There has been no formal statement by Theresa May’s government on when Article 50, which initiates the process for the UK leaving the EU, will be triggered. Gavin Barrett argues that although delaying the process will prolong market uncertainty, the new Prime Minister may be wise to hold off until early 2017 as once Article 50 is invoked much of the UK’s bargaining power will instantly evaporate.
Much like Tony Blair, David Cameron’s reputation will be permanently blighted by a single terrible miscalculation: in Cameron’s case, the reckless decision to instigate the UK’s disastrous Brexit referendum. The consequences of that vote have to date included a plummeting currency and property market, share price falls, a looming recession, uncertain economic prospects and renewed fears as to the future of the UK itself (not to mention exacerbating Eurozone banking sector difficulties).
Theresa May’s succession to the premiership involves some continuity from the Cameron regime. In May (as with Cameron), Britain gets a Conservative prime minister seemingly personally reconciled with full EU membership but penned in by a large minority of Eurosceptic Conservative MPs, now armed with a popular vote in favour of leaving the EU.
May’s premiership also involves new elements. On learning of her victory in the Conservative leadership contest, she set out her stall, acknowledging the need for UK unity and a positive vision for its future. She declared succinctly but significantly that “we are going to make a success of [Brexit]”; and (somewhat ominously-sounding) that “Brexit means Brexit”.
Theresa May’s call for unity is clearly desirable in a state shown by the Brexit referendum to be deeply divided along national and class lines. Scotland, seemingly unhappy about being outvoted on 23 June, is now pondering independence again – but this time equipped with an extra argument (the need to be represented in Europe). The large vote by lower-income voters for Brexit has been interpreted by many (including, it seems, May) as a cry of protest against years of Conservative-driven austerity and neglect. May’s solutions (including worker directors for companies) look distinctly modest, but might at least constitute some start in a better direction.
May’s promise to make a “success” of Brexit, in contrast, is unfulfillable, something she must know. One might as well promise to make a success of a train crash. Brexit cannot possibly work as well as membership of the EU. Locked outside of the corridors of power, Britain will inevitably lose influence, power, market access on optimal conditions and, ultimately, money. Knowledge that this would be so is presumably why May herself opposed Brexit in the referendum campaign.
May could more credibly – although less palatably – have promised to make the best of a bad lot. For the UK, a good result will be getting as close to a Norway-style deal as it can manage, thereby securing access to the EU’s single market – even if (as in Norway’s case), that would come at a hefty price, without decision-making power and without the right to impose any real restrictions on immigration.
View from a ridge between Segla and Hesten, Senja, Norway. Credits: Ximonic (Simo Räsänen) (CC BY-SA 4.0)
Theresa May’s most telling statement, however, has been that “Brexit means Brexit”. She has followed this up by asserting “there will be no attempts to remain inside the EU, there will be no attempts to rejoin it by the back door… As prime minister, I will make sure we leave the European Union.”
These are fateful words. The reality of the matter is that Britain’s political needs and economic prosperity would be best served by the UK doing exactly what Denmark, Ireland (twice), France and Holland have all done in their turn: perform a U-turn, somehow finding an adequately democratically respectable way to reverse a decision taken by referendum which is deeply damaging to the national interest.
In the case of Denmark and Ireland, this was done by holding a second referendum once changes or at least clarifications to the original Treaty proposal had been negotiated and/or they had been contextualised by moderating statutory and/or constitutional amendments.
In France and Holland’s case, it was done by newly-elected French and Dutch governments seeing to an effective redrafting of the Treaty in question to remove the aspects felt most objectionable, and then subjecting the new Treaty to a parliamentary vote. But desirable though a U-turn may be, the Conservative party is the wrong party to achieve it by either route.
An election victory for such a deeply divided party (even if likely, given Labour Party turmoil) would not provide a mandate (perhaps not even the parliamentary votes) for parliamentary rejection of Brexit. With such a divided party, Theresa May could probably not even campaign for such a prospect without causing a split. She has effectively now promised not to do so.
A second referendum – for example, on the outcome of Brexit negotiations might have been possible – but this now too seems to be ruled out by the May dictum that “Brexit means Brexit”. If she holds fast to these words, Britain is doomed to leave the EU – with Bremain and Brexit Conservative MPs alike combining Thelma-and-Louise-like to drive the UK off the Brexit cliff after a possible two-year negotiation phase. Thereafter Britain will take up a splendidly isolated if diplomatically emasculated and economically weaker position as Europe’s latest Norway – and that is a best-case scenario.
Theresa May has already indicated that (required) UK notification under Article 50 of the EU Treaty of an intention to leave may not be given until early 2017 at least. Although irritating for the 27 other member states, this may be wise from a UK standpoint. Once such notice is given, much of the UK’s bargaining power will instantly evaporate. The two-year Treaty deadline for negotiations will start running. If it expires, Britain could be left with the appalling vista of no deal at all.
In an ideal world, the UK would be wise to refuse to give the notice at all, until provided with some kind of advance indication of the deal it can expect – but the other 27 (at present) EU members refuse to negotiate without receiving this notice and may be dangerously irritated by excessive delay in providing it. Moreover, pro-Brexit MPs are anxiously pressing for notice as a guarantee against a Brexit U-turn. Furthermore, delay in this regard will also prolong market uncertainty about Britain’s direction of travel.
The EU will drive a hard bargain in some respects against the UK, not out of vindictiveness, but rather self-interest – including that of disincentivising further departures from the Union, and of creating a deal it may have to offer to other states on the periphery, like Switzerland. Harshness will, however, be moderated by the other member states’ own commercial interests.
Theresa May is reputedly a good negotiator. She had better be. In these negotiations she will face a 27-state colossus, with far less to lose in trading talks than does the UK.
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Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.
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Gavin Barrett – University College Dublin
Gavin Barrett is Jean Monnet Professor of European Constitutional and Economic Law in UCD Sutherland School of Law.
Britain imported far more from the EU than it exported to them. Britain was also a net contributor to the EU.
There is no evidence that, apart from a few short term issues, Britain’s economy will suffer in the medium to longer term, as Britain has the rest of the world to trade with. Germany in particular will wish to continue to export its cars and bathroom fixtures (amongst many other goods) to Britain and is unlikely to take any action which will alienate such a valuable market for its goods. The EU as a body is also unlikely to behave in an unreasonable fashion towards Britain as it has far more to lose given the flat refusal by some Baltic states to be dictated to by Germany when it comes to accepting large numbers of economic migrants. The economies of Portugal, Italy and Greece are in a dire condition, Marie Le Pens party is poised to make significant gains next year along with other Euro sceptic parties across other EU member countries. So, stamping their feet and making futile gestures at Britain should be the last things on their mind.
We do not want any deal which involves freedom of movement with the EU, nor do we want to be in the position Ireland was when it was told to have another referendum and keep doing so until the electorate voted the way the EU wanted. As for Scotland, it is part of the UK and it is no use Sturgeon and the SNP whining at the leave decision, we live in a democracy and the leave vote won the referendum.
“Britain imported far more from the EU than it exported to them. Britain was also a net contributor to the EU.”
The idea a trade deficit buys you influence is just nonsense. It’s a soundbite repeated endlessly by Eurosceptics despite being completely illogical. What matters is volume of trade, not the balance. The UK sends roughly 45% of its exports to the EU, the EU sends roughly 16% of its exports to the UK. It’s about as logical as claiming you can walk into a supermarket and start haggling the price of your groceries down because you buy all your shopping there and sell them nothing.
The referendum is over, it’s time we ditched incoherent soundbites and stepped into reality.
Yes the referendum is over and its time we ditched economic scare stories which are rooted in huge assumptions that are not based in reality.
Based on the figures you quote, the whole of the EU exports just under 20% of its total trade to Britain.
That is a massive loss to the EU if they start being petulant, the loss to Germany alone could be quite damaging to their economy.
We have the rest of the world with whom to trade.
As for haggling with Supermarkets, you don’t need to, they offer various enticements to get you to spend your money with them and, if you have any sense at all, you trade with the ones that offer you the best deal. Not the ones which wish to lock you into a whole host of agreements which are of no benefit to you.
1. 45% is a much larger number than 16% – you seem to think losing access to a market that accounts for 16% of EU exports would entail a “massive loss to the EU” yet don’t seem to acknowledge it would be a far larger loss to the UK.
2. The point in the supermarket example is to illustrate that the principle you’re trying to express (that a trade deficit buys you influence) would be nonsensical if you applied it to the real world. There are countless other examples showing that: e.g. would a state that relies entirely on another (e.g. Russia) to meet its oil/gas needs be able to dictate terms in a trade negotiation simply because it has a trade deficit? Would an island that has no export sector and relies entirely on US imports to feed its population have the upper hand in a negotiation? These are laughably silly statements, yet they’re identical in construction to what you’re arguing about the UK and the EU.
3. Even the idea that we can slap tariffs on to the EU and just “trade with the rest of the world” is implausible. We’d have to leave the WTO to do that as WTO rules prevent discriminating against other WTO members in that manner – or we’d have to put these tariffs on all WTO members equally, thereby ruining our supposed strategy of engaging with the rest of the world. Were you aware of that? Of course not.
Those are just three points, I could write another 20 if I had the patience but the argument frankly doesn’t deserve the effort. If you want to argue the UK will have the upper hand in a negotiation with the EU then you’re obliged to find a better case than basing it on a populist soundbite about trade deficits which has been debunked thousands of times before.