An optimist’s view on the eve of Brexit talks
For a start, the talks should still begin on time and with the UK represented by the Secretary of State for Exiting the European Union, David Davis, who has been in post since July last year. That may not seem like much to cheer about, but could not have been taken for granted just a few days ago. Of course, Monday’s opening negotiations were only ever likely to be talks about talks, with no substantial progress (except perhaps on citizens’ rights) expected until after the German federal elections in September. The aim remains to conclude the formal negotiations by October 2018, giving national parliaments six months to ratify any agreement before the UK formally leaves the EU at the end of March 2019. Crucially, though, the results of the UK election alone should not disrupt this timetable.
Second, the UK may well be better prepared for the talks than many suggest. There have been plenty of unfavourable comparisons between the ‘detailed’ guidelines for the Brexit negotiations published by the European Council and the ‘limited’ material released so far by the UK government. However, Prime Minister May did set out 12 key negotiating principles in her Lancaster House speech in January, followed by a substantial White Paper in February, and clear statements of intent in the letter triggering Article 50 in March. Viewing these side-by-side it is not so obvious that one party is any less ready than the other.
Third, and perhaps most importantly, there is already a lot of flexibility built into the positions of both sides. Again, most commentators have made much more of the differences than the similarities. For example, the parties have disagreed on the sequencing of the negotiations. EU officials initially pushed for a phased approach where the Brexit ‘divorce bill’ would need to be agreed before discussions on any future relationships could begin. This never quite made sense, as the nature of these relationships would be a key factor in deciding the UK’s financial obligations (and rights) as a departing member. But the EU’s guidelines now anticipate that the negotiations can overlap provided ‘sufficient progress’ is being made on priority areas.
What’s more, both sides have already recognised the appeal of some sort of transitional arrangement, or implementation period, to avoid a chaotic and potentially catastrophic ‘cliff-edge’ Brexit. After all, no-one can now realistically expect a bespoke free trade agreement to be finalised in time for March 2019. This is surely the right context in which to view the reigniting of the debate in the UK over membership of the Single Market, the Customs Union, and the various permutations including the ‘Norway option’. Arguably, these options have always been in play, even if only as a stop-gap.
The UK government’s White Paper, for example, had the following to say on the Customs Union – and this was back in February:
“In leaving the EU, the UK will seek a new customs arrangement with the EU, which enables us to make the most of the opportunities from trade with others and for trade between the UK and the EU to continue to be as frictionless as possible. There are a number of options for any new customs arrangement, including a completely new agreement, or for the UK to remain a signatory to some of the elements of the existing arrangements. The precise form of this new agreement will be the subject of negotiation…”
Of course, the EU may not be accommodating. Certainly, there is no sign of flexibility on the four fundamental freedoms of the Single Market: goods, services, capital and – most importantly of all – labour. The EU has also insisted that the UK should continue to honour its existing obligations (including submitting to the jurisdiction of the ECJ) during any transitional period beyond 2019. But it is surely wrong to assume that the talks will inevitably end in disaster.
Fourth, with expectations now so low, there is a good chance of some pleasant surprises as the negotiations begin. In particular, both sides have said they will prioritise reciprocal rights for UK and EU27 citizens. The details will still take some time to work out and the administrative difficulties should not be under-estimated, but a clear statement of agreed principles on citizens’ rights would set a more positive tone for other negotiations. This at least is an issue on which the Conservative government can bank on support from Labour and it could even feature in the Queen’s speech, now scheduled for Wednesday 21st.
The key message, then, is ‘don’t panic’. The talks are likely to begin on time and there is still all to play for. Brexit provides a once-in-a-generation opportunity to create a more flexible, open and vibrant economy. The prospect of a year or more of difficult negotiations – and perhaps only a phased departure from the EU thereafter – should not blind us to this prize.