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Theresa May’s provisional EU deal is deeply obscure.  On the money, we are not convinced that anyone outside the negotiation really knows exactly what will be paid when.  On the UK-Ireland border, the two parties have effectively agreed to disagree until further notice.  On the ECJ, much may depend on what it does if and when cases are referred to it by British judges.  All this helps to explain why ConservativeHome didn’t rush to declare the agreement a triumph or a disaster.

One conclusion, though, is certain.  If one is trying to strike a trade and security deal, compromises will inevitably have to be made.  This applies irrespective of whether the negotiation in question is being carried out with, say, America, or with the EU.  Since this is so, it follows that in this case neither the UK nor the EU will get everything it wants – a truth that applies as much to the latter as the former.  For example, the EU’s original position was that the former should not conduct post-Brexit criminality checks on EU citizens systematically, and that EU nationals who commit crimes after we have left should be treated under EU law.  It climbed down on both.

Above all, perhaps, the deal passed the “sufficient progress” hurdle, which means that future trade arrangements with Ireland will be part, as they always should have been, of a wider discussion about those arrangements with the rest of the EU27.  It was always a nonsense to put the Irish cart before the EU27 horse, and no longer to do so was a key UK objective, now achieved.  But whatever you think of the agreement, three important points about the wider context have become clear this year.

First, there is no appetite at the moment in the Commons for the WTO alternative to a fully-fledged free trade deal – and not a lot among Tory MPs, even those who backed Brexit.  It is hard to get to the bottom of why in that last case.  Taking the WTO route is not, repeat not, this site’s preferred option, since it would provide less easy access to the Single Market than a good trade deal.  But it has its upside.  If one wants the capacity to achieve tax, social and regulatory divergence from the EU, the WTO option is by far the most straightforward means of gaining it.  It sits naturally alongside the vision of Britain as Singapore-in-the-Atlantic that is held by many Tory Brexiteers.

Perhaps the explanation is that most Conservative MPs, like our panel of Party members, think that May was right to sign this month’s agreement – and believe that real progress is being made.  Maybe there is a sense of relief that trade talks are now looming into view.  Perhaps the fear of a far-left Labour Government is making them fall into line.  Most likely, all are true.  This site also detects a certain war-weariness, among Brexit backers, Remain partisans, and voters more widely.  There is hunger for agreement.

Second, we have learned, if only this month, that the EU wants a deal.  That we could not be sure before says much about how thin British media coverage of the EU is compared to the thickness of the resources that it lavishes on Westminster.  Lobby correspondents usually outnumber Brussels staff.  If, say, David Davis states a view, it will be probed and prodded for ulterior motive.  If Michel Barnier does the same, it is far more likely to taken at face value.  The Westminster culture is one in which British politicians are fiercely tested by the media; one cannot say the same of its equivalent in Brussels.

For this reason, it was possible to believe that the Commission, together with the EU27, was set on declaring that “sufficient progress” had not been made – in order to try to provoke a run on the pound, capital flight, a media panic, and pressure on May.  That fear proved groundless.  The EU has enough problems on its plate at present (consider the Poland crisis) without wanting another one on its north-western frontier.  It has no appetite for Prime Minister Corbyn – or Johnson.  And it has a commercial stake in a deal.

If that second point sounds like good news for the UK, the third is a sobering corrective.  That the EU wants an agreement doesn’t necessarily mean that it will sign up to one that will suit us.  And the unswervable truth is that it has controlled the negotiating battlefield right from the start – whoever you think won this month’s fight. Last June’s election didn’t give May the majority she needs to walk away from the talks if she wants, at least as matters stand.  Perhaps it was never going to give her the landslide that at one point seemed within reach.  But we will never know: the social care pledge, plus obscurity on winter fuel payment reform, put pay to the chance of one.

So it came about that a barrier to progress in the talks was erected – “sufficient progress” – that should never have there in the first place.  The best of six months worth of time has been wasted.  The EU now proposes to discuss transition before trade.  It reportedly wants to give legal effect to the deal signed last month, which would surely cause another negotiating wrangle.  And all the while, “the clock is ticking”, as Barnier put it.

While it is therefore possible, and even likely, that an outline trade deal will be reached by, say, late next year, it is very unlikely indeed that it will be fully-formed: under this scenario, there will be “heads of agreement”.  Which means that negotiations will carry on past March 29 2019 into the transition period.  Which means in turn that it will not be what May calls an implementation period.  How could it be when there is not a trade deal to implement?

The main danger to a workable Brexit is not that the Government will shell out non-transition money early to the EU, thus erasing its negotiating leverage.  Nor is it that it will fold on the stipulation that “nothing is agreed until everything is agreed”.  Nor is it that Cabinet debate will come down on the side of shadowing Single Market rules in perpetuity.  It is, rather, that once the UK gets into transition, the Government may find it very difficult to get out of it.

Its length has yet to be determined.  Barnier says it should end in 2020.  May would apparently like it to last a bit longer.  That presumably means the spring of 2021.  Many of readers will spot the problem.

Namely, that the Government would, in these circumstances, face the choice of either coming out of transition a year before the election, to another chorus from the Remain coalition about “falling off a cliff edge”, or not doing so – and enraging the Leave coalition, including pro-Brexit Tory MPs.

If there is a lesson in recent years, it is that predictions are futile.  But one can prepare for possibilities.  That of being stuck in transition is real.  So it the chance of not entering it at all – because negotiations turn sour, and attitudes to WTO among Conservative MPs, and in the Commons more widely, become more sympathetic.  The conclusion is obvious.  May must prepare for all outcomes, including No Deal.  Preparations must intensify rather than slacken.  Part of them is to give contigency preparation its own quasi-department and seat at the Cabinet table.  And for the latter’s Strategy and Negotiations sub-committee to operate more like a wartime Cabinet.

218 comments for: A big Brexit point for the future. Britain must not get stuck in transition.

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