You may be bored with Brexit already, but the important stuff hasn't even begun yet

The negotiations have started, but they'll take years and in the meantime we're no closer to knowing what situation we'll be in when we leave the EU

Anand Menon
Monday 26 June 2017 13:42
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Anand Menon: The important stuff on Brexit hasn't even begun yet

One year on from the Brexit negotiation, and perhaps the weirdest thing, among many, many weird things, is that we still don’t really know what Brexit will look like. Sure, we know what the Prime Minister wants it to look like. And we know what plenty of other people (including the Labour Party) don’t want it to look like. But as to where we will actually end up, and what it will mean for the country, we have nothing.

There are many reasons for this. One is, of course, the state of our politics. Who knows whether Theresa May will still even be Prime Minister come the autumn, let alone how Brexit will fare over the next 18 months in our fractious and divided Parliament?

Above and beyond our own parlous state, however, the other reason for uncertainty is that Brexit will not simply be down to what we want, but will be the product of a negotiation with the EU. And herein lies the fundamental importance of the talks that kicked off in Brussels last Monday.

First, it’s worth pointing out that these are not the talks that we in the UK are particularly interested in. We’ve started negotiating what is popularly known as "the divorce": the terms by which we leave, settle all our outstanding liabilities, decide on the status of EU citizens here and UK citizens there, and so on.

Nicola Sturgeon: UK Government has no clear plan for Brexit negotiations

Don’t get me wrong. This all matters enormously. But what matters more to our government, and to our country’s future is the relationship we have with the EU after we leave. They are our biggest trading partner, so it is important that we try to make trade as easy as possible once we’re out.

There is one immediate problem here. The EU is insisting that we make decent progress on the divorce before they will start to talk about trade. If nothing else, this is a good way of trying to get us to make concessions on things like our outstanding financial liabilities and the rights of EU citizens here.

This won’t necessarily be easy, though. Talks on money are never easy, whether in a family, a government, or the EU. And when it comes to citizens, the EU is insisting that its court be able to have the final say as to whether their rights are being respected here in the UK. Unsurprisingly, this is not something that May and her colleagues are overly keen on.

But let’s assume that progress is made. And that, perhaps by the autumn, we have begun to talk trade. What then? Well, there are at least two things we should be concerned about.

The first is time. Under the terms of Article 50 – the EU’s rules for how a member state goes about leaving – negotiations can only last two years. So, at the end of March 2019, we will cease to be a member state. Now, this deadline can be moved, if the remaining member states agree unanimously to do so, which they may.

But most trade experts think it will take much, much longer than two years to sort out the kind of trade deal we want. So, we are in transition territory. Simply, this means that we negotiate a deal with the EU that, even once we’ve left, we carry on pretty much as now for two or three years, just to give us time to get long term arrangements in place.

But what those arrangements will be is itself hard to see. The best way to trade with the EU is how we do now, from within the Customs Union (avoiding border checks and tariffs) and the single market (which means other member states can’t invent ridiculous regulations to stop us trading there).

Now, the Prime Minister has made it clear she wants to leave both the customs union and the single market. Her political logic is clear: it is hardly respecting a vote to take back control, reduce immigration band control our own trade policy if we remain under the jurisdiction of the EU court, keep paying into the EU budget, continue to accept freedom of movement, and can’t sign our own trade deals (which the combination of single market and customs union membership would mean).

The problem is that this will significantly reduce our trade with the EU, which in turn might seriously damage our economy. The negotiations over a trade deal will attempt to find creative solutions to this dilemma. Maybe the PM will soften her position. Maybe some clever compromises can be found.

Ultimately, we do not know what will happen, and anyone willing to risk political predictions after the year we’ve had is either incredibly smart or incredibly silly. But what is clear is that these negotiations will really matter for the future of our country. So, I get that you may be bored with Brexit. But the important stuff hasn’t even started yet.

Anand Menon is director of The UK in a Changing Europe

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