Lack of trust could scupper Brexit trade talks in 2018
No doubt a welcome relief for the beleaguered May, but the last thing the British prime minister needs is for EU leaders to be clapping her. In the eyes of the Euroskeptic backbenchers and the Brexiteers in her Cabinet, this is just evidence of surrender.
Those hoping for progress toward a deal between the EU and its departing member can dare to breathe a little easier. After endless rounds and plenty of angry exchanges, the EU27 finally agreed last week that enough progress has been made to initiate talks on the transition period and the future trading relationship. The exit bill of €40 to €45 billion was agreed, as well as terms on the rights for citizens living in the EU and Britain, but much was kicked down the road — not least the issue of Northern Ireland. Brexiteer anger was surprisingly muted, not least given the bill was higher than they demanded, and the European Court of Justice will still have a say over EU citizens’ rights in Britain for eight years. They know the deal favors a soft Brexit, not a hard one.
At least the divorce talks are over, the terms of separation agreed, so the dating game can commence. Celebrations will be brief. European Council President Donald Tusk was clear that “the second phase will be more difficult than the first.”
Back at home, in the words of former Primer Minister Tony Blair: “The whole country has been pulled into this Tory psychodrama over Europe. [Brexit] is a decision to relegate ourselves as a country. It’s like being a top-six Premier League football club, and deciding to play in the Championship from now on.”
May’s year ends on a rare positive note but rebels on both sides of her party have knives sharpened ahead of second round of EU negotiations.
May lost a vote in the House of Commons by 309 to 305, as 11 rebel Tory MPs insisted that Parliament should have a “meaningful vote” on any deal, which both sides hope to conclude by October 2018. These rebels had their faces splashed over the front pages of the right-wing press, many of them receiving death threats and being called traitors.
Tory Brexiteers are lining up their next fight over the two-year transition period from 2019 to 2021, when Britain will have to accept all the rules of the EU and be subject to the European Court of Justice.
A chief cheerleader for the Brexiteers is Jacob Rees-Mogg, an MP who looks like he might have just emerged from a Jane Austen novel. For him, Britain is on the verge of becoming, as he sees it, a “vassal state” to the EU.
The challenge is that the 2016 referendum only indicated narrow public support for separation. As yet, there is no consensus on just what the future relationship with the EU might look like. The EU has given the British government three months to lay out its position — but not only does the EU not know what the British government wants, neither does Parliament, let alone the British people.
The EU, by far the stronger party, does desire a deal but expects Britain to lay out its wishes first. It would be self-defeating to end up with a no-trade deal with the world’s sixth-largest economy.
The open warfare in the British Cabinet is between those who prioritize keeping as much of the access to the single European market as possible on the same basis, and those who put Britain being in total control first. Greater access to the single market means more concessions of control to the EU, akin to the Norwegian model. The other end of the spectrum is the Canada model, whose free trade agreement with the EU is seen as something to copy.
This is what Brexit Secretary David Davis craves; a Canada-plus agreement. The trouble is that Canada’s deal took seven years to negotiate and does not include financial services — a major component of the UK economy.
Davis has hardly impressed. He has rarely looked in charge of his brief, even claiming with remarkable insouciance that he “doesn’t have to be clever” to do his job. Maybe, but it might help. At times, it looked like May had sent a butcher to carry out open heart surgery. Top negotiators have a mastery of their brief, listen to their interlocutors, learn to see things from their perspective and possess bountiful supplies of patience. Davis was found wanting on all fronts, antagonizing his European counterparts, not least by claiming that the first-stage deal was just a statement of intent, not legally binding. In other times, he might have been dispatched to warm the backbenches, but May is too impotent to relegate one of her key henchmen.
Trust will be essential to making Brexit a success, a commodity Davis has not engendered. A deal may be signed, but without trust it could swiftly fall apart in the implementation.
The coming year will be just as fraught and tempestuous, if not more so. May is likely to survive, not least because both rebellious wings of her party acknowledge a leadership contest mid-talks risks catastrophe. Her big beasts in the Cabinet will still be tearing chunks out of each other and some may well fall in the fight. Those itching to reverse Brexit may still hold out faint hope, not least as opinion polls show 51 percent support for remain and 41 percent for leave at the moment. That will not be enough to shift Parliament to challenge the referendum vote, but if the remain support increases, who knows? The position of the opposition Labour party is not unlike the government’s — opaque at best, but perhaps telling in thwarting a hard Brexit.
A full trade agreement is highly unlikely to be negotiated in the narrowed timeframe, but perhaps a bare bones outline is a possibility. The issue of the status of Northern Ireland may be key in determining just how soft a Brexit it will be. But if Brexit talks are to be truly successful next year, let us hope that British and EU negotiators have learnt some lessons from a first phase that overran and was frequently bitter.
• Chris Doyle is director of the London-based Council for Arab-British Understanding (CAABU). He has worked with the council since 1993 after graduating with a first class honors degree in Arabic and Islamic Studies at Exeter University. He has organized and accompanied numerous British parliamentary delegations to Arab countries.
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