Mark Leonard
In December, negotiators from the European Union and the United Kingdom were able to conclude phase one of the Brexit negotiations by leaving key issues unresolved. But British leaders' apparent conviction that they can muddle through the Brexit process is setting up the UK for a rude awakening.
Last week, British Foreign Secretary Boris Johnson resuscitated an age-old proposal for a 22-mile bridge to be built across the English Channel. The irony has escaped no one. Johnson is calling for a fantasy bridge at the same time that he is destroying his island country’s only true bridge to the continent: the European Union.
Johnson’s bridge proposal shows yet again that the Brexiteers’ entire project is based on a permanent suspension of disbelief. In December, the European Commission played along, allowing Prime Minister Theresa May to pretend that she can reach three mutually contradictory goals concerning the United Kingdom’s departure from the EU.
The UK’s first goal is to maintain a soft border and frictionless trade with the Republic of Ireland, which will remain an EU member state, subject to the rules of the European single market and customs union. The second is to establish identical regulatory regimes throughout the United Kingdom, including in Northern Ireland. And the third is to “take back control,” by leaving the single market, customs union, and the jurisdiction of the European Court of Justice.
Reaching any two of these goals seems eminently possible. But no one has any idea how to achieve all three. Nevertheless, EU and UK negotiators are now proceeding to phase two of the Brexit process, raising the distinct possibility that they will continue to muddle through without ever resolving the phase-one trilemma. In fact, experts in the European Commission are already predicting that the next round of negotiations will lead to three agreements with the UK before October 2018.
The first would settle the terms of divorce. Despite the uncertainty regarding Northern Ireland, negotiators have started to converge on other key issues, including the size of the UK’s exit bill and the future rights of EU citizens in Britain, and of British citizens in the EU.
A second agreement would establish a “stand-still transition,” whereby the UK would retain the benefits of EU membership, but also the obligations, such as contributing to the EU budget, allowing for the free movement of people, and adhering to European court rulings. The big difference is that the UK will lose its voice at the table. For Britons in the “Remain” camp, such a transition will allow the UK to stay in the EU in all but name. And for some of those in the “Leave” camp, it is a way to exit without falling off a cliff edge.
The third agreement in phase two will center around a roadmap for UK-EU relations after 2021. This will not be a free-trade agreement, but rather a political declaration about where both sides hope to end up. Most likely, the resulting deal will envision a future trade arrangement modeled on the Canada-EU Comprehensive Economic and Trade Agreement (CETA), together with agreements on foreign policy, security, terrorism, and law enforcement.
But this raises the same concern as in phase one. If the UK government is never forced to explain its long-term plan in great detail, then it could continue to fudge its way forward. The problem is that once the stand-still transition begins, it will be impossible to avoid a reckoning between the different tribes of Remainers and Leavers in the British Parliament. And even if there were a long-term plan that would pass muster with British parliamentarians, it is fanciful to believe that it would also be acceptable to parliamentarians and voters on the other side of the channel.
At a time when anti-globalization sentiment is running high, the remaining EU member states are unlikely to sign off on any trade deal that could undercut their own social and fiscal wellbeing. After all, whereas all previous EU trade deals were designed to achieve convergence between the EU and a third party, an EU-UK deal would be geared toward preventing divergences. Michel Barnier, the EU’s lead Brexit negotiator, has been eloquent on this point. The big question is not whether Britain leaves the EU, he points out, but whether Britain will “still adhere to the European model” of regulation.
It was easy enough for politicians and activists in Europe to oppose the Transatlantic Trade and Investment Partnership (TTIP), a monumental deal intended to defend Western trade standards in an increasingly multipolar world. But consider how much easier it will be to campaign against a deal with the UK, given that key figures on both sides of the British political spectrum pose a threat to the European model. On the left, Labour Party leader Jeremy Corbyn seems to welcome a return to 1970s-style subsidies and state aid. And across the aisle, far-right Tories openly dream of establishing a low-tax, low-regulation “Singapore-upon-the-Thames.”
Unfortunately, given the current Brexit timetable, a failure to agree on a long-term deal could well come after the UK has already passed the point of no return. The UK, having formally exited the EU and given up any say in EU decisions, would still be subject to EU laws. Its choice, then, would be between the economic calamity of a no-deal Brexit or the political calamity of a never-ending transition that leaves it no say over EU decisions. In either case, the UK will hardly have taken back control.
That brings us back to Johnson’s bridge to nowhere, which is the perfect metaphor for the Brexit movement. Rather than fall for the false promise of fantasy construction projects, British parliamentarians would do well to force a real decision on the UK’s post-Brexit relationship with the EU, before it is too late.
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