Barnier’s tough talk on deadlines could force May to come clean on post-Brexit plans

31 January 2017 9:56am
Michel Barnier

8 December 2016. By Simon Taylor.

The EU this week turned the tables on UK Prime Minister Theresa May and her mantra that "Brexit means Brexit."

Demolishing any hope the British may have had that the EU was ready to cut them some slack on the timing of talks to leave the bloc, the EU's chief negotiator made it clear the clock was already ticking and would not be stopped.

Michel Barnier's take-home message for May was this: Brexit negotiations mean Brexit negotiations. Talks would have to be completed by October 2018, and anyone suggesting that UK negotiators would be granted a leisurely two years needs a reality check.

Not that Barnier, a Frenchman who is a former EU commissioner, put it that bluntly in the course of his press conference on Monday. The narrow timeframe, he explained in a mixture of French and English, was to allow for the European Parliament, the 27 remaining EU member states and the UK to vet and approve the deal.

The real deadline, Barnier pointed out, was not one of his making: The UK needs to leave the union, with all loose ends tied, before the European parliamentary elections in spring 2019. It would be absurd for British candidates to run for election, only to be sent home immediately once Brexit kicked in.

Barnier also dashed any hopes the UK may have had of being able to conduct negotiations on the UK's future relations with the bloc whiles Brexit talks were under way. There could be no post-Brexit brainstorming before Brexit had occurred, Barnier said.

"Legally, things cannot be done at the same time," he said. "In 15 or 18 months of negotiation, you can't do everything."

His comments will have aggravated May and the UK government.

The prime minister wants the talks on Brexit terms to be conducted alongside negotiations on the UK's future relations with the EU. That way, the UK's status will be known to potential trading partners and the country will be able to hit the ground running once it has left the bloc in 2019.

Transitional arrangements, needed to bridge the gap between when the UK leaves the EU and when it adopts its new relations, can only be finalized once there is an agreement on how Britain will exit.

These arrangements will need to include tariff rules and measures to avoid burdensome customs procedures for UK-sourced goods once the divorce is wrapped up — which is why this is such a big trade story.

UK businesses have warned that they face a "cliff edge" of tariff hikes and customs delays if transition periods are not in place for the day after the EU leaves. They need certainty as fast as they can get it.

Timing challenge

The precise timing of when May sets out her ambition for the UK's future relations with the EU is controversial.

To gain the maximum amount of negotiating time, May could say what she wants in the letter she is planning to send to European leaders in March triggering Article 50. This article from the Lisbon Treaty sets out the procedure for a country to leave the EU.

But May's vision is a political minefield. For example, she could suggest joining the European Economic Area, to give the UK tariff-free access to the EU's single market but no control over future legislation. This would be anathema to the "hard" Brexiteers.

This is the predicament she faces. Showing her hand in March would expose May to domestic political attacks, potentially weakening her negotiating position in Brussels.

There are other trade options available for the UK, including the increasingly likely one that would see London negotiate a tailor-made customs union with the EU. This would give British goods tariff-free access to the bloc's single market and avoid heavy customs-clearance procedures.

At the same time, the UK would be able to negotiate trade deals with third countries — although not on the external tariffs it imposes on imported goods, which it would have to harmonize with those of the EU.

Turkey is in such a customs union with the EU and is required to maintain the same external tariff on goods, while also being free to strike trade deals.

The alternative is for May to keep her cards close to her chest. She could refer to her ambitions for the EU's future relations, but avoid going into detail of what form that could take.

Less detail is more

Simon Fraser, managing partner at Flint Global, a consultancy, and former head of the UK's Foreign Office, thinks May should avoid putting too much detail in the letter she sends in March.

Fraser says he expects a "broad statement of the UK's intent to achieve a constructive future relationship in the economic and political interest of both the UK and the EU" — but not much detail.

Even if the March letter is well received both domestically and by the EU's 27 other national governments, May will still have to come clean about the UK's future status before too long. Otherwise, it will be impossible to conclude the negotiations on Brexit terms and fix transitional arrangements.

John Kerr, a member of the UK's House of Lords and a former UK ambassador to the EU, said in a speech at the London School of Economics in November that the UK could agree on transitional arrangements — what he called an interim agreement — but only if a permanent deal was put in place at the same time.

"The interim agreement covers a gap before the permanent agreement comes into force and while the ratification process takes place," Kerr said.

"No one concedes something in an interim agreement that they would not be prepared to concede for a permanent agreement," he said. "In a transition or a bridge, you have to know where you are going, and have a second pillar on the other side of the river, and that is just as hard to negotiate."

Ticking clock

The tight schedule is complicated by important national elections, due to take place in France next spring and in Germany in September. These could see precious negotiating time lost while the new governments take office.

May would have to specify which future role she sees for the UK by the end of 2017 at the latest. Even then, that would leave only 10 to 12 months for the talks to settle Brexit terms, transitional arrangements and the form of the UK's future relations with the EU.

It is, in short, an incredibly short timeframe for three sets of negotiations that could normally take years in their own right.

While the UK and its EU negotiating partners might agree that they want to avoid a cliff-edge scenario on the day of Brexit, the risk is that the deal on all three elements comes too late to prevent the UK tumbling off the cliff.

Brexit Special Report