While Brexiteers believe the threat of “no deal” increases British leverage, the EU calculates that it increases its leverage and is therefore happy to play along. The result: an inevitable crisis.
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For a country yearning for the three-year saga to just be over, it is a potentially appealing pitch. It is also almost entirely misleading.
While Johnson is right to say the U.K. could legally be out of the EU within weeks of an election result that returns a majority Conservative government on December 12, the reality is that this only closes the first chapter in the Brexit drama and opens up the next (and Chapter 2 is already beginning to look a lot like the first).
As soon as Britain leaves the European Union, under the terms of the divorce settlement Johnson negotiated with Brussels, two brand-new deadlines immediately loom into view. First, the U.K. government must decide by July 1 whether or not it wants to extend the so-called transition period, which essentially keeps Britain inside the EU’s economic bloc for a temporary period to avoid a “cliff edge” economic shock while it negotiates a free-trade agreement.
Despite the short window, Johnson has ruled out extending the transition period, claiming 12 months is plenty long enough. Brexiteers argue a U.K.-EU agreement is much simpler because the two start with total alignment of standards and regulations, given Britain’s membership in the EU single market. Yet this fundamentally misses the point: Any future trade deal will be concerned with how far Britain and the EU wish to diverge from each other—and to what extent divergence should reduce each other’s market access. Most trade deals are about bringing two economies closer together, not managing their slow drift apart, and therefore such a negotiation is fraught with political and technical difficulty.
Despite the time constraint, Johnson is under political pressure to rule out extending the transition period. His Conservative Party’s euroskeptic members of Parliament argue that the transition arrangement is a necessary evil, but one that should not drag on, because it amounts to “vassalage”—accepting EU law without voting rights to shape that law.
If no trade deal has been agreed on and ratified by December 31, 2020, Britain may leave the EU’s single market and customs union on simple “World Trade Organization terms”—the loosest, most basic form of trading relationship, stripping the U.K. of any preferential trading relationship.
According to former and current officials who spoke to me and asked for anonymity, it’s now almost inevitable that there will be another Brexit crisis late next year (should Johnson win the election) because of these deadlines.
If Johnson refuses to request an extension by July, foreign-policy and trade experts in Brussels and London who spoke to me said it was all too obvious how the following six months will play out. First, Johnson will attempt to use the threat of “no deal” to pressure the EU to give into his demands for a quick and simple trade deal. However, according to two serving and former diplomats who spoke to me, the EU is likely to respond to such threats by turning the tables on Johnson by using the ticking clock to do the exact opposite—piling pressure on London to sign up to its demands, principal among them the so-called level-playing-field provisions—legal commitments written into most free-trade deals to maintain certain mutually agreed on social, environmental, and economic standards. Supporters of such provisions insist they are necessary to avoid a race to the bottom in rights and standards and protect businesses from unfair competition. Put simply, the EU does not want to see the U.K. suddenly adopt radically lower standards that give its businesses a competitive advantage.
Put simply, while Brexiteers believe the threat of “no deal” increases British leverage, the EU calculates that the threat increases its leverage, and is therefore happy to play along. The result: an inevitable crisis. If history repeats itself first as tragedy and then as farce, the tragedy of the past three years of protracted and bitter negotiations is that it was all so predictable. The farce is that it might be about to happen all over again.
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