May had hosted a get-together at the end of last month at Chequers, the PM’s country residence, in an attempt to unite the warring Brexit factions of her government. Apparently, there was an agreement, which remained a tightly guarded secret. The Labour Party leader Jeremy Corbyn declared on Monday that Labour was in favor of “a” customs union with the EU. While his proposal lacked specifics, he is now directly opposed to the government and its mantra that Brexit means leaving the single market and the customs union.
Toward midweek the EU released its draft Brexit agreement, which suggested that, to allow the free flow of goods between Northern Ireland and the Irish Republic across the only UK-EU land border, Northern Ireland could stay in the customs union while the rest of the UK left. That created a monumental stir: Ireland is tricky, because of its decades of civil war. The Good Friday Agreement finally put an end to hostilities in 1998, and since then the North and the Republic have become economically ever more integrated. Therefore Brexit does not only endanger the stability achieved by the Good Friday Agreement, it also poses a serious threat to the Irish economy. The flip side of the equation is that no British government could tolerate a hard border in the Irish Sea between Northern Ireland and Britain. It would be seen by many as endangering the cohesion of the United Kingdom. Amid the furor, EU Council President Donald Tusk stopped by 10 Downing Street on Thursday for what must have been a rather tense visit.
To make matters worse for the beleaguered May, former prime ministers John Major and Tony Blair criticized her approach to Brexit as bungled and made the case that a second referendum would not necessarily be undemocratic.
The 10 days felt like several months of activity and controversy. Finally, it was Friday and the prime minister’s turn to take the stage. While her speech was surprisingly specific, it did contain some contradictions. May repeated that Brexit was about taking back control over borders, law and money, which has been her mantra for some time. She made it clear that any agreement with the EU “must respect the referendum [so much for Blair and Major], the agreement must be enduring, it must protect people’s jobs [nice sentiment, but one that looks increasingly unrealistic], it must be consistent with Britain as an outward-looking country and a democracy, and it must bring the country together again (which again is a nice sentiment more than anything else).
Theresa May’s landmark speech has brought some welcome clarity, but the EU and the UK need to engage with each other at the negotiating table rather than via public statements and press releases.
For the first time, May admitted that Britain needed to face some hard facts and that life outside the EU could not be the same as inside. She advocated an ambitious (“deep and comprehensive”) trade deal with the EU, in which some standards, particularly in the areas of security, medicines and social standards, would be maintained. For the first time, she conceded that the European Court of Justice would continue to “affect us,” without having jurisdiction. She also flagged the idea of an independent arbitration mechanism. The prime minister advocated associate membership of some EU agencies such as the European Chemicals Agency, the European Aviation Safety Agency and the European Medicines Agency. May insisted that whatever the eventual trade agreement with the EU, the UK needed to be able to freely enter into trade agreements and relationships with other countries. She continued to insist that neither the Canadian nor the Norwegian model would work for Britain. The Canadian model is not far reaching enough to her liking, because it expressly excludes services — important to Britain, not least because financial services and the City of London are such a huge part of its GDP. Norway is in her opinion too restrictive; it has unfettered access to EU markets, but Oslo is also a rule taker — which clashes with May’s aim to take back control over law.
May’s proposal looks a little like the relationship the EU has with Switzerland. However, Switzerland is in large parts a rule taker, like Norway. Its relationship with the EU has evolved over decades and is based on a multitude of agreements; most importantly, the EU has no interest in a similar set of agreements. Recent negotiations have shown the EU’s eagerness to chip away at its agreements with Switzerland, for a variety of reasons.
May’s speech sounded good and authoritative on the day. Her challenge now is to convince the hard-liners in her cabinet and her party that this is the way forward. As if this were not enough, EU representatives came out after the speech and accused May of cherrypicking. While it is to be expected that both Britain and the EU adopt tough stances during the negotiations, business will have to make decisions about how to position itself on Brexit. This affects employment in the UK. If the prime minister is serious about safeguarding jobs, her message should not be undermined by cabinet members or backbenchers. The UK can be successful at the negotiating table only if it can delineate a consistent position. It is also important that the EU and the UK engage with each other in negotiations rather than via speeches and press releases. The time has come to engage constructively on all fronts, because time is running out to reach an agreement. This is true for everyone involved in these negotiations. There is simply too much at stake.
— Cornelia Meyer is a business consultant, macro-economist and energy expert.