As clock ticks down, Britain finally reveals its plan for Brexit. What now?

Joel Rouse/MOD/Reuters
British Prime Minister Theresa May and her cabinet begin discussions about the government's plans to exit the European Union at Chequers, the prime minister's official country residence, near Aylesbury, England, July 6.
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It has been two years since British voters chose in a referendum to withdraw from the European Union. But only tomorrow will the government actually publish its vision of what kind of relationship it wants with the EU after "Brexit." That’s because the ruling Conservative Party has been at war with itself over Europe for years, and Prime Minister Theresa May has been trying to keep the peace between hard Brexiteers who want a clean break from the EU and those favoring a “soft” Brexit, meaning Britain would maintain close ties with the continent from outside. Nine months before the deadline to leave the EU, Ms. May has come down on the soft side, but it is not clear that she has made enough concessions to convince Brussels to do a deal. On the other hand, she may have made too many concessions to secure the majority she needs in the British Parliament to pass her withdrawal plan. Brexit has turned into a very complicated mess with no clear outcome.

Why We Wrote This

Brexit is starting to come to a head. Yet most observers – including Britons – still don't have a grasp of what's going on or where it will end. On the eve of Britain's Brexit policy reveal, we break it down.

On Thursday, the British government will finally say what exactly it wants from Brexit – more than two years since a referendum called for Britain’s withdrawal from the European Union. But Prime Minister Theresa May’s new vision has already prompted two top cabinet ministers to resign, and the European Union seems unlikely to accept it. The most intractable crisis in British politics since World War II is set to continue.

Why does the white paper matter?

This is the first time that the government has presented a coherent account of its vision of London’s post-Brexit relationship with the EU. Only last Friday did the cabinet agree to it, and none too soon; Britain is due to leave the union by March 29 next year.

Why We Wrote This

Brexit is starting to come to a head. Yet most observers – including Britons – still don't have a grasp of what's going on or where it will end. On the eve of Britain's Brexit policy reveal, we break it down.

Membership in the EU has been the cornerstone of Britain’s foreign and economic policy for more than four decades, so it was bound to be difficult to disentangle itself. But it has taken two years for the government to decide just what Brexit should mean, largely because the ruling Conservative Party has always been deeply divided over the EU.

Since the referendum, the battle has been between those wanting a clean break and full national sovereignty and those favoring a “soft” Brexit ensuring close trade and other ties with the EU’s remaining 27 members.

The white paper will not look much like the promises that the “Leave” campaign made in 2016. Two top Brexiteers, David Davis and Boris Johnson, resigned from the cabinet this week after a critical meeting last Friday set a new direction for negotiations.

At that meeting, Ms. May came down on the side of a much softer Brexit than she had envisaged earlier, with the prospect that Britain might remain tied to the EU in many ways for years, or even indefinitely. 

What is all the fuss about?

Brexit has been, and remains, an almighty mess for which there is still no clear outcome.

Those who want to leave the EU focus on the issue of sovereignty. If Britain was out of the EU, they say, Parliament could take back control of immigration (ending EU citizens’ automatic right to live and work in Britain) and make its own laws regardless of the European Commission in Brussels; London would pay little or nothing into the EU budget; and Britain could strike its own independent trade deals.

They have made it sound easy. But if Britain were no longer part of the EU single market and its goods and services were treated like imports from any other third country, they would face tariffs and other barriers, customs inspections, and all sorts of other disadvantages.

So a “softer” Brexit, which seems to be winning favor among Conservatives, might involve Britain staying in a customs union with its former EU partners. The new cabinet deal foresees Britain sharing “a common rule book” with the EU’s single market in goods (though not in services, which make up a big chunk of the UK economy).

British business is keen to see as smooth a Brexit as possible with as few changes as possible to current arrangements. But major manufacturers are threatening to move factories and jobs to the European mainland if negotiations go badly and Britain crashes out of the EU with no deal.

Meanwhile the opposition Labour Party is no less divided than the Conservatives about what Brexit should look like, though it is expected to vote against any government plan.

The fight over Brexit has taken up the lion’s share of politicians’ time and attention for two years, but the public seems generally fed up with the endless debate. Polls show that opinion has shifted, but only slightly: In the referendum, 52 percent favored leaving the EU and 48 percent wanted to stay. Those figures are now reversed.

How does the European Commission see things?

Britain’s EU partners are bemused by the disarray in London and by British politicians’ lack of real engagement with the issues at stake. (Mr. Davis, the minister for exiting the European Union, had spent only four hours negotiating with his EU counterpart this year before he resigned.)

The EU has said that it wishes “to have the United Kingdom as a close partner in the future,” but Brussels will not allow Britain to enjoy the same benefits outside the union that it has as a member.

At the core of its negotiation position are the four pillars of the single EU market: freedom of movement for goods, services, capital, and people. It insists they are indivisible – there can be no “cherry picking” of rights.

That bodes ill for the agreement that May strong-armed through her cabinet on Friday, which envisions a single market for goods, but no free movement for people or services. All the prime minister can hope for is to persuade Brussels to compromise on the principle of indivisibility.

So far, the EU27 have remained united behind the European Commission’s chief negotiator, Michel Barnier. British hopes of convincing some governments to push for kinder treatment have come to naught. Mr. Barnier has largely succeeded in securing the future for the 3 million EU citizens living in the UK; Britain has agreed to pay a $50 billion divorce bill; and more concessions from London are expected before a deal is sealed.

What’s the problem with Ireland?

On Good Friday 1998, the British and Irish governments signed an agreement putting an end to 30 years of violence over Northern Ireland’s constitutional status within the UK. As part of the deal, the Irish Republican Army put down its weapons.

Today, because the UK and the Republic of Ireland are both members of the EU, the border between Northern Ireland and the Republic of Ireland is purely notional. There are no ID checkpoints or customs posts anywhere. This fluidity has done much to cement peace.

Dublin, backed by the EU, is insisting that Brexit should do nothing that might endanger the Good Friday accord. That raises the question of how to manage the UK’s only land border with the EU.

London agrees that there should not be a “hard” border and hopes that, if Brussels accepts Britain as a member of the EU single market for goods, there will be no need for one.

If not, though, the UK has come up with several schemes of varying complexity and technological feasibility to make cross-border trade friction-free. Brussels does not think any of them will work though, and is insisting on a “backstop” arrangement until the border mechanics are in place, under which Northern Ireland would remain fully in the EU customs union and single market.

But Northern Ireland’s Democratic Unionist Party (DUP), part of May’s parliamentary majority, will not countenance the creation of a border between Northern Ireland and the mainland. Without such a border, the whole of the UK would be obliged to have the same status as Northern Ireland – fully in the EU customs union and single market – which would prevent London from signing its own trade deals with other nations.

This conundrum remains unsolved.

How will all this end up?

Quite frankly, nobody has a clue. May might survive as leader of the Conservatives, and thus prime minister, but she has been weakened by the cabinet resignations and there is a chance she could be unseated.

The EU and Britain might reach an agreement on time, but as the clock ticks there is a growing likelihood that London could crash out of the EU with no deal at all. Such an outcome would most likely be disastrous for the British economy, and would hurt the EU economy too.

If a deal with the EU is done along the lines of the Chequers plan, it is by no means certain that May could count on enough votes in Parliament to turn it into law. But neither do the hard Brexiteers have sufficient parliamentary support to carry their vision.

Some supporters of the “Remain” campaign are pushing for a second referendum, in the hope that voters might change their minds now they have seen the practical implications of pulling out of the EU. Some Brexiteers, the Remainers suggest, might decide the deal that May is pursuing is worse even than staying in the union because London would be tied by EU rules in many fields but would have no voice in setting those rules.

At any rate, the withdrawal deal must be signed by the end of the year to give time for Parliament to approve it, for EU national leaders to ratify it, and for the European parliament to give its assent by March 29, 2019.

Assuming that Britain does leave the EU on that date, it will then enter a 21-month transition phase, during which the two sides will hold fully fledged trade talks. During this period, most aspects of British membership will remain in place, as if nothing had happened.

And the transition could stretch indefinitely into the future. The US and Canada installed a less ambitious version of the high technology that Brexiteers propose to use in order to speed up the customs procedures that will be needed after Brexit. It took decades to develop.

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