Insight
Why the 27 are taking a hard line on Brexit by Charles Grant 3 October 2016
Britain’s partners have forged a common response to the forthcoming Brexit talks. Given their tough line – refusing ‘pre-negotiations’ and insisting that Britain cannot have the single market without free movement – how should Theresa May’s government respond? The British government knows that the Article 50 exit procedure was designed to put the country leaving the EU at a disadvantage. So, prior to invoking the article, its envoys have been urging other EU governments to give some indication of which demands would be acceptable to them; they don’t want their opening bids to be shot down as soon as the procedure starts. But the 27 – fearing that British diplomacy may sow divisions among them – have refused any ‘pre-negotiation’. In the words of one senior German official, “we tell the British, ‘too bad, you’ll have to take your chances’.” Once the article is invoked, the British will have to negotiate with the European Commission, though the Council of Ministers, representing the member-states, will watch it closely. The two years prescribed by Article 50 will weaken the British hand. The clock will be ticking when Britain seeks to complete not only the exit talks, but also an interim agreement covering the period between when it leaves the union and the entry into force (probably many years later) of a free trade agreement (FTA) between the UK and the EU. The UK will also have just two years to become a normal member of the World Trade Organisation (WTO), and to negotiate bilateral deals with the 53 countries with which the EU has FTAs, which will cease to apply to Britain on the day of Brexit (see ‘Theresa May and her six-pack of difficult deals’; technically, the two-year period may be extended, but only if the 27 agree to do so unanimously, and they will not). If these talks break down or Britain leaves the EU without having completed these agreements, the British economy would take a very big hit. On recent visits to Berlin, Brussels, Paris and other EU capitals, I have been struck by the largely united approach of the 27 to the Brexit negotiations. They assert that if Britain restricts free movement after it has left the EU, it cannot be part of the single market. Instead, they suggest, it should negotiate a free trade agreement with the EU, along the lines of that between the EU and Canada. This could be very damaging to Britain’s services industries, including those in the City of London, since FTAs do not normally cover many services. CER INSIGHT: Why the 27 are taking a hard line on Brexit 3 October 2016
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