Negotiating the future relationship with Britain is going to be difficult for the EU. Time pressure is acute, interests diverge, and the UK’s Brexiteers now have a much stronger political hand.
After the Brexit negotiations is before the Brexit negotiations. The first phase was difficult enough. The major difficulties stemmed from the UK’s side: Theresa May suffered more parliamentary defeats than her five predecessors together, and Boris Johnson also lost his theoretical majority within a few weeks. Only the snap elections at the end of 2019 provided clarity, after which the United Kingdom was able to leave in an orderly fashion after all on January 31, 2020.
The EU-27, on the other hand, were characterized by unusual unity. The Withdrawal Agreement secured the rights of EU citizens in the UK and the British commitments to the EU budget, and set a transition period until the end of 2020 and how to deal with the special situation in Northern Ireland. However, only the divorce issues of this complex separation are sorted out, with the exception of Northern Ireland. Now the real question of the Brexit needs to be answered: under what conditions should the EU cooperate with this ex-member, Europe’s second largest economy and a close NATO partner?
The political context for the next negotiations has changed significantly. First, Brexit has become irreversible, at least in the medium term. Until the end of January, remaining within the EU was still a possible outcome for the UK. According to the ruling of the European Court of Justice, London could have withdrawn the withdrawal notice at any time before the country had formally left the EU. The opponents of Brexit therefore focused on a second referendum: time and again, MPs in the House of Commons fought over whether Brexit should happen at all, and less about what should happen afterwards. This political struggle has now been decided.
Second, the negotiations are taking place under even greater time pressure than before. Article 50 set a two-year deadline for the withdrawal negotiations, which because of the internal political blockade in London had to be extended three times in order to prevent a no-deal Brexit. Partly because of these extensions, the transition phase set for the end of 2020 shrank to just eleven months, during which the future relationship is now to be negotiated. This is very ambitious compared to the average duration of about five years in EU free trade negotiations.
Moreover, the post-Brexit agreement is intended to regulate many more complex areas: economic cooperation in all its facets (goods, capital, services including financial ones, data, energy, mobility of persons, transport, aviation, fisheries), internal security (operational cooperation, data exchange), external security (foreign policy coordination, sanctions, CSDP operations) and a common institutional framework. Nevertheless, Prime Minister Johnson has publicly rejected the legally available option of extending the transition period and had it anchored in law that the UK shall not use it.
Danger of a No-Trade-Deal Brexit
The negotiators will thus have to finish a new accord within the remaining few months. At the end of the transition period, however, the threat is no longer a chaotic “no-deal Brexit”—after all, the UK has already left the EU in an orderly fashion. Instead, “only” a no-trade-deal Brexit looms, i.e. the UK leaving the EU single market and customs union without a trade agreement in place. It would be possible to avoid major chaos, but the economic consequences of the reintroduction of customs and border controls between the EU and the UK would be significant, in particular for the UK. However, London is playing down concerns about this outcome: Johnson now speaks of an “Australia model” as an alternative to a trade agreement. Australia does not have a fully-fledged trade agreement with the EU, but it does have arrangements for regulated dealings, for example regarding aviation. The political conclusion is paradoxical: precisely because the consequences of a no-trade-deal Brexit are less than those of a no-deal Brexit, political inhibitions are lower so the scenario has become more probable
Last but not least, the domestic political conditions in London are completely changed. Until December 2019, the British government, parliament, and society were deeply divided on Brexit and could not agree on a clear negotiating position. Compromises agreed by the UK government in Brussels rarely survived the infighting in the Conservative Party. The House of Commons in particular rejected a no-deal Brexit, but also voted down the Withdrawal Agreement, a second referendum, or any other Brexit option.
No Tory Rebels Left in Power
Although British society is still divided—a narrow majority now views Brexit as a mistake—the Brexiteers have achieved a resounding domestic success. With the slogan “Get Brexit Done,” Johnson captured the mood of the British electorate and won a clear majority in parliament. The much-contested ratification of the Withdrawal Agreement became a formality. At the same time, Johnson decisively triumphed in the Conservatives’ internal power struggle over their European policy, which has lasted for over 30 years. All members of the government and Tory deputies have had to subscribe to a policy of hard Brexit. Since the latest reshuffle, all major ministerial offices in cabinet were given to politicians who supported Brexit before the 2016 referendum.
It is symbolically important that none of the Tory rebels who pushed through the anti-no-deal legislation against the will of the government in autumn 2019 made it back into the House of Commons. Domestically, Johnson now has a largely free hand to set his Brexit policy. The only restraint may come from Northern Ireland and Scotland, as a hard Brexit would exacerbate the pressure on the union of the British state. Nevertheless, the direction for the UK government seems clear—a full break with the EU, with a regular free trade agreement but no conditions that would prevent the UK from setting its own standards, laws, or autonomous trade policy.
The EU and the United Kingdom are thus facing a different round of very critical negotiations. Unlike before, the line of conflict will no longer run through the British Parliament, but between London and Brussels. Although many structural factors are similar, this different political dynamic will fundamentally change the next phase of the Brexit negotiations. Therefore, the EU should not make the mistake of uncritically maintaining its—so far successful—approach. In the short time available for the negotiations, the EU-27 face four strategic challenges.
Developing a UK Model
The overarching challenge is to find a new model for cooperation with a large European third country that does not want to integrate into the EU. Until February 2020, the EU has avoided defining this model and retreated to the position that future relations with the United Kingdom could only be negotiated after the United Kingdom has withdrawn. Politically, the chaos in London and the possibility of a second referendum contributed to the fact that the EU-27 did not have to answer this question. In consequence, the most crucial matters of Brexit remained ambiguous in the first phase of negotiations, with the legally non-binding “political declaration” only sketching in what areas the UK and the EU want to cooperate in the future.
Now Johnson has clearly expressed a preference for a model with the greatest possible distance from the EU. He has also distanced himself from May’s ambitions to negotiate at least frictionless trade in goods, if not services. All the “soft” models of Brexit, from a customs union to deeper access to the internal market, are thus politically off the table. The EU member states, in their mandate for the next phase of the Brexit negotiations, are also aiming for a regular free trade agreement.
Viewed positively, there is thus common ground to start from. However, due to the UK’s geographic proximity, its economic size, and its close economic links to the EU after almost 50 years of joint membership, the EU and its member states want stricter provisions in terms of a level playing field than in other comparable trade agreements. Within the short time frame, the negotiators will therefore have to develop a new “UK model” of partnership―a new balance between close partnership, British and EU sovereignty, more limited access to the common market and to EU programs, and corresponding obligations.
Expanding the Barnier Method
Closely related to this is the second strategic task: to preserve the unity of the EU-27. In the first phase, the EU-27 succeeded in asserting their interests in part because they were more united than ever before. This unity was based on two factors.
On the one hand, the EU institutionally developed a clear, consistent negotiating line with the “Barnier method.” The European Commission and its chief negotiator Michel Barnier were given sole responsibility for the negotiations, and national governments did not conduct their own bilateral negotiations with London. At the same time, Barnier kept everyone on board with high transparency, a lot of technical coordination at the working and political level as well as very regular reassurances of support from the national capitals. On the other hand, the EU-27 also benefited from the political framework of the Article 50 negotiations, in which they were able to agree on a common objective—to protect the integrity of the EU and the internal market—with solidarity toward the special concerns of individual member states (Ireland in regards to its border to Northern Ireland, Central and Eastern Europeans in relation to their citizens in the UK, and so on).
In the negotiations now to come, the Commission will continue with the same method, as Barnier has been re-appointed and given a new mandate. Technically, the EU-27 are again very well prepared. However, it will become more difficult to maintain political unity. The EU-27 will have to make a dual strategic choice— both in terms of the trade-offs outlined above, but also of the priorities to be negotiated in the short transition period. The mandate that the EU states have given to the Commission is extensive, partly because they have not yet been able to decide between different priorities of the member states. Should the focus be on fisheries (important for North Sea countries), the level playing field (important for EU countries with strong economic ties to the UK) or security cooperation (important for Central and Eastern Europe)? Confronted with a British government that is strengthened at home and prepared to play off and promote differences between EU member states, the EU-27 therefore needs, in addition to good technical preparation and negotiation management by Barnier, stronger political coordination of the national governments.
The third strategic challenge lies in a potential struggle with the United States over Britain’s trade, but also foreign and security policy anchoring. With Brexit, the UK is losing its already weakened role as a “transatlantic bridge.” Instead, London needs to reposition itself. From a European perspective, it is important to prevent London from turning fully toward the US.
In trade policy, triangular negotiations are on the agenda for 2020—the UK wants to negotiate simultaneously with Washington and Brussels, and the EU and the US government have also begun talks on a (less ambitious) trade agreement. Although the UK trades much more with the EU than the US, a quick agreement with Washington is of the utmost political importance for the Brexit proponents. US President Donald Trump also has an interest in a success before the US elections in November 2020. Publicly known US negotiating goals include opening up the UK markets for US products that would not be admissible under current EU regulatory standards. Similarly, the EU wants to establish level playing field provisions to ensure that existing European standards are maintained in the UK, if not—as demanded by some national governments—a “dynamic” alignment to EU standards. London wants to use these triangular negotiations to its advantage. The EU will thus also have to consider the global dimension in the negotiations with the British government. Protecting existing standards, for example, may be more in the European interest than a very hard negotiation stance insisting on dynamic alignment, and thus driving London into the arms of Washington.
Albeit under different circumstances, this also applies to foreign and security policy. Remarkably, since 2016, the British government has taken a stronger European stance on foreign policy issues where the Trump government and the majority of Europeans differ. This applies, for example, to dealing with Iran, the Paris Climate Accords or, most recently, Huawei in 5G infrastructure. So far it has also been possible to separate tensions in the Brexit negotiations from foreign policy cooperation. Even after Brexit, the EU states, above all Germany and France, have an interest in involving London in foreign and security policy. This will not, or only to a very limited extent, be achieved through the EU institutions, where the UK as a third country cannot have a seat. What is needed here is close bilateral and multilateral cooperation such as the E3 group on Iran, without undermining the EU framework.
Forging a New Partnership
The forthcoming negotiations with London will be difficult and again tie up a lot of political energy and attention in the EU. The pressure on the unity of EU-27 will increase. The changed political dynamic in London also means that the risk of a domino effect is returning. Until now, the chaos in London encouraged a perception of Brexit as a deterrent in other EU countries. Now Johnson is the political winner, at least domestically, whereas negative economic consequences have not (yet) materialized to such a large extent. In the medium to long term, the UK can become a close partner, but also an economic and political counter-model to EU integration. Even now, hard-core Brexit supporters argue that London should support euroskeptics across Europe.
The EU’s response to this challenge cannot be to “punish” Britain by making negotiations as tough as possible. While the EU should draw a clear dividing line between membership and partnership, it has a vested interest in placing the partnership with London on a lasting and successful footing. The fourth strategic task is therefore ultimately the most important one for the EU: strengthening itself and increasing the attractiveness of EU membership. After all, the best response to the challenges posed by the Brexit would be to demonstrate the advantages of the successful model of European integration.