Brexit: ‘No Deal’ Between The U.K. And The EU Just Became A Lot More Likely [Opinion]

The Brexit negotiations between the U.K. and the EU seem to be in a state of crisis. Back when the talks began, both parties agreed that they’d need to progress on certain “phase 1” issues before talking trade. The odds of agreement have just dropped.

The problem has always been domestic. The British government initiated the Brexit process before deciding what they wanted the country’s final relationship with the EU to actually look like. As a result, Theresa May’s cabinet has been fractious and divided. It’s not been unusual for those divisions to actually be aired publicly, with cabinet colleagues undermining one another in public.

According to The Sun, some of the more prominent Brexiters in the cabinet believe they’ve won the prime minister over to their cause. Friends of Michael Gove, a major figure in the “leave” campaign, are claiming victory for the environment secretary. Significantly, Gove believes May will now refuse to keep U.K. laws in sync with the EU’s once Brexit is complete.

On the face of it, that sounds like a logical approach. Unfortunately, it has one major flaw. That flaw pretty much guarantees a “No Deal” scenario.

The Problem of the Irish Border

There are three “phase 1” issues that need to be worked on before the negotiations can progress. These are:

  • The nature of the U.K.’s financial commitments to the EU, and the amount the U.K. is willing to pay
  • The rights of EU nationals living in the U.K., and of U.K. nationals living in the EU
  • The land border between Northern Ireland (part of the U.K.) and the Republic of Ireland (which isn’t part of the U.K., and will remain in the EU)

The British government appears to believe the only thing the EU is interested in is money. If The Sun‘s report is right, May believes offering the EU a £40 billion divorce deal will allow talks to progress. That’s very unlikely to be the case, not least because the British government appears to be ignoring the Irish border.

Prime Minister Theresa May
Prime Minister Theresa May is taking a dangerous gamble. [Image by Andrew Yates - WPA Pool/Getty Images]

Back in 1998, the Good Friday Agreement finally brought an end to the Irish “troubles.” An open border was an essential component of the Good Friday Agreement, and is possible only because regulations on both sides of the border are the same. To give a sense of the scale of the problem, Irish foreign minister Charles Flanagan claimed that over 30,000 people cross the border every single day. Incredibly, that’s believed to be a conservative estimate.

The Irish government is deeply concerned over Brexit. As The Times explains it,

“Dublin, with full EU backing, is insisting that for talks to move to the second phase, the U.K. needs to make a commitment to avoid any future regulatory divergence between Northern Ireland and the EU, so as to allow goods to continue to move freely across the border. The U.K. government is adamant that it cannot give such a guarantee since this would undermine the economic and constitutional integrity of the UK itself.”

Irish Prime Minister Leo Varadkar has gone so far as to warn that, should the U.K. not give way on this issue, his country will use its veto to prevent negotiations moving on to the next phase.

It seems the British government intends to call Varadkar’s bluff. Unfortunately, it’s not clear that this is actually a bluff at all. The Irish position has been clear since the referendum, and the rejection of a hard border has been stressed through the EU’s negotiating guidelines. The EU has continually pointed out how important this issue is. Unfortunately, the British government seems to have no solution.

What’s Next For the Talks?

In December, EU leaders will rule whether or not the talks have made sufficient progress to move on to trade talks. If The Sun‘s report is correct, we can essentially rule that out. The U.K. will have one more shot in March 2018. Because the final deal needs to be approved by the European Parliament, any negotiations would need to be completed by October 2018 at the latest. There’s no way complex trade talks will be completed in just eight months. New Statesman notes that Sir Ivan Rogers, former British ambassador to the EU, argued instead that the process would likely take several years.

If talks don’t progress, the domestic impact is likely to be severe. Businesses are already preparing for the 2018-2019 tax year. In the event talks don’t progress in December, they’ll activate their contingency plans, and it’s impossible to estimate the economic cost to the U.K.

Theresa May’s majority is paper-thin. As the Independent reports, up to 40 Conservative MPs are already claiming to be willing to sign a letter declaring they have no confidence in the prime minister. In the event talks remain stalled, and the economic consequence of Brexit becomes undeniable, others are likely to join them. Crucially, only eight more Conservative MPs would have to sign up in order to force a vote on May’s leadership.

Brexit has brought about one of the most turbulent political times in modern British history. If The Sun‘s report is correct, things are about to get even more uncertain. The odds of the EU agreeing to move on in December are very low indeed, and that will leave the negotiations in dire straits.

[Featured Image by Jack Taylor/Getty Images]