Illustration: Jayachandran/Mint
Illustration: Jayachandran/Mint

Opinion | May’s Brexit deal ticks all the wrong boxes

But while she has been feckless in negotiating it, it is worth remembering that Brexit was a losing proposition from the outset

In her letter to the nation on Saturday, UK Prime Minister Theresa May wrote that she had “a duty… to honour the result of the referendum and secure a brighter future for the country by negotiating a good Brexit deal with the EU… I have never lost sight of that duty." Those are fine sentiments. But she will have a difficult time convincing the British public and political establishment that they are worth much. The Brexit withdrawal agreement and political declaration that she and EU leaders signed off on Sunday give her opponents a great deal of ammunition to argue otherwise.

Neither the 585-page agreement nor the 26-page declaration is the final word on the UK’s withdrawal. The former will form the basis of a legally binding treaty while the latter is a political commitment by both sides to the parameters of future talks. That said, they give a good idea of the terms of estrangement. London has been stiffed. This was always on the cards.

Consider the major points of contention. First, the central plank of the Chequers plan—agreed upon by May and her cabinet in July at her country residence of Chequers—had been frictionless trade in goods through a common rulebook. The political declaration has eviscerated that hope. The UK now has the worst of both worlds. Its access to the EU market will depend on its respecting EU trade, competition and tax standards, among other things, just as it does now as part of the Union. However, it will lose the right it currently has as an EU member to have a say in determining those standards.

Second, there is no good answer to the “Irish backstop" dilemma. The withdrawal agreement takes pains to avoid the creation of a hard border between Northern Ireland and the rest of the island. But May’s own Conservative Party detests the manner in which this has been done: If an alternative solution isn’t found—it is difficult at this point to see what it could be, with EU officials dismissing London’s idea of a technology-based solution as “magical thinking"—Northern Ireland will remain within the EU’s customs union and single market rules in order to ensure the free flow of goods across the island. To add insult to injury, from the Tory perspective, the UK mainland will remain within the customs union as well in order to prevent customs checks for goods from Ireland. This union would also preclude the UK from striking bilateral trade deals outside the EU.

Third, there is no clear timeline for transitioning from these interim arrangements. According to the treaty, the transition period will extend until 2020 with a provision for a one-time extension. The unwritten agreement is that this will not go beyond 2022. But such agreements change. And while the UK is in this ‘standstill’ period, it is subject to EU laws without any ability to influence them.

There are various other concessions and complications: from the UK’s footing a £39 billion divorce bill to compromising on EU citizens’ rights and unresolved tensions in security cooperation. Brexit is, in short, a lousy deal for the UK. There is a good chance May will not be able to sell it to Parliament. Opposition from the Jeremy Corbyn-led Labour Party is a given. Corbyn traffics in a form of Euroscepticism that has less to do with sovereignty concerns and more with a suspicion of free trade that sounds no better now than it did circa 1970.

May’s Tories, on the other hand, have rightly condemned the deal for betraying Brexit’s goal of reclaiming UK sovereignty in full measure. There has been a spate of resignations from her cabinet, and 60-70 Tory members of Parliament are expected to vote against the deal next month. Such uncertainty, and the possibility of a hard Brexit, are anathema to business activity and investment. Little wonder UK-focused equity funds have been haemorrhaging cash since the Brexit vote, with outflows now topping $1 trillion.

But while May has been feckless in negotiating Brexit, it is worth remembering that Brexit was a losing proposition from the outset. The idea of leaving the EU presented what management theorists would call a “wicked problem". It was complex, without precedent that could serve as a guide and had no scope for trial and error. Mechanisms of direct democracy, such as referendums, reduce such nuance to a binary choice. Opting for this was, essentially, an abdication of responsibility by the government of former prime minister David Cameron. Coming back from that was never going to be easy.

Could the UK have secured a better deal? Tell us at views@livemint.com

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