Brexit: why negotiations need to start moving

By RORY MCCLAIN | September 14, 2017

hen Brexit negotiations began in June, they did not begin auspiciously. From the beginning, there was no agreement on whether the negotiations would be straightforward or convoluted.

Throughout negotiations thus far, the inability of British Prime Minister Theresa May’s Cabinet to decide on what kind of Brexit it wants and on what its future relationship with the EU is to be has consistently frustrated the EU’s negotiating team, led by Michel Barnier. By August, May had lost any semblance of unity with her ministers. The department not only freely leaked documents to the British press but also spoke openly about their opposition to May’s and her Cabinet’s positions on Brexit.

Working for the U.S. Chamber of Commerce as the European affairs intern this summer, I met both British and EU government officials and heads of international corporations. While those representing the British government attempted to put on a brave face and present a united front, nearly everyone else expressed either great anxiety or unnerving calmness.

It was, of course, the multinational businesses which were most anxious given their inability to plan their future investments. All were willing to accept severe restrictions on trade and worker visas as long as they knew about those new regulations far enough in advance.

EU officials, on the other hand, were more self-assured, somehow envisioning Brexit as a problem for the UK to solve alone, as an event which could have only negative consequences for the UK. This vision is far from the truth. Only the UK can decide what it wants, but both parties have to work together to decide what their future relationship will look like.

If one assumes that there is no turning back now, the UK essentially has to choose between its economy and its sovereignty, with the success of the former being inversely proportional to that of the latter.

This sovereignty-economy equation will undergrid the Cabinet’s decision between a hard and soft Brexit. The former favors sovereignty over economy, and the latter, economy over sovereignty.

While May’s Cabinet has been largely to blame for the lack of progress so far, having just started to release position papers in August on the three most important issues on which the UK and the EU must agree before discussing their future relationship, the EU’s insistence on this particular negotiating format has not helped either.

The EU has been unwavering in its stance that some key issues must be nearly solved before the EU and the UK can start talking about what their political and economic relationship will entail after the March 2019 deadline: the UK-Ireland border issue, the UK’s financial obligation to the EU and the question of EU citizens’ rights in the UK.

With respect to the first issue, the UK is in a difficult position. How can the UK develop a concrete position on the movement of people and goods across the Irish border if the EU refuses to speak about the new regulations which will govern these exchanges between the EU and the UK?

It is also a challenge for May’s Cabinet to decide what protections it is willing to guarantee EU citizens when the EU and the UK have not yet discussed either the extent of the European Court of Justice’s authority in the UK post-Brexit or their future economic relationship.

A navigation of the latter would determine whether the UK has to allow the free movement of people to and from the EU as it does now.

This hurdle may be overcome, however, if the European Parliament or Michel Barnier decides in October that enough progress has been made in the negotiations to begin discussing what the EU-UK post-Brexit relationship will look like. Unfortunately this seems unlikely, given the continuing dysfunctionality of May’s Cabinet, the inherent complexity of the divorce process and last week’s leak from the UK Home Office.  This leak revealed the government’s plans to cut down on immigration from the EU into the UK and restrict the ability of EU migrant works to bring family members to the UK after Brexit.

Popular backlash from this leaked immigration policy could force May and her Cabinet to reconsider their approach, and once again slow down the Brexit negotiations. Furthermore, after the last round of negotiations, Michel Barnier himself said, “At the current state of progress we are quite far from being... able to recommend to the European Council that it engage in discussions on the future relationship between the UK and EU.”

Unless the talks are extended — which is improbable — it becomes increasingly likely that the end of March 2019 will come and go with no divorce deal concluded. Neither the EU nor the UK want to see that happen.

Then it follows that May’s government will need to become much more unified in its Brexit approach at a minimum. Additionally, one side might have to make a unilateral concession, a show of good faith, in order to move the negotiations along. The least controversial issue to make this concession on would be the divorce bill since the UK is merely attempting to honor its future budgetary commitments rather than its debts to the EU.

Moreover, because the UK stands to lose far more if no agreement is reached by the deadline, it is in the UK’s best interest to agree to pay close to the €60 billion the EU has demanded, if only to ensure the UK’s future relationship with the EU does not act as a cautionary tale for other would-be exiters.

I know from personal experience that many businesses operating in the UK and EU, British and EU citizens and even British civil servants would be relieved to see these Brexit negotiations move forward.

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