UK withdrawal boosts Madrid’s involvement in Gibraltar

As the UK's exit from the EU wreaks havoc within the country's government and leaves the bloc fretting over whether a deal will even be possible, one member nation already believes it is benefitting from Brexit.

The negotiations have allowed Spain to make what it sees as crucial progress on the status of Gibraltar, the tiny territory on the southern tip of the Iberian Peninsula that belongs to the UK. Spain has long disputed sovereignty of the Rock, which has a population of around 30,000.

When Brexit talks began, Spain managed to ensure that any deal affecting Gibraltar would require its approval. Since then, Madrid and London have been holding negotiations in parallel to the main Brexit discussions on several issues, including Gibraltar's anomalous tax status, which has been irksome for Madrid, and tobacco, whose low prices in the territory make it attractive to smugglers.

The draft Brexit agreement includes a Gibraltar-specific protocol creating several working groups between Madrid and London, at least until the UK’s transition period ends in December 2020. The work of those groups will include cooperation on the environment and protecting the rights of the 10,000 Spanish workers who enter Gibraltar each day from the nearby area, where unemployment is high and economic opportunities relatively scarce.

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Smuggling

Although the withdrawal document does not lay out resolutions for the tax and tobacco issues, it does lay down guidelines encouraging Gibraltar to align itself with international standards regarding fraud and smuggling.

“In the context of the overall negotiations for the withdrawal agreement and everything related to the Irish border, the Gibraltar issue has been relatively straightforward,” said Salvador Llaudes, an analyst at the Real Elcano Institute.

The protocol contained within the Brexit accord, he said, “deals with the most important issues, in the short term, to protect the bilateral relationship between Spain and the UK, but also the day-to-day relationship between Gibraltar and the area of Spain immediately surrounding it”.

The shared management of Gibraltar airport, which had been seen as a Spanish objective, is not broached in the withdrawal agreement. Also, Spain has not used the leverage afforded by Brexit to advance its sovereignty claims over the Rock, which has been British since 1713.

El Mundo newspaper reported that Spain had “failed to capitalise on its unprecedented negotiating position”. However, the secretary of state for the EU, Marco Aguiriano, said that Spain plans to broach the issue of shared sovereignty in the longer term.

“If the first thing we say when we sit down at the table is that we want to put our flag on the Rock, then the meeting [with the British] will be very short,” he told reporters on Thursday.

“Of course we are going to propose [co-sovereignty], but not on the first day of negotiating the future relationship.”

Fears that Spain might use a British exit from the EU to boost its claim on Gibraltar helped sway voters in the territory in the 2016 Brexit referendum. With the Gibraltarian economy also heavily dependent on business with EU member states, 96 percent of the Rock’s residents voted to remain.