Following the triggering of Article 50, the honeymoon period is over for Theresa May. Oliver Patel, Research Coordinator at the UCL European Institute, outlines the main challenges which the UK faces in the upcoming negotiations. He argues that securing a deal within the two period will be hard enough. Securing a deal which pleases everyone – or anyone at all – will be virtually impossible.
Theresa May has had an easy ride so far. Up until now, she has only had to worry about pleasing her core domestic audiences. Now that Article 50 has been triggered, however, reality will start to bite. The two-year road to Brexit is fraught with uncertainty, obstacles and challenges. Two stand out above all else. First, given the complexity of the task, two years is an extremely short length of time in which to negotiate and finalise the UK’s withdrawal. Second, getting a deal which satisfies everyone – the British public, the EU and its 27 member states – will be virtually impossible. Theresa May needs to negotiate with 27 other countries, each with their own interests and priorities, who arguably have the upper hand in the talks. Her task is an unenviable one.
Is two years enough?
The triggering of Article 50 marks the beginning of a two-year process in which the UK and the EU must negotiate and conclude a withdrawal agreement. From May onwards, after the European Council have agreed upon official negotiating guidelines, the negotiations can begin in earnest. If no deal is reached within two years, the UK leaves without an agreement (unless the EU unanimously decides to extend the negotiations). Two years is a remarkably short length of time in which to complete what is routinely described as the most complex task undertaken by the British government since WWII. EU leaders have made it clear that they want the negotiations to end in October 2018, to allow time for any withdrawal agreement to be reviewed and ratified. This means that the UK could have no more than 18 months to negotiate its exit.
This short timeframe makes the entire process particularly challenging. Sorting out the practical aspects of the divorce will be complex in the extreme. Resolving thorny issues such as the Irish border, the status of EU nationals in the UK and UK nationals in the EU, the future participation of the UK in EU regulatory bodies, and the financial liabilities which the UK owes the EU, will be highly time-consuming, not least due to the complexity and contestability of the issues involved.
Theresa May wants these practical aspects of the divorce to be be discussed in parallel with trade talks. She thinks that both the withdrawal agreement and the so-called ‘ambitious and comprehensive’ free trade agreement should be agreed upon within the two years. Michel Barnier, the Commission’s chief negotiator, takes a different view. He has repeatedly stated that the practicalities of the divorce must be negotiated and resolved before trade talks can begin. Indeed, the content and sequencing of the negotiations will likely be the first things that are negotiated. According to EU law experts Piet Eeckhout and Eleni Frantziou, there is no legal reason why the withdrawal agreement and trade agreement could not be negotiated in parallel and come under the same deal. However, there is also no legal obligation on the EU to do so.
Although it can’t be ruled out, Theresa May’s aim of securing a withdrawal agreement and trade agreement within two years looks extremely optimistic. On average, free trade agreements take 28 months to negotiate. EU deals, such as CETA, usually take much longer. (Greenland’s exit took roughly 3 years!) If the EU refuses to talk trade before practicalities, the UK might have little choice but to follow the EU’s lead. At this early stage, the UK will probably not be in a position to pull out trump cards or demand flexibility.
Assuming the negotiations are not derailed by eye watering demands of a €60bn bill to cover the UK’s liabilities, a more likely scenario is one in which both sides sign a withdrawal agreement in early 2019, containing transitional arrangements to cover a subsequent period in which a trade deal is agreed upon. Again, this is mere speculation. The most important thing to note is that it is highly uncertain what the content and sequencing of the negotiations will be, whether two years will be enough time, and whether the withdrawal agreement will be separate from the trade agreement.
The EU is in the driving seat
The biggest challenge facing the UK is neither the two year timeframe nor the complexity of the task, but the fact that the balance of power in the negotiations rests firmly with the EU. This is not to talk the UK down or suggest that it is incapable of negotiating a favourable deal, only to state that there are clear reasons why the outcome of the negotiations will depend, more than anything else, on what the EU is willing to offer. Article 50 was designed to disadvantage the withdrawing state, hence the two-year time limit. Also, although undesirable for both parties, a bad deal, or no deal – the so-called ‘cliff edge’ – would be far worse for the UK than the EU. Finally, an agreement will only be reached if it is approved by the European Parliament and a majority of the 27 member states. The UK and the EU are not equal partners in these negotiations and there is no reason to suppose that the EU and its member states will do anything but seek to protect and pursue their own interests.
Of course, much of this has been overlooked in UK public debates, with arguments like “they need us more than we need them” sounding somewhat detached from economic reality (44% of UK exports are to the EU compared with 8% of EU exports to the UK). It has also been played down by Theresa May, who constantly stresses that a good deal which maintains frictionless trade is in the interests of both parties. Although this may be true, the EU and its member states have many other competing interests. EU leaders, acutely aware of the populist threat, are likely to prioritise preserving the unity and integrity of the Union above all else.
Theresa May has done a good job of making it sound like negotiating with 27 other countries will be straightforward; unfortunately for her, this is unlikely to be the case. Leading Brexiteers also like to expunge any notion that securing a favourable deal will be difficult, arguing that the EU will prioritise its economic interests and seek barrierless trade, whilst simultaneously forgetting that that the UK is taking an economic gamble in the name of political aims. After all, the Brexit vote was largely driven by political aims such as controlling migration and ending the supremacy of the European Court of Justice. The EU and its member states will have their own political aims which may well override economic concerns.
Things have been easy for Theresa May up until now. Without a serious Labour Party in opposition, she has only had her party, the press and the public to think about. By and large, she has satisfied her core domestic audiences: the Tory constituency of middle England. Now that 27 other countries and the EU institutions have been thrown into the mix, reality will start to bite. Navigating the differing priorities, concerns and red lines of the 27 member states will be especially tough. To secure a good deal, the UK will have to make some concessions, or offer something in return. Could this be a liberal migration system for EU nationals or continued contributions to the EU budget, as David Davis has alluded to? Whatever it is, will it be viewed as acceptable by Brexit supporters and the right wing press? Any hint of the UK conceding to EU demands will surely be pounced upon by the press, which will do its best to whip the country into a Eurosceptic furor. What will Theresa May do then? In the end, finding a deal which satisfies everyone – or anyone at all – could prove impossible.
The next two years will be politically turbulent. The negotiations will be accompanied by a steady stream of leaks, media hyperbole and frenzy. For those who are not already suffering from it, Brexit fatigue will afflict a significant proportion of the population. Although most legal experts agree that the triggering of Article 50 can be revoked, this will only happen if there is a major shift in public opinion in the UK, which looks unlikely. As such, on 30 March 2019, for better or for worse, the UK will officially leave the EU.
Oliver Patel is a research coordinator at the UCL European Institute.
Note: The views expressed in this post are those of the author, and not of the UCL European Institute, nor of UCL.