Brexit

U.K. Walks Into Brexit Talks Naked

Its negotiators are unprepared, but the EU side isn't.

How ready is May's government for a round of Brexit golf?

Photographer: Tony Marshall

The opening game of the Brexit season takes place as scheduled on Monday. The British side debated for almost a year about what sport it would play: Was it rugby, cricket, tennis or perhaps chess?

May Under Pressure as Brexit Talks Begin

The result was so inconclusive that it has fielded a team that packs neither the solid brawn of the rugby prop nor the quick reflexes and accuracy of the cricketer, nor the agility of the tennis player or the patient cunning of the chess grandmaster. Unsure even how to dress for the occasion, the British side seems to have gone out there naked.

The U.K. has no public position papers for the talks except for the letter handed over to the European Union on March 29 to activate Article 50 of the Lisbon treaty, which sets out the procedure for terminating EU membership. The six-page document was poor on specifics. It proposed "putting our citizens first" and concluding an early agreement on the rights of EU citizens in the U.K. and U.K. citizens in Europe. It called for avoiding the return to a hard border on the island of Ireland. And it proposed "prioritizing the biggest challenges," such as a free-trade agreement between the EU and the U.K. The confident tone suggested that the U.K. government would try to set the agenda for the talks. But in the intervening months, Prime Minister Theresa May called an election that left her considerably weakened. She's going into the talks with a minority government and with only the sketchiest deal with her only possible allies in the parliament, Northern Ireland's Democratic Unionist Party.

By contrast, the EU has prepared meticulously. In May, it issued a 17-page negotiating directive, which defined the areas of negotiation that should be tackled before the future relationship between the EU and the U.K. is discussed: citizens' rights, a financial settlement covering the U.K.'s obligations to the EU (which British commentators often call an exit bill), the Irish border issue, and the status of goods placed on the market before the U.K. becomes a third-party state. The European Commission, charged with conducting the talks, has also produced detailed position papers on two of the early issues: citizens' rights and the financial settlement.

The U.K. government should be as interested as the Commission, if not more, in letting the public know what it's trying to achieve on every issue. After all, it initiated the process. The absence of any position documents on the British side means May's negotiators are going to be winging it. In Brussels, there's growing pity for May's plight. But within the EU, emotions don't drive outcomes. The bloc does negotiations slowly, deliberately, by the checklist. Nothing is agreed until the last checkmark lands on paper. There's nothing punitive about that; it's how bureaucracies operate, and the EU is a consummate bureaucracy.

The EU has published an official organigram of its negotiating team. Chief Negotiator Michel Barnier's deputy, Sabine Weyand, a German, is a details person extraordinaire who has worked on trade issues in European institutions since 1994. No one on the U.K. team, led by David Davis, has comparable specialized experience. 

On citizens' rights, the EU proposes a generous settlement that would essentially lock in the EU-mandated freedom of movement for Europeans who reside in the U.K. and Britons resident in Europe as the Brexit deal comes into force. The proposal covers their family members who live elsewhere, protects students and offers full social security access on both sides. Since there are an estimated 3 million EU citizens in the U.K. and about 1.2 million Britons in the remaining 27 EU countries, such a deal is, on the surface, more beneficial for the EU. But then, according to a recent survey, just over half of skilled EU workers in the U.K. say they plan to leave the country before it exits the bloc. Even despite some Britons' xenophobic motives in voting for Brexit in the first place, the government should be interested in stopping the brain drain. Given the EU negotiators' better level of preparation, it's highly likely that the eventual citizens' rights agreement will be reasonably close to the EU position. Perhaps the deal can even be ringfenced from other, tougher issues, given the likelihood that the negotiators will run out of time on them -- that would be a material manifestation of Brussels' pity.

On the financial settlement, the EU position paper outlines what the union owes to the U.K. -- its remaining balances in various EU programs, pensions paid by the EU to former British employees, etc. -- and what the U.K. owes to the union, such as its liabilities as a member of the European Investment Bank and other European financial institutions and the obligations under various ongoing EU programs. It doesn't name a ballpark amount, ostensibly making it easier for the U.K. to strike a face-saving deal and to stretch out the payments over time. The settlement talks, however, are likely to be protracted because of the EU's tediously bureaucratic approach to such technicalities.

The EU hasn't told the public yet what its approach will be to other areas of negotiation because it doesn't expect talks on the other aspects to begin in the coming weeks or even months. Among other things, that's politically wise: The European Commission negotiators can't be sure they'll be dealing with May next month or, at any rate, by the end of this year. A baby step at a time is the only reasonable way for them to approach the process. 

For that reason, it's unlikely that there will be any discussion at the talks of issues that are being hotly debated in the U.K., such as whether there can be a transitional trade agreement that would keep the U.K. in the EU's common market (like Norway) or customs union (like Turkey). That could only happen if the U.K. managed to link trade to the citizens' rights issue. The only way it could do that is by accepting the EU's free movement of people and going for the Norwegian option from the start -- but May's government is holding on to curbs on immigration as the only connection it has to Brexit voters.

Whether anything happens at the talks is up to May and her government. They need to start responding to EU proposals with similarly competent and detailed ones. The EU still has all the time in the world; its team is impeccably dressed for a long game of golf.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Leonid Bershidsky at lbershidsky@bloomberg.net

    To contact the editor responsible for this story:
    Therese Raphael at traphael4@bloomberg.net

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