Brexiteers will be waiting a long time for the EU27 to re-open the withdrawal agreementby Guy de Jonquières / February 4, 2019 / Leave a comment
The conventional wisdom in Westminster and Brussels is that Theresa May is on a hiding to nothing in her efforts to persuade the EU to reopen negotiations on the withdrawal agreement. However, supporters of a hard Brexit insist they know better. All Britain need do, they say, is to keep its nerve and stand its ground because the EU always gives in at the very last minute. As David Davis once put it, “we know from past experience that the EU always leaves agreement to the final moment possible at the 11th hour.”
That claim may rally Brexit true believers and sound comforting to those who have never seen EU negotiators in action. There is just one problem: there is little or no credible historical evidence to support it.
As a journalist who spent four years in Brussels and more than a decade covering world trade policy, I can think of only one instance that suggests the Brexiteers might, just, have a case. That was when the EU belatedly dropped some highly contentious demands at the 2001 WTO ministerial negotiations on the Doha trade round in Cancun, Mexico, in a bid to stop the meeting—and the round—collapsing. Moments afterwards, the meeting collapsed anyway. The round died later.
However, Doha was a multilateral exercise, in which the EU was just one of more than 150 delegations around the table, each with an equal say. The UK withdrawal negotiations involve only two parties. And their dynamics, like those of the EU’s one-to-one trade dealings with third countries, are very different.
In most bilateral negotiations the EU is much the biggest party—as it is in its dealings with Britain. That gives it a natural advantage, especially in trade talks, the one diplomatic arena in which the EU packs a big punch. The sheer size of its market means it is more often sought after as a partner than it is a seeker of deals. Its economic muscle also confers considerable bargaining power.
That does not, of course, mean it always prevails. But when negotiations become bogged down, the EU does not simply give in, because it does not need to: it can afford to sit things out until prospects for agreement improve. EU negotiations with India have dragged on inconclusively for 11 years and those with Mercosur, the four-nation customs union, for 19. Negotiations on post-Brexit trade arrangements with the UK—if they happen—may follow a similar pattern.
In trade talks, of course, there are no immutable deadlines. A fixed date, however, has been set for Britain’s departure from the EU. Maybe the closest comparison, therefore, is with the EU’s handling of the Greek debt crisis, which financial market pressure turned into a race against the clock. Brussels did compromise a bit at the end in order to seal a deal. But Greece also compromised as much or more.
However, in that instance the EU was dealing with one of its own members, with which it had to maintain a modus vivendi, not with a departing member eager to sever its links with Brussels and become an independent third country. Even more important, failure to settle with Greece quickly would have risked triggering an uncontrollable chain of events that could have plunged the entire eurozone into crisis and even caused it to collapse.
To suppose that the Brexit deadline will concentrate minds in EU capitals equally powerfully, it is necessary to believe that the prospect of no-deal will strike sufficient fear into 27 member states to force them to compromise. That, however, is far from certain.
A no-deal Brexit would, of course, be likely to create economic shockwaves. The impact on individual EU members would vary. But only in Ireland would it be anywhere near as severe as in Britain, because UK exports and economic output depend far more heavily on access to the EU’s market than the other way round. And for most EU governments, maintaining the integrity of the single market matters more than avoiding loss of trade with Britain.
In any case, many EU members appear better prepared to cope with the fallout from no-deal than Britain, where warnings of paralysis at ports and possible food and medicine shortages are multiplying, and the government has hinted that it may seek to delay departure in order to buy time to enact essential Brexit-related legislation.
A further problem with the Brexiteers’ claim that Britain can win just by standing firm arises, ironically, from their oft-repeated complaint that the EU is so unwieldy and its internal political machinations so complex that they prevent it striking deals. As it happens, that accusation is false: the EU has concluded more than 60 free trade deals with about 40 countries and has more than 500 international treaties and agreements governing aviation, product standards and more.
However, by pressing for a reopening of the Brexit withdrawal agreement, the Brexiteers’ complaint risks being proven right. If the EU were to agree to return to the negotiating table, its members might well then demand that Britain concede on a long list of other issues: Spain might insist on a resolution of its long-standing claims on Gibraltar. That would not only place Britain in an awkward position; it could lead to negotiations becoming hopelessly ensnared in disagreements.
There is, nonetheless, one possible scenario in which EU members might be ready to consider softening their position. It would be if they judged that a no-deal Brexit would plunge Britain into chaos, paralysing its economy, triggering political instability, civil disorder and a permanent lurch into surly non-co-operation. None of the 27 governments would relish having to cope with such a troubled and potentially disruptive near-neighbour.
But if that prospect induced them to change course or give ground, it would not be because Britain had stuck to its guns and gained the upper hand; it would, rather, be because they judged that their own interests and those of the EU compelled them to lend it a helping hand to avoid falling down a deep hole of its own making.