EU Member States Continue to Dictate Brexit
The Chief European Commission Brexit negotiator, Michel Barnier, is often described in the media as the source of the European Union's tough stance on the Brexit negotiations. But it is increasingly clear that EU member states and their chief representative, EU Council president Donald Tusk, former prime minister of Poland, are the ones tightening the screws on Prime Minister Theresa May's government over the terms of Brexit.
In Dublin, standing next to the Irish prime minister, Tusk essentially froze the Brexit negotiations when he noted that Britain rejected a customs and regulatory border and also the EU single market. "While we must respect this position, we also expect the UK to propose a specific and realistic solution to avoid a hard border," he said at the March 8 meeting. "As long as the UK doesn't present such a solution, it is very difficult to imagine substantive progress in Brexit negotiations. If in London someone assumes that the negotiations will deal with other issues first, before moving to the Irish issue, my response would be: Ireland first."
Tusk thus made it clear that no Withdrawal Treaty can be signed without explicit solutions to the Irish border issue. Given that the Withdrawal Treaty is the only vehicle that can grant legal certainty to the idea of a "transition period" until the end of 2020, businesses will continue to lack such legal certainty about any transition until much later in 2018 at best.
The political agreement that has emerged ahead of the EU Council meeting on March 22–23 hence does not offer UK businesses certainty about their business climate after March 2019 and indeed rules out an extension of the transition beyond 2020. This delay could cause many of them—especially those in heavily regulated sectors such as financial services—to continue to implement contingency planning based on the worst case "no deal" scenario, plunging the British economy into further uncertainty. On the other hand, the Russian nerve gas attack in Britain earlier this month makes it more likely that the EU-27 will send May home with a show of political solidarity. Still, hard decisions looming over the solution to the Northern Irish border will need to be addressed before the next EU Council meeting in June.
The day before his meeting with the Irish prime minister, Tusk released the draft EU Council guidelines for the future long-term relationship with the United Kingdom. The guidelines explicitly reject the vision for this relationship May put forward in her speech just a few days earlier. Instead, the draft guidelines make it clear that, given the UK government's stated positions on Brexit, only a Canada-style Free Trade Agreement (FTA), excluding financial services and other piecemeal closer collaboration, will be possible.
Intriguingly, in light of Labour leader Jeremy Corbyn's recent support for an EU-UK customs union, the draft guidelines look like an invitation to Labour, Tory party rebels, and other UK parties to unite against May's Brexit position. Paragraph 13 notes how only a Canada-style FTA is possible with the UK government's red lines, but that "If these positions were to evolve, the Union will be prepared to reconsider its offer…." A more direct way to attempt to influence domestic UK politics is hard to imagine.
And finally, the draft guidelines make it clear that the EU Council "will return in particular to the framework for the future relationship at its June meeting." These words signal that not much may happen at the EU Council and that something might shift after the March 22–23 meeting. Perhaps the EU Council is awaiting the outcome of a vote in the UK Parliament on whether to commit to a customs union, now expected at the end of March (after the EU Council), or perhaps the other leaders are awaiting the political fallout from the UK local elections on May 4.
Two things though are certain now about the Brexit negotiations—time continues to be very short and the EU-27 continues to shape the manner of Brexit in their favor. Having compelled the United Kingdom to accept virtually every major negotiating point to date, will the EU-27 be any more forgiving on Ireland in the coming months or on anything concerning the future relationship? Certainly not. And will the United Kingdom really be in a better position to say "NO!" to the EU-27 demands in December 2020 right before the shifted cliff edge? Almost certainly not.
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