The UK and Europe

Theresa May's opening gambit

Andrew Grice / Jan 2017

Photo: Shutterstock

Before her long-awaited speech on Brexit, Theresa May’s aides trailed it as an attempt to build bridges with the EU27 in order to get negotiations off to a positive start when she invokes Article 50 of the Lisbon Treaty by the end of March.

It is true that the Prime Minister offered an olive branch to the EU, making clear that she did not share Donald Trump's hopes that the bloc collapses, and saying she wanted it to succeed and prosper. She promised to be a good friend and neighbour whose defence and intelligence capabilities would help to keep Europe safe, which British ministers hope will be a big bargaining chip given Trump’s lukewarm attitude to Nato.

But the welcome warm words near the start of the speech were spoiled by a nasty cold shower towards the end. May issued a direct threat to retaliate if the EU punished the UK for leaving the club. She repeated the Chancellor Philip Hammond’s warning in an interview with Welt am Sonntag, that the UK would change its economic model in these circumstances – in other words, aggressively reduce its business taxes to undercut the EU27.  May didn’t need to reiterate it. On this occasion, she should have played soft cop to Hammond’s hard cop. Her warning meant that overall, the speech was not as conciliatory towards the EU as her aides had billed.

She also played hardball by providing some music to the ears of the hardline Brexiteers – by threatening to walk out of the negotiations rather than accept a bad deal, which would mean reverting to World Trade Organisation tariffs. Again, the “no deal” threat was hardly designed to smooth the path to the mutually beneficial EU-UK deal May wants.

The Prime Minister hoped that the EU would welcome the clarity she provided in confirming that Britain would leave the single market. But her desire for a comprehensive free trade agreement and her opaque statement about a tariff-free customs deal look very like the “cherry-picking” that the 27 have ruled out. Yes, the UK is definitely leaving the EU, but it seems to want to opt back in to the elements that suit it very nicely. All, of course, without paying much money into the EU pot or being subject to the jurisdiction of the European Court of Justice (even though another form of policing and resolving disputes about an EU-UK trade deal would have to be created).

In the Whitehall mandarin language of “Yes Minister”, Sir Humphrey would have described May’s negotiating goals as “ambitious.” The bespoke “Canada-plus” deal she seeks would almost certainly take several years, and require a longer transitional period than May has in mind. And will the EU really go out of its way to strike a quick trade deal when it knows the UK is also  trying to reach a “signature-ready” agreement with the United States, as the former Cabinet minister Michael Gove reported after interviewing Trump for The Times?

In Brussels, the Prime Minister’s speech may well be viewed as an opening bid at the start of a long game. One stumbling block is that in London, the Brexiteer brigade in Parliament and the press often forget that it takes two to tango. There is an assumption that the UK will get whatever it wants, that the EU will roll over adopt May’s “plan for Brexit.”

After appeasing the hardliners in her Conservative Party, May now needs to prepare them for the inevitable compromises that will have to be made. Otherwise there really will be no deal.

Andrew Grice

Andrew Grice

January 2017

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