Ten months ago, I wrote a blog, posted here, describing how the EU and the Remain camp would try to reverse brexit by undermining business confidence and by delaying our exit through intractable negotiations. Since talks commenced, matters are proceeding much as expected. I was initially encouraged by May’s declaration that brexit means brexit but it is becomingly increasingly clear that the statement was meaningless and designed to provide political cover for prevarication. I’d like to say upfront that I really hope that the analysis in this blog is wrong. I really do, but for the life of me I can’t stop thinking that a great brexit betrayal is at hand.
The EU has laid down a staged approach to talks that guarantees that substantive issues on a future UK/EU relationship remain undiscussed. Instead they will only talk about exit issues and the purpose of this is threefold. First, staged talks ensure that politically difficult matters are discussed first. This allows them to highlight the costs of brexit in a way that feeds into campaign hyperbole by Continuity Remain. Second, they ensure that progress is slow by whittling away at the time remaining before the Article 50 deadline of March 2019 and the politically unpalatable prospect of leaving without a deal. Finally, and most importantly, the approach ensures that nothing substantive about our future relationship is discussed. This is important because brexit is about the future not the past. If matters are agreed about our future relationship then it lends legitimacy to the idea that brexit will inevitably occur. The subtext is that so long as nothing is agreed about the future then brexit might still be avoided. President Macron is already talking about a place for the UK in a reformed EU.
So if that is the EU strategy then what of May’s public statements including her recent speech in Florence? Some commentators have suggested that by verbally schmoozing the EU she is attempting to reach out directly to the member states and to by-pass the Commission and Barnier. In fact, she is playing their game. By focussing on what is effectively a standstill transitional arrangement she again avoids the substantive question of our future relationship. If you think about it, it is illogical to talk about a transition when you have not yet agreed the final destination. Importantly, she described the transition arrangement as being ‘under the same terms’ as at present with continued market access. Lets look more closely at that statement by examining how preferential trading could continue after March 2019 when according to Article 50 the UK must leave the EU.
I was very much struck by this article by consultant economist/trade expert, Derrick Wilkinson. In it, he explains that under WTO rules, the UK and EU could only legally continue to trade under preferential arrangements after brexit if the 2 sides had entered into a Free Trade Agreement beforehand. Importantly, he says that this has to be more than just a statement of intent, it has to be pretty much agreed in detail. Thus, under his analysis, the transition cannot legally be used to start talks about trade. It must be an implementation period for an agreement made in detail and before the March 2019 deadline. There is no sign whatsoever of the EU and UK attempting to write a FTA by March 2019 and by ‘conceding’ discussions on May’s requested transition arrangements without an end-state the EU will be able to spin out matters even longer. So what other options for trade exist? Well if it is to occur under preferential terms, and given that May has already discounted the Norway option, there is only one and that is continued membership of the EU by an agreed extension to Article 50 talks which would be just the start of endless delays, uncertainty and ultimately the great brexit betrayal.
I can hear some readers thinking, but what about “no deal is better than a bad deal”? Isn’t that evidence that May wants a FTA agreed by March 2019 or we’ll walk and trade under WTO rules and tariffs? It might have been a convincing threat 6 months ago but the amount of work needed to prepare our ports and customs’ systems for ‘no deal’ is immense and the moment to start making preparations for this has now passed.
In sum, I fear that the EU will continue to prevent the negotiations progressing to a stage when brexit agreements become irreversible and implementation inevitable. Theresa May either through choice or ineptitude has got the country into a position where the only choices available to us are a FULL trade deal (not going to happen), No deal (for which were not prepared) or continued EU membership by an extension to Article 50.
The electoral consequences for the Conservative Party of this situation will be grievous. And I for one won’t care.