October 5, 2018
With less than six months to go before the United Kingdom exits the European Union (EU), it is still unclear how such an exit will occur. After a contentious meeting on September 21 in Salzburg, Austria, EU leaders and British Prime Minister Theresa May remain unable to reach a deal about the relationship the United Kingdom should keep with the bloc after Brexit.

How did we get here?

The referendum

On June 23, 2016, a referendum was held in the United Kingdom that asked the question: “Should the United Kingdom remain a member of the European Union or leave the European Union?” Leave prevailed with 51.9 percent voting in its favor. David Cameron, the United Kingdom’s prime minister at the time, who called the referendum and campaigned for a “Remain” vote, resigned.  

Article 50 triggered

Theresa May, who eventually replaced Cameron, officially triggered Article 50 of the Treaty of the European Union (TEU) on March 29, 2017.

Article 50 lays out the process for an EU member state to leave the Union, including a provision that requires the EU and the exiting member state reach an agreement on future relations within two years of official notification or else the member state leaves without any formal ties remaining.

Negotiating an exit

The United Kingdom and the EU have been negotiating the terms of an exit since June 2017. The first stage of talks was cleared in December 2017.

In March 2018, both sides made significant progress on the status of EU citizens in the United Kingdom, a transitional period after Brexit, and fishing policy.

On July 6, 2018, May released her government’s plan for a post-Brexit relationship with the EU that would be the basis of her negotiations with Brussels, dubbed the “Chequers Plan,” after the prime minister’s country residence.

What is the Chequers Plan?

May’s Chequers Plan includes a free trade area for goods between the United Kingdom and the EU, a “joint institutional framework” to resolve disputes, and a commitment to phase in a “facilitated customs arrangement,” which would aim to avoid the need for customs checks.

May lost two cabinet members—Foreign Secretary Boris Johnson and Brexit Secretary David Davis—over the Chequers Plan. Both quit the government to protest what they saw as a plan for a soft Brexit.

May then ran into another obstacle with the EU. After she presented her plan to EU leaders at the September 21 summit in Salzburg, European Council President Donald Tusk declared it “will not work.”  May admitted that negotiations were at an “impasse.”

Undeterred, the British prime minister has doubled down on her support for the Chequers Plan, which she argues is the only way forward for both sides.

What happens next?

Tusk has said that a deal acceptable to both sides must be in place by the end of October in order to allow time for the European and British Parliaments to review and approve the agreement. Many observers believe the October 17 EU summit in Brussels will be the last opportunity for a deal to be made by this deadline. A special summit on November 17-18 or the next EU summit in December could be used as backstops, but this could jeopardize the ability for a deal to be in place by the time the United Kingdom leaves the Union on March 29, 2019.

What are the sticking points in the negotiations?

Free Trade vs. Four Freedoms

The most significant disagreement is over how the United Kingdom can retain access to the EU’s single market after Brexit. May’s Chequers Plan maintains a free trade area for goods, and a “common rulebook” for agricultural products, but does not commit to completely free trade in services.

While some parts of this plan appeal to EU leaders, especially the maintenance of free trade and the promise that the United Kingdom would work diligently to maintain high regulatory standards, EU leaders have been firm that access to the single market can only be achieved if the United Kingdom embraces all of the “Four Freedoms”: free movement of goods, services, capital, and people.

The United Kingdom is, more or less, willing to preserve the first three, but control of immigration remains a sticking point. Many British leaders recognize that the “Leave” vote was inspired mainly by concerns about unchecked immigration to the United Kingdom from EU member countries, and a retention of the freedom of movement would leave “Brexit” unfulfilled in the eyes of many British voters.

Still, EU leaders across the Continent believe that there can be no single market access for the United Kingdom without preservation of the freedom of movement. These leaders point to the example of Norway and Switzerland, which, although not full members of the EU, allow freedom of movement as part of gaining access to the single market.

British negotiators had hoped they could peel off a number of EU member state governments, especially in Eastern Europe, from this opposition due to rising concerns about immigration and the flow of refugees across EU borders. These member states have remained firm, however, in part due to the large numbers of their citizens who have moved to the United Kingdom and would be hurt by the reversal of freedom of movement.

The Northern Ireland Question

Another major concern is what to do with the border between the Republic of Ireland and Northern Ireland. The free flow of people and goods is considered to be a major factor in the success of the Good Friday peace agreement that ended decades of violence in Northern Ireland. The border is notoriously complicated and the reintroduction of border checks and economic barriers between the two could cost both sides millions of euros.

May believes her plan would avoid this scenario, as goods could still travel freely across the border and arrangements could be made to have as “frictionless” a border as possible. European leaders are more skeptical of this plan and remain firm on their demands that all four freedoms be maintained with no exceptions.

The Irish border question has provided some of the worst headaches for May, as she must balance her desire to maintain close economic ties with the Republic of Ireland and the strong views of her coalition partner, the Democratic Unionist Party (DUP). The DUP is concerned that a compromise deal could see border and economic restrictions placed between Northern Ireland and the rest of the United Kingdom, which they find unacceptable.

The European Court of Justice

For many Brexiteers, the European Court of Justice (ECJ) was one of the hated symbols of Brussels overreach and should be the first thing to go with Brexit. May has unequivocally stated that the court will have no jurisdiction or power within the United Kingdom after Brexit, although it still may have some control in a transition period.

The issue with her Chequers Plan, however, is what would happen when there are disagreements over EU standards for a specific good. European leaders maintain that the ECJ would remain the highest court for any decisions on EU-based rules, while May believes a joint committee with EU and British judges should arbitrate disputes.

The Long Road Ahead

Many of these issues boil down to a central question: how much power is the United Kingdom ready to cede to Brussels in return for access to the EU’s market? Brexit was supposed to be about getting back political and legal control from the EU, but it has now become clear that access to the EU’s benefits will only come at the expense of ceding real control to Brussels on many issues.

May will have to bargain hard with EU leaders to enact any sort of concessions on these points, and she is determined to get a unique deal for her country. On top of that, the British Parliament will need to approve any agreement May reaches, with the possibility that the deal could be defeated by May’s opponents and either pro-Brexit Conservative Members of Parliament (MPs) if the deal cedes too much power, or by anti-Brexit members of her party if an adequate economic deal is not reached.

May’s room for maneuver is small and her success so far has been limited. Time to find a deal is running out. The United Kingdom may have to walk away from the EU with nothing.

David A. Wemer is assistant director, editorial, at the Atlantic Council. Follow him on Twitter @DavidAWemer.

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