Brexit Uncertainty
In this episode, the Trade Guys catch up with guest Heather Conley, who just returned stateside from a timely trip to London. Heather is the Senior Vice President for Europe, Eurasia and the Arctic, and the director of the Europe program at CSIS. She offers fresh insights about Brexit, how it might affect trade, what it means for us, and where we go from here.
What We’re Reading
“U.K. Parliament’s Rejection of Brexit Deal Puts European Union in a Bind”
“The British Parliament’s overwhelming rejection of the Brexit agreement raises an uncomfortable question for the rest of the European Union: whether it has been too successful in negotiating the U.K.’s departure from the bloc.”
“Late last year, the other 27 EU members and officials in Brussels celebrated a deal that met almost all their negotiating objectives. Britain agreed to pay a sizable divorce bill, protect EU citizens in the U.K., guarantee there would be no hard border in Ireland and not demand frictionless trade on similar terms to an EU member.”
“They were so successful that British lawmakers couldn’t swallow the deal. On Tuesday, Parliament voted it down by a 432-202 margin.”
Why it matters: The EU’s negotiating prowess may come back to haunt it. Brussels may have negotiated so well with the UK over a plan for London’s withdrawal that the terms agreed to are impossible to stomach for the UK Parliament, raising the chances of a hard Brexit that the EU sought to avoid.
Key questions: Is the withdrawal plan negotiated between PM May and the EU as lopsided as the UK Parliament makes it out to be? What would need to change for a majority of UK MPs to back it? Would the EU be willing to agree to those changes?
“EU Expresses Horror at Brexit Vote, Refuses to Reopen Deal”
“The European Union said it was horrified by the massive scale of the U.K. Parliament defeat of the Brexit deal agreed to with Prime Minister Theresa May but said there was no option to renegotiate.”
“Diplomats said they were stunned by the extent of the loss. As they tried on Tuesday night to plot the EU response, they said they think there’s little more they can do to help May and fear that the U.K. tumbling out without agreement in March has now become a real prospect.”
“Despite only 10 weeks to go until the U.K.’s scheduled departure, officials in Brussels ruled out the prospect of an extraordinary summit of the 27 EU leaders any time soon. They said there’s little to discuss if lawmakers in the U.K. can’t decide what they want.”
“European Commission Jean-Claude Juncker told the U.K: “Time is almost up.” French President Emmanuel Macron chimed in also to remind May that the EU won’t offer concessions to solve ‘an internal U.K. politics problem.’”
Why it matters: Although shocked by the withdrawal plan’s defeat in the UK Parliament, the EU has said it is not willing to reopen negotiations with PM May, raising the chance of a hard Brexit. EU diplomats and leaders have characterized the UK’s inability to agree on a path forward as a domestic political issue that will not be resolved by changes to the withdrawal plan.
Key questions: Why won’t the EU reopen negotiations? Is it right to claim that domestic political issues are the root cause of the chaos in the UK over Brexit?
“May Wins Confidence Vote and Opens Cross-Party Brexit Talks,”
“U.K. leader Theresa May survived an attempt to oust her government and immediately opened talks with rival political parties in an attempt to break the Brexit deadlock, as time runs out to reach a deal.”
“The prime minister fought off the threat of a national election and won the right to continue running the country when the House of Commons voted 325 to 306 against a motion of ‘no confidence’ in her administration. The pound edged higher.”
“May invited other party leaders, who back keeping much closer ties to the European Union, for talks tonight to discuss how to forge a compromise Brexit plan that Parliament can support.”
Why it matters: PM May’s first move after surviving a no-confidence vote was to invite opposition MPs to hold talks on how to break the Brexit impasse, but that offer quickly hit a wall. Labour leader Jeremy Corbyn said he would hold talks with PM May only if she took the threat of a no-deal Brexit off the table. PM May has yet to meet Corbyn’s conditions to talk, putting Labour and the Tories not on speaking terms as the deadline for the UK to begin leaving the EU approaches. Corbyn and the Labour party would be willing to back a Brexit deal if it maintained a customs union with the EU, a tight relationship with the EU single market, and protections for workers and consumers. A deal of that nature would require a huge shift from PM May and likely fracture her party, imperiling such a deal.
Key questions: With the two major parties in UK politics not on speaking terms, is it possible to avoid a hard Brexit? Why won’t PM May take a hard Brexit off the table? Is there a compromise to be found between PM May and Corbyn?