UK’s Brexit position has more red lines than a Pollock painting

WHEN they meet next week, the EU and the UK need to have made “sufficient progress” on three issues to progress to the all-important trade talks: Citizens’ rights, the UK’s exit payments and Northern Ireland.

It all looked so good on Monday morning, when UK Prime Minister Theresa May set out for Brussels to meet with EU Commission President Jean-Claude Juncker and the organization’s chief Brexit negotiator Michel Barnier. May had brought with her solutions on the exit bill, with the UK now willing to offer something close to €60bn ($70bn), hence matching the EU’s demand. On citizens’ rights, the two parties were also more aligned, although the role of the European Court of Justice remains something of a sticking point for the “Brexiteers” in her Cabinet.

Ireland was different. The prime minister tried to achieve two things: Uphold peace in Ireland and avoid border controls with the republic, even if Britain left the EU with no agreement on trade. To this end, she came up with the term “regulatory alignment”, which was designed to allow the republic to keep the borders open, even if the rules in the rest of Britain would diverge significantly from the EU’s at a future point. Prima facie this seemed like an elegant solution. Peace in Ireland has come a long way since the Good Friday Agreement some 20 years ago. The Irish economy is integrated with the UK’s like it is with no other economy in the EU and, as May pointed out herself when she was home secretary, Britain trades more with Ireland than with China.

So far so good: The wording looked elegant and workable, but it stirred up a real hornet’s nest back in Westminster. May’s minority government is propped up by 10 votes from the Democratic Unionist Party (DUP) and their leader, Arlene Foster, would have none of the prime minister’s verbiage. She is fearful that treating Northern Ireland differently from the rest of the union would not sufficiently bind Ulster into the UK. Scotland and Wales followed suit and asked for similar treatment to Northern Ireland. This did not go down well with the Brexiteers in May’s Conservative party.

The prime minister had to return to London empty-handed. Time is running out, as we are only a week away from D-Day. To make matters worse, Barnier only wants to give May until Sunday night to come up with a proposal (although he will probably relent, if push comes to shove.)

Every negotiation entails hope and fear, as does this one in spades. On the positive side, language may allow leaders on both sides to progress to trade negotiations. The EU does not demand hard solutions to the three issues by Dec. 15, but merely “sufficient progress”, which may well be sufficiently ambiguous to start talking trade, which is arguably in the interest of both parties.

On the negative side, the latest wobbles show many stress points for Britain. The prime minister clearly failed to gain alignment from her partners — they are propping up the government and she reigns with their consent, and hence at their pleasure. Mercifully for May, however, the DUP fears elections probably more than the government, because a potential Labour government under its leader Jeremy Corbyn would not share her vociferous unionist stance. The prime minister appears to have been ill-prepared to venture into the quagmire of Irish politics, which has always been fraught with passion and until recently even with arms.

The Cabinet is deeply divided between Brexiteers and “Remainers.” There are now so many red lines that they do not resemble a clearly delineated grid, but are more akin to a Jackson Pollock painting. Clear positions are vital in any negotiations if one is to come to an agreement. Arbitrarily shifting positions are the nightmare of any seasoned negotiator.

It is crucial therefore for the UK government to understand the seriousness of the situation and to put country before party and personal issues. The UK economy and the country as a whole stand to lose a lot from botched negotiations. Time is moving on and March 29, 2019, is fast approaching. Business needs to make hard calls on if they can leave operations in Britain or if they have to relocate to the EU, and these decisions will happen over the next few months. Barring assurances, which are based on real negotiating results, they will err on the side of caution and leave. People in the know, like the Confederation of British Industry, Britain’s lobby group for big business, are concerned about future economic activity and investment in the country.

QCornelia Meyer is a business consultant, macro-economist and energy expert. Twitter: @MeyerResources