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"Brexit' Talks Could Stretch 10 Years, British Official Warns

Thursday, December 15, 2016  
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Europe

By Stephen Castle / Dec. 15, 2016

LONDON — Struck off the guest list for dinner at a European Union summit, Britain’s prime minister, Theresa May, faced a second embarrassment on Thursday, over warnings that trade talks on quitting the bloc could last a decade, and even then might fail.

Despite the June 23 referendum decision to leave the European Union, Britain remains a full member until the end of negotiations on British exit, known as Brexit, which Mrs. May aims to complete by the spring of 2019.

Britain’s ambiguous, and increasingly isolated, position was underscored by the format for the gathering in Brussels on Thursday in which the other 27 leaders were to debate their own strategy for Brexit over dinner — and without Mrs. May.

The awkwardness Mrs. May faced when she was politely asked to leave the room was compounded by a leaked warning from her own top aide in Brussels, highlighting the mind-numbing complexity of undoing four decades of European integration.

According to the BBC, the advice, given to ministers in October by Ivan Rogers, Britain’s ambassador to the European Union, suggested that completing talks on a new trade relationship with the bloc could take 10 years — and even then might not survive a process of ratification by each of the 27 other nations.

Mrs. May’s office did not deny the substance of the report, but said that the ambassador was reflecting the views of other member countries, not his own assessment of the situation.

Nevertheless, it presents a stark contrast to some British assertions that a new relationship could be struck within the two-year timetable envisaged under the formal process for withdrawal, which Mrs. May intends to begin by the end of March. Even this timetable may be optimistic, because Michel Barnier, one of the European Union’s lead negotiators, has said that in reality, a deal would have to be done within 18 months to allow time for ratification.

In the meantime, Britons remain fiercely divided over Brexit, with supporters encouraged by the fact that the economy has so far not suffered the dire fate predicted by some ahead of the referendum. Their opponents say the negative effects will become visible next year, after being delayed by the post-referendum stimulus injected into the economy by the Bank of England and a competitive edge gained by the depreciation of the pound sterling.

While some of those who favor Brexit fret that they could be cheated of their referendum victory, many businesses worry about the apparent lack of a coherent government strategy, almost six months after the referendum.

Their big fear is that two years of negotiation will fail to yield a trade deal, leading to a “cliff edge” plan in which import and export tariffs are applied with little time to prepare.

On Wednesday David Davis, the minister responsible for negotiating British exit, suggested that a transitional arrangement might be possible to overcome the risk of such economic disruption, providing that the broad outlines of the final deal are settled by the end of the two-year period.

“If you build a bridge, you need to have both sides established before you build the bridge,” he told lawmakers, while adding that it was “perfectly possible to know what the end game will be in two years.”

Alongside the chancellor of the Exchequer, Philip Hammond, Mr. Davis is emerging as a more pragmatic force in the internal British cabinet discussions, for example, keeping open the option that Britain might be willing to continue making some budget contributions to the bloc after Brexit, in exchange for privileges.

More surprisingly, Mr. Davis also referred to the possibility that Britain might, legally, be able to revoke its decision to quit the European Union, once it had ignited exit talks under Article 50 of the European Union’s treaty — though he added that this was not something he anticipated. Until now, the government has argued that once started, the process could not be reversed.

Inside the British government, civil servants are working frantically to assess the potential economic impact of Brexit on different sectors of the economy, as their political masters struggle to assemble a strategy for Brexit talks.

So far Britain has not said formally that it wants to leave the European Union’s customs union, which provides for tariff-free trade, or its single market, which removes non-tariff barriers, and Mrs. May argues that there need be no “binary choice” between being on the inside or the outside.

Last week the government promised that it would present its outline plan for Brexit to lawmakers before the exit negotiations are triggered. But on Wednesday Mr. Davis said that this would not emerge before February.

Moreover, it remains unclear whether this plan will yield real detail, or merely present a wishful opening bid that suggests Britain could jettison the things it dislikes about the European Union, such as the free movement of people, while keeping free trade in goods and services, for important sectors at least. The foreign secretary, Boris Johnson, once articulated this view, arguing that “my policy on cake is pro having it and pro eating it.”

That notion has been rejected by a variety of European politicians, including Mr. Barnier and the German chancellor, Angela Merkel, both of whom have warned that Britain will not be allowed to cherry pick.

There were some early signs of discord Thursday on the European Union side, with the European Parliament’s main negotiator on Brexit, Guy Verhofstadt, threatening to start parallel talks with Britain unless his institution is given a greater role in the Brexit talks.

The European Parliament must approve a final deal but, in a Twitter post, Mr. Verhofstadt, a former prime minister of Belgium, accused the member governments of planning to “sideline” his fellow European lawmakers, adding, “If they want us to talk straight to British authorities, they’ve got it.”

On the substance of the negotiations, the national governments of the 27 are trying to close ranks. In June, soon after the referendum, they declared that any agreement concluded with Britain “will have to be based on a balance of rights and obligations,” and that “access to the single market requires acceptance of all four freedoms,” which include the free movement of people as well as goods, capital and services. A similar refrain was expected to emerge Thursday from the informal dinner meeting of the 27.

That sets the stage for the difficult negotiations predicted by Mr. Rogers. On Thursday his former colleague, Gus O’Donnell, once Britain’s most senior civil servant, and now a member of the House of Lords, supported that assessment, telling the BBC that it would take “at least five years,” to reach a final deal.

Asked if he agreed that a transitional arrangement would be needed to smooth Britain’s exit from the bloc, Mr. O’Donnell replied: “I think that’s a statement of the completely, blindingly, obvious.”


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