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Saturday, 17 November 2018

The Brexit illusions shattered by Theresa May’s impending deal (FT)

FT title: The Brexit illusions shattered by Theresa May’s impending deal

FT subtitle: Harsh realities of UK’s position exposed by withdrawal agreement

Opinion by the Financial Times Editorial Board

“Two-and-a-half years after the UK’s fateful decision to leave the EU, Theresa May has struck an agreement on the terms of departure. The economic costs are plain to see; the painful compromises all too apparent.

Advocates of the deal argue that the prime minister is respecting the outcome of the referendum. But this is hardly cause for celebration. The draft deal shatters the illusions about Brexit: the idea of a clean, quick break from the EU; the notion that a new trade deal with the EU would be simple and achievable by the end of 2019; and the Panglossian view that there could be nothing but good in a new, albeit undefined, relationship.

Unwinding four decades of economic, trading and legal ties was never going to be straightforward. The UK had a weak negotiating hand and the May government has played it poorly. It was irresponsible to announce prematurely that the UK had no interest in maintaining membership of the single market and customs union — given the importance for business, jobs and economic growth.

Contrary to the May government’s hopes of playing divide and rule in the Brexit negotiations, the EU27 stuck together. Ireland was not abandoned and the Brussels negotiators led by Michel Barnier brushed aside British attempts at cherry-picking the benefits of membership.

Compared to remaining in the EU, there is no doubt that Mrs May’s deal is manifestly inferior. It moves the UK away from its most important trading partner while giving it less say over the rules that govern its economy. The UK has swallowed a lot of thin gruel, but on balance it is probably the best deal available given the prime minister’s self-imposed red lines.

The outline of the agreement has been clear for some time: a €40bn-45bn divorce settlement, a 20-month standstill transition period that could be extended, broad but non-binding commitments on the future relationship, plus a “ backstop” for the Irish border that will potentially keep the UK in a customs union for years. The backstop is problematic and may prove too much for some unionist MPs.

There is little enthusiasm for Mrs May’s deal. But the talk of “betrayal” by some Brexiters is nonsense. The real betrayal is by those who promoted falsehoods during the referendum, such as the prospect of Turkey joining the bloc and an immediate windfall from savings on the EU budget. Yet Britain and its politicians remain profoundly divided. Divisions over Europe have been building up for decades and were exposed during the referendum. No deal can resolve these tensions.

For businesses, the tentative Brexit deal pushes back uncertainty but it does not eliminate it. If a deal passes parliament, there may be a brief uptick in investor confidence. But there is little long-term detail — Brexiters and Remainers are correct to argue that the UK’s future relationship with the EU is in limbo. Clarity is unlikely to arrive until the middle of the next decade. Business might be able to plan until the end of 2020, but another cliff edge looms.

The critical issue now is whether Mrs May’s deal will be accepted by MPs. It faces a broad coalition lining up to reject it: from hardline Brexiters such as Boris Johnson to concerned Remainers including his brother Jo. MPs must carefully examine the withdrawal deal, running to more than 400 pages, along with loose commitments on the future relationship. Ultimately they will have to consider what course is in the national interest: not only Britain’s economic future but also its international reputation and political stability.”

Source: https://www.ft.com/content/c6eef948-e80d-11e8-8a85-04b8afea6ea3

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