Message to London: Divorcing Is Hard to Do

Many of the real thinkers in London currently have far too cheery a perspective on achieving Brexit. They believe it can be done without major disruption of commerce.

Many even believe that the UK government is in control of the timing and that the UK can preserve most of the benefits (EU market access), while getting rid of the things it dislikes (EU budget contributions and migration).

While many acknowledge that the UK is going through a bad stretch now, they expect an export boost due to the lower exchange rate.

UK too optimistic

It will not be so easy. All commerce relies on commonly understood rules, and there must be consensus on how the rules can be updated.

Disengaging the UK from the EU, and from the rules the EU has been making on the UK’s behalf, will be like undoing all the stitching of a patchwork quilt and then re-stitching some parts of the quilt together, while making a new quilt of the rest.

The UK is, at the moment, stitched into thousands of regulations and international treaties, which it made as a member of the EU over the last 43 years.

Each piece of stitching will have to be reviewed both on its own merits and for the effect which the rearranging might have on other parts of the quilt.

This is, first and foremost, a problem for the UK itself.

It certainly doesn’t help that the UK, unlike Germany or any other major European nation, doesn’t have a reliable constitutional structure or a federal system that could be depended upon to manage the change process. Things in the UK are very London-centric.

What UK goals?

As if that weren’t bad enough, nobody even in the Conservative government itself has a clear idea what UK voters voted FOR on June 23. The Brexit vote, narrow though it was, encapsulates a hodgepodge of reasons, many of them contradictory to one another.

Many voted to leave because they wanted more protection from global competition. Others wanted to get out of the EU, so they could deregulate their economy and dispense with EU social rights.

Their ultimate goal is to promote more global competition and lower costs (wages) in the UK economy – the direct opposite of what many voters actually desire.

It will be very hard for Theresa May to square these goals. But she has to do so before she can proceed much further. The UK government must have a clear sense which set of economic policies it wants to pursue. Only on the basis of that choice can it then decide what sort of relationship it wants with the EU.

Two negotiations

Article 50 of the Lisbon Treaty says a Withdrawal Treaty must take account of the “ framework” of the withdrawing country’s “future relationship” with the EU.

Accordingly, I believe Article 50 means that there will be two negotiations:

• one on “Withdrawal” and
• one on the” Framework” of the future EU-UK relationship.

I believe the two treaties must be negotiated simultaneously and in parallel. Look at it from the perspective of my home country, Ireland.

Ireland cannot afford to wait until the UK is already a “third country” (meaning that it has actually withdrawn from the EU) before border, travel and residency issues between Ireland and UK are sorted out. We need these issues sorted out before the UK leaves.

It will be like a divorce negotiation

As with a divorce, the Withdrawal Treaty will be about dividing up the property. This part may be relatively easy to negotiate.

The Framework Treaty will be about the future, and like marital disputes about access to and care for children, this one will prove to be much more harder to conclude. The subject matters it deals with are fraught and complex.

Nobody knows yet what the UK will look for. The 27 EU leaders rightly insisted that the four freedoms – freedom of movement of people, goods, capital and services – go together. Nobody has any idea yet how the UK will propose to get around that.

UK cannot make deals with others, while it is still an EU member

Until it leaves, the UK is still a member of the EU and is bound by all EU rules. It will fully participate in all key EU decisions, except those concerning its own exit terms.

UK’s hands far more tied than London realizes

This means that the UK cannot do trade deals with other countries, while still in the EU. This will greatly complicate the efforts of Liam Fox, the UK’s new Minister for International Trade.

He wants for the UK to leave the EU Customs Union, so he can negotiate trade agreements with countries outside the EU.

He may have made those plans without a full understanding of the UK’s legal commitments inside the EU. Indeed, it would appear he cannot even enter into commitments about future deals, particularly ones that might undercut EU negotiating positions.

This is because, as long as it is still an EU member, the UK must, under Article 4 of the Treaty, act in “sincere cooperation” with its EU partners.

The meaning of “sincere cooperation” was elaborated by the European Court in judgements it made on cases the European Commission took against Germany and Greece.

In those cases, the court overturned separate understandings each of those two countries had forged with other countries, on matters that were EU responsibilities without EU involvement.

Thus, in order to ensure that he stays within the law, Liam Fox may have to take a European Commission official with him on all his trade travels around the globe, at least until the UK has finally left the EU. Can you imagine the disgrace to the sovereignists?

The UK should not be rushed into triggering article 50

Indeed the more closely the UK government looks at its options, the longer it may take to decide when to trigger Article 50.

The leaders of the EU 27 should not rush the UK on this. Short-term uncertainty is a very small price to pay for avoiding a botched and ill prepared exit negotiation. Everyone would lose from that.

In that context, it is important to recall that the UK civil service did not, expect to find itself in this position. After all, UK civil service studies, done long before the Referendum, concluded that the UK’s then existing relationship with the EU was just about right.

The civil servants evidently assumed a higher degree of rationality in the electorate at large than manifested itself on June 23, 2016.

Another reason to go slow with triggering Article 50 is this: Once it is triggered, the UK cannot, easily or legally, change its mind and revert to the status quo, even after a General Election.

A major distraction from other vital work

Meanwhile, Europe really has so much other work to do. Under present circumstances, there is little appetite or stamina to devote a great amount of political energy and attention to the minutiae of EU divorce law, just because three percentage points of Britons than what would have defeated the referendum felt that way.

As things stand, the EU now has to do the completely inopportune thing and devote itself to unravelling 43 years of interweaving between Britain and Europe.

All this highly demanding technical work has to be done, at a time when Europe should be looking outwards towards the opportunities and threats of a rapidly changing and unstable world.

The clear sentiment of a total misapplication of political energies and intelligence will not do anything to grease the wheels of compromise with the UK in the minds of many Europeans.