More than two years have passed since the referendum, but Davis had not spent more than four hours in trying to negotiate with his E.U. counterpart Michel Barnier. And the clock is ticking: The UK is supposed to leave the E.U. by March 2019; there has to be an agreement on the exit terms and the transition period before October.
Brexit negotiations haven’t made any progress because the UK government has spent more time negotiating with itself rather than Brussels, which has simply had to wait for London to sort itself out.
Prime Minister Theresa May was supposed to bridge the divides in her cabinet, get some sort of realistic strategy on paper and get on with the key task of negotiating with Brussels. Initially, it looked as if the prime minister had managed to get everyone aboard for a shotgun agreement on some sort of policy. It didn’t last long. Now everything risks going up in flames.
May has tried to combine the rhetoric of “hard Brexit” with policies of a “soft Brexit,” which would have been difficult even under the best of circumstances. The resigning Brexiteers are not wrong in pointing out some of the flaws in the proposed deal. It tries to square a circle, which historically has always been tricky. Not being in the single market, but seeking to be for the sake of goods, was bound to be a tricky position both in terms of domestic public opinion and in the relationship with the remaining E.U. countries.
Are there options? A Norwegian-style model with a membership of the single market is technically possible, but it does include a painful democratic deficit that would be hard to swallow. Norway is a member of the E.U. single market and accordingly has to abide by all the rules that define this market, ranging from the minutiae to the massively important. But it’s the E.U. member states that decide the rules on the single market that Norway must follow. In fact, May seems to be seeking a semi-Norway solution for UK goods. But the E.U. is likely to want to go full-Norway.
Many industries have made clear that these economic issues are fundamental issues for them — Airbus is only the latest company that has started to speak up. Car companies are in the UK to produce not only for the UK, but also for the entire E.U. market; others are dependent on tightly integrated value chains with thousands of suppliers spread across the E.U. If their integrated market or production bases are suddenly fractured with tariffs, rules-of-origin procedures and unforeseen costs, it simply doesn’t work anymore. The world is a very competitive place, and deteriorating competitiveness due to new barriers and costs has a high price.
This is what has driven May toward her new approach. But not only does it clash with her “red-line” rhetoric, it also has infuriated the Brexit Taliban and is unlikely to fly with the remaining 27 E.U. countries.
So where is all this heading? The London betting firms might be as good — or as bad — in predicting what will happen as the political pundits and observers. It’s a profound mess — but there the agreement ends.
The worst possible outcome would be a UK that simply crashes out of the E.U. without an agreement. I still believe and hope that sanity will prevail and prevent this, but with the current turmoil, nothing can be excluded.
The entire Brexit process has demonstrated how integrated the E.U. economies and societies have become during their decades together and how intrusive in many different areas the divorce process really is — from nuclear safety to the possibility to travel across Europe with your favorite pets. To disentangle — say California or Texas — from the United States might only be marginally more difficult.
The United Kingdom has to choose between different bad options, and that is never a comfortable situation to be in. The UK’s government will be able to chart a course out of it only when it wakes up to the unpleasant realities of its predicament.
But we are not there yet.