THE BREXIT END GAME : CHAOS OR WAYS OUT ?

The United Kingdom is on course to exit the European Union on March 29, 2019 under current legislation, with the Government, most businesses and the country as a whole decidedly unprepared to do so. 

By all analyses a Brexit with no deal with lead to a poorer UK, massive disruption at the Anglo – Irish border in Northern Ireland, higher food prices and shortages of critical medicines and goods, bottlenecks in the ports and an overall drop in the UK GDP of perhaps up to 10 percent. The effects on the European side are equally dire if that happens, given that EU is the UK’s largest single trading partner and trade of course goes two ways. 

Why would anyone do this and what can be done ? 

The Status Quo 

The current situation is absolutely clear in its lack of clarity : the latest chess move this weekend by Prime Minister May’s Government is to delay any meaningful vote on the future of Brexit, which has been promised and required by prior Parliamentary action, until March 12, so that MP’s can ‘take her deal (in the form it has already been massively rejected or amended with EU approval if achievable) or leave it (with no deal)’ about two weeks before the legislated end date. 

This has led to pretty accurate charges of the Government running out the clock while working at the same time in last gasp negotiations (due solely to its self-imposed deadline) to paper over objections to the so called ‘Irish back stop’ issue to a new trade EU trade deal, which to its critics threatens to lock the UK into a perpetual customs union with the EU as ‘follower’ of EU rules with no influence, as keeping the UK under EU rules cannot be ended under the back stop (currently) without mutual agreement between the UK and the EU absent a new trade agreement which guarantees an open and frictionless border between the two parts of the Irish island consistent with the ‘Good Friday’ agreement which brought peace to Northern Ireland and open borders.

This tactic is astonishingly cynical but not surprising considering the mismanagement of the two main parties, Tory and Labor, over the past two years in lacking any coherent strategy to deal with the outcome of the 2016 referendum which promised a very quick win-win deal for the UK, new freedoms of budget and border control, and multiple rewarding trade deals ready to sign with new partners, none of which have come to fruition or have any possibility of actually happening (at least in the foreseeable future). 

The only way May’s gambit can succeed is if MPs swallow the bitter pill of a highly flawed deal which in effect promises several more years of negotiation and thus uncertainty for UK businesses and investors, a very risky gamble nonetheless in view of the further recent fracturing of Parliamentary politics on the heels of desertions of at least eight MPs from the Labor Party and three from the Tories with more rumored to come into a new centrist ‘Independent Group’, which is now making signs of launching an actual centrist party. 

Even an approval of a new EU sanctioned deal by March 13 would not solve the issue as Parliament does not have time to pass sufficient legislation to actually implement such a decision before the exit date so it is generally accepted a brief extension of Brexit would be needed anyway. 

Alternatives  

Are there better alternatives ? Of course and they are simple, achievable and would work as follows : 

1. A Pause : With UK politics having no consensus on anything about Brexit, and its parties battling eternally about what they favor, a one to two year pause in the process would alleviate the pressure, allow time for national consultations (or even a cross party government) and reconsideration of what type of Brexit, or no Brexit at all would be preferable to this current mess. Business and most voters would be relieved, there would be more time to reflect, and the UK would remain during this period as a full member of the EU, all of this being obtainable by the EU offering this up now unilaterally subject to simple Parliamentary acceptance, or the UK asking for it (a wish which would surely be granted), or by cancellation of the UK’s Article 50 notice which triggered Brexit, something the UK can itself also do unilaterally without UK consent as the European Court of Justice ruled decisively earlier this year, a move which takes only the currently lacking political courage in any party to take. 

2. A Delay with a Referendum : this is one of the options pushed by various centrist factions within the main Labor and Tory parties and is backed by almost 1.5 million voters in various organizations who have petitioned for a new People’s Vote. Although the idea is arguably divisive in this current febrile atmosphere and there is no consensus on what options would be put up to a vote, the Labor Party is now moving to backing this option, and it could be combined with a substantial pause (option 1) to decide what questions should be put back to the public and on what terms (simple majority or a plurality of the vote or a ‘triple lock of three of the four nations of the UK approving for example). 

3. A Pause with New Snap Elections : There are various ‘floaters’ being raised for this idea which would involve extending Brexit to allow for new elections which on current polling just might result in a Tory majority, given the ongoing and most recent problems with the Labor Party leadership, but a Tory election victory if it could be had would not solve the internal issues within the party between the hard right Brexiters and the centrists and Remainers. As a result this is a workable option which has many advantages over a hard Brexit because it might clarify UK politics somewhat but is probably the hardest to achieve politically. 

4. A Codicil – A Longer Work Around to Solve the Irish Back stop : this would involve, as a solution to the Irish back stop, a separate a binding protocol to the promised trade negotiations of the current deal (which are supposed to last about two years) which would provide the assurance that back stop will never be triggered because both parties have committed not to just the outlines of a deal as now but exactly how to get it done in a reasonable and realistically longer time frame. The codicil could look like this : an extension of the trade negotiating period for a period of time that even mildly qualified trade lawyers could get a deal done - say for 3 to 4 years instead of two (a period in which the current UK trade negotiators have barely inked far easier trade deals and very few, while having promised many to be in place by exit day), coupled with a binding monthly milestones for meetings and delivering sections of the new agreement, with the right of either side to call up to six one month cooling off periods and an ultimate right to extend the negotiations unilaterally another 6 months each (totaling 18 months of possible extensions beyond the 3-4 year period). While this would extend the transition period and leave the UK in the EU for a longer period, it would do so only for as long as the trade deal did not get done : and if the sides negotiated in good faith, of course the transition to a real Brexit could take less time – as in any transaction negotiation. This would work because it would allay unfounded anxiety that two parties with a mutual self-interest would not reach a trade deal because they have submitted to a binding protocol to get it done – and self-interest compels it. May is currently working on some form of a codicil but whether she can get such a precise one – or one that gives enough time for political certainty - in time for March 12 is pure speculation so let’s call this the ‘rabbit out of the hat’ option with the key difference that the transition would be further extended easing political pressures and stress on the economy. 

A Different Direction ? 

Any of these alternatives would be a welcome fix to the tragedy that Brexit in its current form has become. Of course we have seen governmental dysfunction in many forms and countries including in the USA of course (most currently seen in the budget negotiations being high-jacked by the border wall debate). But for those interested in European security and economy and the future of the UK, it’s hardly acceptable to leave things to the last minute. 

Fortunately, voices of reason are rising on the Parliamentary scene including not only from the new Independent Group but from an emerging majority who (most are counting on) will not allow a hard Brexit to happen, putting aside party politics for the good of the country.  

The key question is whether there are enough MPs of sound mind and courage to demand any one of the obviously achievable alternatives to a Brexit crash out or the muddle – through alternative of a modified May deal (if she can get it on time) involving several years of uncertain negotiations on the UK’s trade future with no yet available precision on the back stop solution. 

Courage much less candor in politics is a rare thing - and rarer still when leaders box themselves into corners as the current Government has done by triggering Article 50 without a plan or a cogent negotiating strategy in place and then sticking to the mantra of ‘we’re exiting the European Union on March 29 (hell or high water )’.  

It indeed seems our leaders forget or are ignorant of the lessons of history, including that of a general in a war not long ago, surrounded in an icy valley with no prospect of success and with only one mountain road out, who, when asked by his commanding general if he had started retreating, said famously, ‘Retreat ? Hell no – We’re not retreating. We’re just advancing in a different direction.’ *  

It still remains to be seen if Theresa May has the courage similarly to advance in a different direction as opposed to obstinately remaining in the valley and abandoning the UK to the frozen abyss of a hard Brexit.  

Time (less than 800 hours) will tell very shortly – and it is more likely than not that she may be ordered out of the valley and in a direction not of her choosing. 

Erik D. Lazar 

Mr. Lazar, a London-based international lawyer, is Director and Founder of Transatlantic Law International, a global business law firm, with affiliated firms in over 95 countries.

 * Quote from Oliver P Smith, Commander of the Coalition Forces, Chosin Reservoir, the Korean War.