Brexit means Brexit – or does it?

In a largely unnoticed softening on the EU side, there is also a willingness to embark upon a transitional period on both sides

Dr. Mohamed A. Ramady
Dr. Mohamed A. Ramady
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The 24 January UK Supreme Court ruling stating that the government has to obtain Parliament’s go ahead to trigger Article 50 is unlikely to change the timing or substance of the UK government’s plan or position vis-à-vis Brexit – that is to exit the Single Market, negotiating first a transition agreement, and then a Free Trade Agreement with the European Union.

In a largely unnoticed softening on the EU side, there is also an acknowledged willingness now to engage and embark upon a transitional period on both sides to avoid a “cliff edge” approach by EU member states and the UK. This is driven by a fear of the contagion effect of the UK Brexit decision.

However, the recent visit of UK premier Theresa May to the US and the gushing statements of a new US-UK trade and global alliance could make the EU harden its position against the UK, with the French presidential candidate Emmanuel Macron claiming that Britain could become subservient to the US as a “vassal” state.

The dramatic British popular vote to leave the EU has emboldened populist movements across continental Europe, some of them now pressing for similar referendum votes on whether to remain or join the UK in leaving the EU, and the most significant effect of the Brexit vote has been to push anti-EU leaders to embolden them that the “unthinkable” might actually happen.

The most interesting countries to keep an eye on right now are none less than two of the founding members, Netherlands and France. Ironically these are the two countries that rejected the European Constitutional Treaty in 2005 in the first wave of popular backlash against further EU integration.

Both these countries have elections scheduled for the first half of 2017 (before March 15 in the Netherlands, May 27 in France), and both have very strong anti-establishment parties led by Geert Wilders (the Dutch PVV) and Marine Le Pen (the French Front National).

The UK Supreme Court ruling is also unlikely to significantly shift the government’s negotiating position on the matter, nor its decision to exit the single market. That is because Parliament’s position on Brexit is not in conflict with the government’s, in the sense that it does not question the red lines put forward by PM Theresa May.

Parliament, especially the Labor opposition party, other disgruntled conservative members, the SNP and Liberal Democrats are simply likely to identify different priorities – or to reinforce identified ones – such as protecting workers’ rights, privileged access for manufacturing industries over financial services, and protection of working standards which have been achieved during Britain’s membership of the EU.

In this sense, the UK Parliament will demand to be kept in the loop during the negotiations, and will put pressure on the government to obtain the widest possible access to the Single Market, seen as paramount by the overwhelming majority of UK political parties, without, however, any prejudice to the principles that clearly came out of the June 23, 2016 referendum, although some are arguing for a new referendum.

The transition would allow time for the UK to negotiate an FTA with the EU, but also to intensify talks with other countries, including the Gulf states, as well as the United States

Dr. Mohamed Ramady

May’s U-turn

This pressure has produced results whereby in a U-turn Theresa May has announced the government will set out its Brexit plans in a formal policy document, and, in the understatement of the year, she said she recognized an “appetite” for a White Paper on her “bold” proposals for negotiations with the EU. This White Paper will reveal either the UK Government has a well thought out plan for exit or it does not.

So what lies ahead for the UK, given that any further legal stumbles or seeming hesitation by the Conservative government to ensure that Brexit really means Brexit could raise the serious spectre of yet another Scottish independence referendum? This is not to forget that the Welsh and Irish Assemblies are also pushing for clarity and protection of their special economic interests following Brexit.

Although it is clearly too early to speculate on this, a possible practical solution down the road to facilitate an FTA could be to adopt EU standards for UK companies that export to the EU, and to simplify rules for purely domestic businesses.

With all the focus on the UK gone unnoticed, there has been a major shift in mood in many European capitals with EU leaders now openly keen on a “grey” Brexit, which they believe to be more appealing than a disorderly process that could have resulted in a longer delay in the triggering of Article 50, or a second referendum, or even the UK walking back from withdrawal altogether.

Trump factor

For all the anger and frustration leading to here, and with a Trump Presidency threatening to unravel international trade agreements, at this point both the EU and the UK want to get through negotiations in a rational, non-contentious way, with the potential for a transition period now being opened.

The need for a transition period has been for months an open secret, but neither the EU nor the UK has wanted to talk about it for fear of weakening their negotiating hands. But now the reality has hit that the infamous “cliff edge” would be a negative for both sides, and that such transition period will have to be openly negotiated for an “orderly” and successful Brexit to happen.

The transition would allow time for the UK to negotiate an FTA with the EU, but also to intensify talks with other countries, including the Gulf states, as well as the United States who, under President Donald Trump, seems keen on restoring the old-style special relationship with the UK and has promised to put Britain at the front of the queue, rather than at the back under a more pro EU President Obama.

In the big picture, EU capitals are relieved the UK has acknowledged it will not be intending to push for full, but rather conditional, membership of the single market, while at the same time asking for restrictions on free movement.

This gives EU negotiators much more clarity, as both sides now acknowledge the new relationship will surely be something “less” than the old one, as per German Chancellor Angela Merkel’s words. While Brexit may mean Brexit after all, it depends how elastic will be the final definition of Brexit, as quite frankly few people really know.
Dr. Mohamed Ramady is an energy economist and geo-political expert on the GCC and former Professor at King Fahd University of Petroleum and Minerals, Dhahran, Saudi Arabia.

Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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