Brexit matters are coming to a head as we approach the end of 2017. There are signs that the politicians involved in the process recognise the gravity and urgency of the situation. Aside from the formal rounds of talks, several additional conversations are being tacked on to other ministerial meetings and functions to discuss ways to move negotiations to Phase 2 in December. Michel Barnier’s famous clock has never ticked so loudly but will its alarm bells soon begin to ring?
The answer to that question will depend on a swift resolution to Phase 1 issues.
Citizens’ rights – Of the three Phase 1 issues currently under negotiation, most progress has been made on citizens’ rights, and agreement appears to be in sight. The potential stumbling block remains the role of the European Court of Justice (ECJ) during in any agreed transition period.
Irish border – All parties have said that a hard border is not an option but a way to achieve this goal continues to prove elusive as the UK insists that it will be leaving the customs union. However, the EU may be more willing to allow talks on this issue to continue in parallel with Phase 2 than it is on the financial settlement and citizens’ rights. Ireland also wants to see a longer transition period than the UK’s current proposal of around two years.
Financial settlement – Defining the terms, if not the figure, of the settlement remains the biggest hurdle to jump before Phase 2 can begin. If the UK is to pledge more money than is already on the table, Brexiteers are demanding concessions from the EU in return – although, at this stage, it is unclear what this would entail. The UK government appears to be ready to commit to paying more in a bid to trigger Phase 2, but will it be enough?
Meanwhile, David Davis has identified certain countries within the EU 27 bloc as being more open to moving on to Phase 2 than others. Is this an attempt to ‘divide and conquer’ and, if so, will it succeed? Much has been made of EU 27 unity as adding strength to the EU’s negotiating position.
Although Phase 2 talks on transition and trade have not officially begun, and may not until March 2018 if a breakthrough isn’t achieved very soon, key figures on all sides of the debate are openly musing over what such deals might look like. A leaked EU Commission document indicates that the UK’s hopes to strike a bespoke trade deal with the EU will be dashed. The Commission believes that if the UK insists on leaving the single market and customs market whilst also removing itself from the jurisdiction of the ECJ, this would limit the deal options available, therefore precluding a ‘special’ arrangement.
Instead, the EU appears to be pointing towards a standard Canada-style deal as being the only model available. This suggestion is at odds with Theresa May’s call for the EU to adopt a creative and imaginative approach to any future arrangement. At the same time, Michel Barnier has reiterated that the EU will not compromise its legal standards relating to competition, tax, labour, environment and food safety in any trade deal negotiations. If the UK really wants to maintain a close trading relationship with the EU after Brexit, it will need to abide by these standards too. A proposed deal that does not fully adhere to them may be rejected by member states during the final ratification process.
Political uncertainty is not exclusive to the UK at present. In Germany, coalition talks have collapsed which could have significant implications for Brexit at a crucial stage in proceedings. If Berlin is not willing or able to make key decisions on this issue (which isn’t a domestic priority) in the short term, the chances of progress to Phase 2 may further diminish. Prolonged uncertainty caused by fresh German elections, Angela Merkel’s preferred option, could present a significant spanner in the wider Brexit works. A winter of Brexit discontent may be approaching…
Article published: 21st November 2017
