Both sides stand to lose eco­nom­i­cally in the event of a break­down, writes

New Straits Times - - Opinion - The writer is the Lon­don cor­re­spon­dent for the ‘New York Times’

IN one of the most con­se­quen­tial diplo­matic events in Bri­tain since World War 2, Prime Min­is­ter Theresa May on Wed­nes­day sent a for­mal no­tice of the coun­try’s in­ten­tion to with­draw from the Euro­pean Union, start­ing a tor­tu­ous twoyear di­vorce lit­tered with pit­falls for both sides.

May said in Par­lia­ment that she was in­vok­ing Ar­ti­cle 50 of the Lis­bon Treaty, putting Bri­tain on track to leave the EU in 2019 and rais­ing a host of thorny is­sues in­volved in un­tan­gling a four­decade re­la­tion­ship.

In ad­di­tion to a wel­ter of trade and cus­toms mat­ters, the Con­ser­va­tive gov­ern­ment faces the prospect of a new in­de­pen­dence ref­er­en­dum in Scot­land, where the ma­jor­ity voted to re­main in the EU, and deep wor­ries about the 1998 Good Fri­day peace agree­ment in North­ern Ire­land.

Just be­fore 12.30pm, Bri­tain’s top en­voy to the EU, Tim Bar­row, walked to the of­fice of Don­ald Tusk, president of the Euro­pean Coun­cil, and handed him a let­ter with the of­fi­cial no­ti­fi­ca­tion. Tusk then posted on Twit­ter ac­knowl­edg­ing re­ceipt of the let­ter.

May told Par­lia­ment: “To­day, the gov­ern­ment acted on the demo­cratic will of the Bri­tish peo­ple, and it acts, too, on the clear and con­vinc­ing po­si­tion of this house.”

“The Ar­ti­cle 50 process is now un­der­way,” she added, “and, in ac­cor­dance with the wishes of the Bri­tish peo­ple, the United King­dom is leav­ing the Euro­pean Union.”

She added: “This is an his­toric mo­ment from which there can be no turn­ing back.” She cited the “en­dur­ing power of the Bri­tish spirit.” And she painted a vi­sion of a “truly global Bri­tain, the best friend and neigh­bour to our Euro­pean part­ners, but a coun­try that reaches be­yond the bor­ders of Europe, too.”

With this step, May en­ters what Wil­liam Hague, a for­mer for­eign sec­re­tary, called “the most com­plex di­vorce ever in his­tory”. She be­gins the process with lim­ited lever­age, hav­ing made clear that estab­lish­ing con­trol of im­mi­gra­tion takes pri­or­ity over mem­ber­ship in the EU’s sin­gle mar­ket or cus­toms union.

As a re­sult, an­a­lysts say, she has fre­quently stressed her will­ing­ness to walk away from the table if a good deal proves elu­sive, leav­ing EU ne­go­tia­tors won­der­ing whether she is se­ri­ous or try­ing to bluff her way into a stronger ne­go­ti­at­ing po­si­tion.

“I think they would pre­fer a deal,” Anand Menon, a pro­fes­sor of Euro­pean pol­i­tics and for­eign af­fairs at King’s Col­lege Lon­don, said of the Bri­tish gov­ern­ment, not­ing the high eco­nomic stakes. Nev­er­the­less, he said, “I still think they are read­ier to walk out than most peo­ple ac­cept”.

Tusk said at a news con­fer­ence in Brus­sels that there was “no rea­son to pre­tend this is a happy day”, and that Bri­tain’s plans to de­part the bloc would only leave the 27 re­main­ing mem­bers “more de­ter­mined and more united”. He added, “We al­ready miss you”.

Man­fred We­ber, a German law­maker and a pow­er­ful con­ser­va­tive in the Euro­pean Par­lia­ment, wrote on Twit­ter that “from now on, only the in­ter­ests of the re­main­ing 440 mil­lion Euro­peans count for us”. He later added: “If you leave the EU, you lose the as­so­ci­ated ben­e­fits.”

What makes the loom­ing con­fronta­tion so dan­ger­ous is that both sides stand to lose eco­nom­i­cally in the event of a break­down. From agri­cul­ture to avi­a­tion, from fish­eries to phar­ma­ceu­ti­cals, Bri­tain’s econ­omy has been shaped by mem­ber­ship in the Euro­pean Union, its main trad­ing part­ner.

With its sin­gle mar­ket — the world’s largest — and its Cus­toms union, the Euro­pean Union en­sures Cus­toms-free trade across fron­tiers in goods and some ser­vices.

With­out a deal, Bri­tain faces cus­toms checks at its bor­ders and tar­iffs on im­ports and ex­ports, not to men­tion the re­lo­ca­tion of at least part of its lu­cra­tive fi­nan­cial ser­vices sec­tor.

But Bri­tain is a big mar­ket for Con­ti­nen­tal Europe, too: Ger­many alone ex­ports 800,000 ve­hi­cles there every year.

Though Lon­don’s dom­i­nant fi­nan­cial ser­vices sec­tor is hardly pop­u­lar, many busi­nesses on the Con­ti­nent rely on its deep cap­i­tal mar­kets.

Bri­tain is one of only two sig­nif­i­cant mil­i­tary pow­ers in the bloc — the other is France — and has valu­able se­cu­rity and in­tel­li­gence ca­pa­bil­i­ties that el­e­vate Europe on the global stage.

In her let­ter to Tusk, May ar­gued that with­out an over­all agree­ment, “our co­op­er­a­tion in the fight against crime and ter­ror­ism would be weak­ened”.

Her of­fi­cials later de­nied that this was a threat by Bri­tain, ar­gu­ing that it re­flected the fact that some co­op­er­a­tion on polic­ing is­sues was con­ducted through EU chan­nels.

But, Guy Ver­hof­s­tadt, the Euro­pean Par­lia­ment’s ne­go­tia­tor for Bri­tain’s exit, said there could be no “trade-off” in talks be­tween such is­sues and trade.

“I think that the se­cu­rity of our cit­i­zens is far too im­por­tant,” Ver­hof­s­tadt said.

To make mat­ters more dif­fi­cult, the fi­nal deal will re­quire votes in per­haps 38 leg­is­la­tures across Europe, as well as in the Bri­tish Par­lia­ment. NYT


A tele­vi­sion screen at the trad­ing floor of Lon­don’s ETX Cap­i­tal dis­play­ing an im­age of Bri­tish Prime Min­is­ter Theresa May as she speaks in the Houses of Par­lia­ment fol­low­ing the trig­ger­ing of Ar­ti­cle 50 of the Lis­bon Treaty. She says the gov­ern­ment acted on the will of the Bri­tish peo­ple.

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