Monday , October 21 2019
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Brexit: Stuck

Summary:
Has Brexit gone so far down the rabbit hole of UK party politics that there is no coming out the other side? Brexit is fracturing the UK’s leading parties, yet there doesn’t seem to be any way for the UK to move forward with the project, nor does there seem to be any politically viable path for the UK to back out by revoking Article 50. I hate to seem simplistic, but consider some important developments: The local elections exposed not only massive dissatisfaction with the Tories, but unhappiness with Labour too. With both major parties losing support because neither one can come up with a position on Brexit that will bridge the significant differences among their members, the UK is becoming even less capable of negotiating credibly or competently with the EU. Thanks to the EU Parliament

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Has Brexit gone so far down the rabbit hole of UK party politics that there is no coming out the other side? Brexit is fracturing the UK’s leading parties, yet there doesn’t seem to be any way for the UK to move forward with the project, nor does there seem to be any politically viable path for the UK to back out by revoking Article 50.

I hate to seem simplistic, but consider some important developments:

The local elections exposed not only massive dissatisfaction with the Tories, but unhappiness with Labour too. With both major parties losing support because neither one can come up with a position on Brexit that will bridge the significant differences among their members, the UK is becoming even less capable of negotiating credibly or competently with the EU.

Thanks to the EU Parliament elections, Nigel Farage is baack…giving Leave extremism a new lease on life. Determined minorities often punch above their weight. Look at the gun lobby and the anti-abortionists in the US. Farage is a mediagenic fount of plausible-sounding but wrongheaded Brexit soundbites. The UK press and public already believe too many false things on the topic of Brexit, and Farage will make sure they take up even more bad ideas. As Chris Grey put it last week:

With the launch of the Brexit Party, a profoundly dangerous and dishonest argument – which has been doing the rounds in Brexiter circles virtually since they won the Referendum – is now being advanced with renewed and growing vigour. Its strength is its simplicity, indeed at the moment it is the entirety of the new party’s pitch: Brexit has been betrayed and democracy thwarted by a remainer parliament and a remainer Prime Minister. It’s a claim which is also, of course, made ad nauseam by Tory Brexiters, and seems to account at least in part for Labour’s continuing Brexit muddle.

Judging by current opinion polls, this argument resonates with, at least, 27% of voters. That figure matters both because it is quite large – certainly enough to bring significant success in the European elections – but also because it is considerably smaller than the 52% who voted to leave the EU. So it probably represents the hard core of the Brexit vote, and consists of people who, most likely, are impervious to any arguments against the ‘democracy betrayed’ argument.

Even if the Brexit Party fails to attract more hard-core Brexit supporters, it will re-energize that faction. And since the press loves conflict, these radicals are likely to get more than their fair share of air time.

The press and MPs continue to appear utterly confused about timing and process. All the debate about a customs union, labor rights, and other hard v. soft Brexit issues are moot until the UK passes the Withdrawal Agreement. Those issues come under the non-binding Political Declaration and won’t be negotiated in any detail or seriousness until the UK is out of the EU, as in has entered into the transition period. When May is finally displaced, which will happen by this December at the latest, there’s no reason to think that even any positions staked out in the Political Declaration will stick.

And also recall another point made only very intermittently in Brexit commentary…if you thought the EU played the UK during the Withdrawal Agreement negotiations, you ain’t seen nuthin’ yet. The post-transition trade deal will be vastly more complex and hard fought.

Again, to stress what ought to be obvious, no passage of the Withdrawal Agreement, no going forward. The EU has made clear it’s not ceding ground on the backstop. So despite all of the chatter among MPs about Norway and a customs union and other bright-sounding ideas for preserving frictionless trade, the UK will remain in a Brexit zombie state until it approves the Withdrawal Agreement.

Yes, the UK could in theory revoke Article 50. But have you noticed that that remains a taboo topic in the media? And on the referendum front, the barmy abdication of Parliamentary duty called a confirmatory referendum (of the Political Declaration + Withdrawal Agreement?) which won’t open up any new options, is now competing with a Second Referendum, which is the only viable political path to get to an Article 50 revocation. But even if MPs had been willing to back a Second Referendum, the EU didn’t grant a long enough extension to allow that to occur.

As Richard North pointed out:

We are still left with the task of negotiating the real deal – the future relationship with the European Union.

But, if we get the full two-year extension, that brings us to the end of 2022, while the next general election is scheduled to be held on 5 May of the same year. That means that the final deal will not be agreed by this government.

Assuming that Labour has a chance of winning, the next government could be led by Mr Corbyn and it could be him that sets the final terms.

Unfortunately, there’s another way of reading the timetable: that the UK is very likely to be “not agreement capable.” The Tories are coming apart as a party. 2022 is likely to bring a Labour win or yet another hamstrung coalition government….which the Fixed Term Parliaments Act perversely would shore up. So an incoming government could tear up substantial portions of a deal underway when the time to stitch up new terms and get the needed legislative approvals would be impossibly tight.

North regards the timetable as unworkable even before considering our scenario of a new government seeking to reopen deal points, and focuses instead on what difficult trade agreement negotiations with the EU would mean for a 2022 general election:

Unless something close to a miracle is concocted, the realisation might begin to dawn that, whatever is on offer, it won’t get close to satisfying UK needs for “frictionless” trade with the EU, and nor will it prevent the backstop kicking in.

More prosaically, since the timescale is unrealistically short, we may find ourselves in a situation analogous to where we have been, where there is insufficient time to conclude a deal – any deal, and we are looking at a new version of a cliff-departure with no working agreements in place. The difference is that there will be no last-minute time extension.

What the electoral consequences of this might be are perhaps easier to predict than a more stable scenario. We can assume that, in this case, the Tories will be hammered for their failure to bring a deal to fruition.

The downside is that Labour won’t be able to offer anything better, leaving both parties facing a potential train wreck….

The cold, hard facts of this situation are that there is no possible scenario on the books that could give the UK the frictionless trade it needs to be able to function. The Norway option, as such, has only ever been a partial answer. It is the raft of additional bilateral agreements, on top of customising the EEA Agreement, which will be needed to make for a functional arrangement.

In terms of VAT, data sharing, security cooperation and participation in EU agencies, any such agreements would take the UK into unknown territory, where it would be asking for a degree of integration and functional rights that under current conditions apply only to fully-fledged EU members.

Not only is there no incentive for the EU to go that far, there is every reason for it to hold back, having said many times that it cannot allow a departing state to enjoy the same benefits as its members.

On that basis, the UK is at some time going to have to bite the bullet, with the realisation that there will be substantial and unavoidable barriers to trade with the EU. It is inescapable that this will put UK firms at a commercial disadvantage, and slow down the physical process of moving goods to the continent.

This may provoke a rebellious mood in the electorate at large – if the predicament is properly understood – which may inject a further element of unpredictability into the electoral equation.

Will the EU throw the UK yet another lifeline on October 31? On the one hand, the EU talked tough before and then wimped out. As we’ve said, interpersonal dynamics matter a great deal in negotiations. Merkel even in her diminished state is still powerful and is also cautious. Macron is a blowhard and reports of the April summit give the impression that he overplayed his hand. The EU, having fallen into its “kick the can” bad habit, would find doing that again to be the path of least resistance.

On the other, EU leaders told the UK not to waste time, yet here we are, nearly a full month into the extension, and no progress has been made. Michel Barnier gave a speech on EU issues a couple of weeks ago and barely mentioned Brexit, and when he did, it was clear that the EU regards Brexit as almost a legacy issue, that the EU feels it has more pressing issues to tackle.

But EU officials probably recognize emotionally, and perhaps even intellectually, that they’ve been put in the perverse position of acting in a guardianship or custodial role as far as the UK and Brexit are concerned. The UK ruling classes have made clear that are they not only too divided to make decisions and binding commitments, but they also lack the comprehension of how trade deals and the EU work to make sound choices even if they were able to get out of their own underwear. It’s as if they were dealing with a schizophrenic, or alternatively, a failed state.

The fact that the EU is not negotiating with anything resembling an equal, but a party incapable of managing its affairs on this topic creates a bizarre dynamic. In a one-off trade, you’d expect the advantaged party to take the rube to the cleaners. But the EU is and will remain in a relationship with the UK. The EU has been put in the uncomfortable position of making decisions for the UK that the UK should be making for itself, or at least have the awareness to recognize that it’s dumped problems on the EU’s lap and isn’t even attempting to sort them out.

Now there is a potential way out. Richard Smith points out that a convulsive political realignment could allow centrist interests on Brexit to align and come up with a coherent vision on Brexit, be it remain or a not-too-hard departure. The fracturing of the Tories would be the start of that process. But will the EU sit pat and wait for the UK to sort itself out, particularly since it’s possible that that process could take a generation and/or still not lead to a realistic posture on Brexit?

I’d love to be wrong, but I don’t see how the UK gets out of its Brexit quagmire.

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