Wednesday

24th Apr 2019

Opinion

May's Florentine foray: A step towards irrelevance?

  • Theresa May had demanded to discuss divorce and trade in parallel, yet was forced to back down. (Photo: Reuters/Peter Nicholls)

When Theresa May selected Florence as the setting for her major speech on Brexit last Friday (22 September), she did so for its cultural and historic significance.

In the birthplace of the Renaissance, the UK prime minister hoped to regenerate the Brexit process by striking a conciliatory tone and appealing to both sides' sense of economic rationality.

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In practice, May outlined a series of concessions, which, while light on detail, paint some picture of the direction the negotiations will now take. Whilst unintended, the speech also sets the tone for the longer-term relationship between Britain and the EU.

In broad brushstrokes, the following conclusions might be drawn:

Deal unlikely by 2021

The purpose of the proposed two-year transition period is to buy time for the government to agree - what it hopes - will be a bespoke trade arrangement.

Yet, the complexity of this deal would dwarf any the EU has yet agreed. The most intricate trade arrangement involving the EU is with Switzerland. This took a full eight years to agree and ratify. For Britain - a larger country with a more diversified economy - this would take considerably longer.

To pre-empt this obvious criticism, the prime minister suggested inclusion of a so-called 'double-lock'. In theory, this means that after 2021, the transition period could not be further extended. However, in the likely context of 'no deal', pressure for an extension would be intense. This promises to be the hot topic at the next elections.

But there is also the question of logistics. Single market membership affords automatic free trade access to 60 countries globally. Failure to replicate these deals would be to hinder British trade globally.

But, to do so would require a particularly time-consuming bureaucratic effort, for which the UK is unprepared. Britain has not negotiated free trade agreement since 1973 and lacks the technical expertise to effect something of this scale, so soon.

Altogether, these factors would suggest a period of negotiation longer than the four years now earmarked.

Trade may yet come first

The prime minister again quipped about her preference for 'no deal' over a 'bad deal'; and alluded to the primacy of the immigration question. Yet this would seem irreconcilable with the demand for a transition period.

Rather, it suggests a realisation within her cabinet that the economic costs of losing single market access will be prohibitive.

By raising trade barriers with its main trading partner, the UK would experience a negative supply shock, with ruinous implications for its competitiveness. Such a measure would weaken the productive output of the British economy and thus run contrary to the national interest.

The implications of such a choice would become clearer to voters the longer the Brexit negotiations drag on, presaging a shift in public opinion. As these costs become clear, British voters may prove the major obstacle.

Like a Giotto fresco taking shape, the picture is emerging of a Britain struggling to effectively disentangle itself from the single market.

Britain will continue to supplicate

Since negotiations began in June, the EU has remained steadfast in its positioning on Brexit. The UK, on the other hand, has taken several steps in the direction of concession.

First is the question of money. By agreeing to meet its EU budgetary obligations throughout the transition period, the British government has paved the way for further concessions on the divorce bill.

Next comes the sequencing of negotiations. The prime minister had demanded to discuss divorce and trade in parallel, yet was forced to back down. Now, we see attempts to buy time, despite previous allusions to the desirability of a fast Brexit.

These concessions shed uncomfortable light on the relative strength of the two sides. Leading Brexiteers have long argued that the EU lacks the unity to exert pressure on Britain during the negotiations. In truth, the 27 member states appear more united on Brexit than the British political class.

The UK, in the face of the EU's collective clout, has been exposed for what it will increasingly become after Brexit: a weakened power in the international system, reliant on a neighbouring bloc, over whose laws it holds no sway.

A softer, slower Brexit

Whilst designed for a different purpose, the Florence speech exposed an uneasy truth: that the Brexit vote has reduced Britain to the status of supplicant vis-à-vis its largest market. If Florence offered a vision of Britain's status in a post-Brexit world, it is one of increasing dependence.

Just as Plantagenet England looked to Florence and Italy in the late Middle Ages, modern Britain will continue to rely on Brussels and the EU for its economic sustenance. In an era of large trading blocs and economic interdependence, this should involve no shame.

However, with Britain choosing to leave the EU, it has reneged on its right to influence and shape the trade policies that will tomorrow govern it.

The absurdity of Brexit is that all future arrangements will leave the country worse off than now.

A quick-fire hard Brexit - for instance, leaving the single market and customs union - represents the worst of all.

Long after the legal date of Brexit and any free trade agreement is signed, the EU will continue to represent Britain's largest market. This is a question of geographic and geopolitical certainty. Hard Brexit will hinder access to that market and limit any influence over it.

A softer slower Brexit is the best of a bad set of options. But it remains a poor one with serious implications for the country's global influence.

In Florence, the prime minister confirmed a slower - if not softer - Brexit. This might at least give the British people time to draw breath, and perhaps rethink.

Michael Cottakis is a political scientist and director of the 1989 Generation Initiative at the London School of Economics (LSE).

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