UK seeks to seize back Brexit initiative
UK Foreign Secretary Boris Johnson gave a set-piece Brexit speech on Wednesday in London, the first in a series by Cabinet ministers seeking to seize back the initiative from Brussels in UK exit negotiations. These interventions come at a critical stage with talks on a transition deal having just started.
There had been growing business and political confidence, since December 2017's first phase Brexit deal, that such a transition deal can be secured, potentially quickly by March. Yet, this is becoming tougher, in part because of the significant, ongoing divisions within Prime Minister Theresa May's government.
While Mrs May had been temporarily buoyed in Westminster by December's deal, she remains in a very weak political position overall. And it is this that makes her already poor hand of cards on Brexit even more difficult to deal with, let alone win, against Brussels in coming negotiations not just over the transition, but also any final settlement with the EU-27.
Mrs May had hoped last June that a big UK general election victory would allow her to smooth over the deep divisions in the Cabinet and forge a consensus on Brexit strategy. But there is significantly less chance of that now, despite December's deal, and the fundamental disagreements within her senior ministers on the nature and length of any transition may not ultimately get resolved until the second half of the year at the earliest.
Underlying these key disagreements - between pragmatists like Chancellor of the Exchequer Philip Hammond and ideological Brexiteers such as Mr Johnson - is the deeper, crucial issue of what the United Kingdom will actually transition to in terms of its relationships with the EU-27. Remarkably, more than a year and half after the Brexit referendum, Mrs May's government appears to have no firmer idea of where the nation is ultimately headed than when she gave her landmark Lancaster House speech in January 2017, and indeed, the first time the Cabinet had a formal discussion on this topic was in December.
A sign of continued disagreement over such fundamental Brexit issues among senior ministers came when Mr Hammond refused earlier this year to rule out the United Kingdom remaining in the European Customs Union. This put him at odds with Mrs May who last year ruled out retaining any "bits of EU membership" post-Brexit and asserted instead that she would like a harder exit leaving the Customs Union, Single Market, Common Commercial Policy and the Common Commercial Tariff while seeking a "bold, ambitious free trade agreement" with "the freest possible trade on goods and services...that is frictionless as possible".
Until London has addressed these first-order exit questions - with the associated tradeoffs such as a potential "harder border" in Ireland - with greater clarity, Brussels has indicated it may drag its feet in forthcoming transition negotiations. And this, alone, could rule out a deal by March which will disappoint UK and European corporates looking to plan ahead for the post-Spring 2019 business environment.
To be fair, European Commission president Donald Tusk has said that Mrs May is becoming "more realistic" about the tradeoffs that will be necessary in the final negotiations. But nonetheless, it is very unclear whether Mrs May's collective negotiating demands - should she ultimately press for a "hard Brexit" - can be realised from the EU in the timeframe of Article 50 given its own robust negotiating positions.
WEAKENED POLITICAL STANDING
This is especially so given Mrs May's weakened political standing after June's UK general election where she lost her parliamentary majority. Indeed, it remains possible that her government could fall in 2018.
So with a significant amount now beyond her power, even more rests on whether the remaining 27 EU states will ultimately offer outlines of such a deal on attractive enough terms to her to accept. Here, much may depend upon whether the EU-27 fragments in 2018 with its Brexit preferences, or alternatively that it shows the same degree of strong unity and common interest that it did in 2017 vis a vis the United Kingdom.
Last year, the perceived existential threat from Brexit seen by some continental politicians, alongside the in-built advantages for Brussels within the two-year Article 50 process handed the initiative to the EU-27. For example, under Article 50 it was for the EU-27 alone, not the United Kingdom, to decide last December whether "sufficient progress" was made in the first phase divorce talks to justify moving to the next stage, fortifying the bloc's already strong position.
And as well as adjudicating the process in this way, Brussels has also controlled the time tabling too. This is exemplified, for instance, with the decision of Brussels to delay until later this year substantive talks on the future UK-EU relationship, including over trade, putting the transition talks first, despite the fact that London wanted the sets of talks to proceed in parallel.
Taken overall, with London now raising the stakes in securing a final deal, and transition, 2018 will be huge and historic not just for the United Kingdom but also the EU. Delivering a smooth departure will need clear, coherent strategy and thinking so all parties can move toward a new constructive partnership that can hopefully bring benefits for both at a time of significant global geopolitical turbulence.
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