Backstop is an acceptable outcome for the Gibraltarians. The UK government however is keeping its cards close to its chest.

A Gibraltarian Backstop would mean that Gibraltar essentially remains in the single market until an alternative agreement is reached in order to avoid a ‘hard-border’. This would avoid a sudden economic shock because Gibraltar would still have free and unrestricted access to the single market for the time being, and an open border with Spain. The specific details are up for negotiation but a possible route the UK government could take would be to negotiate a very similar agreement to that of Northern Ireland. Customs checks could take place in the Strait of Gibraltar (the Irish Sea in the case of the Northern Ireland Protocol).

There is always a possibility that Spain might demand “joint sovereignty over the Rock”. However, the Spanish government must come to terms with the fact that this option is simply non-negotiable.

The situation in Gibraltar is too complicated to be fully resolved during the transition period. This makes a temporary, ad-hoc agreement such as a ‘Gibraltarian Backstop’ increasingly likely. This could potentially be suitable for all parties because it would avoid a sudden economic crisis in Gibraltar, whilst allowing the UK, Spain and the EU more time to negotiate the best solution for Gibraltar.

This blog was written by Alfred Stronge as part of the module ‘Britain and Europe’, led by Pierre Bocquillon.

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