A Guide to the (Now Even More) Inscrutable ‘Brexit’ – New York Times
How might it all end? No one knows for sure, but here are four possibilities.
Mrs. May has long insisted that no deal is better than a bad deal, though she has been saying that less emphatically since her election debacle. Business leaders say that a bad deal would have to be very punitive indeed to be worse than a breakdown of talks. That would lead to a “cliff edge” for British companies, which would lose their current arrangements for access to European markets in 2019.
While significantly less likely since the election, the “no deal” possibility should not be dismissed out of hand. The European Union requires progress on Britain’s “divorce terms” before the future trading relationship can be discussed. The divorce includes sensitive issues like Britain’s outstanding financial commitments to the bloc — which could result in a bill of as much as $75 billion. Mrs. May (or a successor if she falls) might reject such a hefty price tag, walk out of talks and try to rally support among voters in Britain by claiming that Europeans were trying to punish them for leaving. For a fragile government, that would be a high-risk strategy indeed — but so would agreeing to an expensive and economically damaging exit.
A Clean Break
Mrs. May says she wants Britain to leave the bloc’s Customs Union, which eliminates tariffs, so that Britain can make global trade deals independently. She also wants to quit the European single market, which smooths trade in services, because leaving would end the free movement of European workers, in that way restoring national control of immigration. According to her plan, those arrangements would be replaced by a comprehensive trade agreement with the European Union.
While this remains a likely outcome, with the Labour leader Jeremy Corbyn reportedly telling people that he expects to be prime minister within six months, there is obviously a long way to go. Mrs. May could lose a vote of confidence, leading to a disruptive Conservative leadership contest and the possibility of the Labour Party profiting from the division to win back control of the government. That could further dilute support for a clean break.
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Even barring a seismic event like that, there is widespread and growing acceptance that negotiating a new trade deal with the European Union cannot be done before March 2019, when Britain is scheduled to leave. That might lead to a “clean break plus,” a transition period of several years to give the British economy breathing space, a strategy being championed by the chancellor of the Exchequer, Philip Hammond.
Such an approach would most likely involve accepting, during the transition, current rules on the freedom of movement of European workers (and the jurisdiction of the European Court of Justice). It would probably also mean that Britain would have to agree to a divorce payment, effectively buying its economy time to adjust to new circumstances. All in all, that could prove expensive and would involve compromises. But when staring over a cliff edge, an economic parachute starts to look attractive, even if it comes with a big price tag.
After the grave election setback for Mrs. May, the idea of a “soft Brexit” that gives priority to economic considerations over control of immigration has gained traction. The politics are complicated. Eight out of 10 voters in the general election opted for parties that accepted the outcome of the referendum, including the opposition Labour Party. But Labour wants to keep closer economic ties to the bloc, as do the Liberal Democrats, the Scottish National Party and the Greens. Together, those parties garnered more than half the vote.
For now, Mrs. May rejects the softer withdrawal. However, some analysts say they suspect that the government’s position will shift later in the negotiations and that London may seek a type of membership of the Customs Union. If not, the government might struggle to get withdrawal legislation through Parliament.
Resistance might come from the House of Lords, the unelected, upper chamber of Parliament that revises legislation. But the House of Lords will probably — eventually — take its lead from the elected House of Commons.
That makes the position of the Labour Party crucial. By opposing the Conservative Party’s detailed plan for withdrawal (rather than the principle of withdrawal), and pressing for some sort of membership of the Customs Union, Labour might force ministers to change course — and, if it’s lucky, bring down the government in the process.
“You may say I’m a dreamer, but I’m not the only one,” the European Council’s president, Donald Tusk, quoting John Lennon, said when asked about the prospect of Britain’s remaining inside the European Union. With both the Conservative and Labour parties committed to leaving, that remains unlikely. It would require a significant further shift in public opinion in favor of remaining, more so even than in the recent election, before lawmakers would start to feel the heat. Even then, it would tear apart the Conservative Party and invite a white-heat campaign against the government by Britain’s tabloid newspapers.
Nevertheless, there are signs of a slowdown in the British economy, and if conditions were to worsen during the negotiations, the withdrawal from the European Union could become increasingly unpopular. As the trade-offs become clearer, voters might conclude that the gains promised by the “Leave” campaign during the referendum were either bogus (like the 350 million pounds, or about $446 million, a week to be made available for the National Health Service) or likely to be outweighed by the losses.
Reversing the withdrawal would probably involve a change of government and another referendum, and all that is hard to envisage. But if the recent volatility of British politics proves anything, it is that the unlikely is possible.