Brexit Talks Might Fail: There's Just Not Enough Cake

Original post

Authored by Mike Shedlock via,

We have come to a critical moment in Brexit negotiations. Everyone has a proposal but none of them work.

Labour leader Jeremy Corbyn gave a speech in the UK laying out what he wants Brexit to look like. It is in contrast to what UK prime minister Theresa May wants.

However, neither May’s proposal nor Corbyn’s proposal is acceptable to the EU. Corbyn is playing politics, and it may well lead to the collapse of the UK government, but it won’t stop Brexit.

Talks May Fail

That’s the short version. Eurointelligence provides the longer version.

Jeremy Corbyn’s speech was a bit of a downer in our view. He gave us Labour’s version of having your cake and eating it: a bespoke customs union of the kind the EU is unlikely to agree to. He accepts partial regulatory alignment, but not membership of the single market. He insists on the UK having a say on future EU trade deals, which will be completely unacceptable to the EU. He reaffirmed yesterday that Labour will not be seeking a second referendum, or challenging Brexit in other ways. In fact, this should be the main headline. By coming out in favour of the customs union – however flawed it may be – Labour has closed the door on Brexit revocation. We very much liked Laura Kuenssberg’s philosophical observation:

“…if the EU says we can’t have a say in a customs union, and Mr Corbyn says he wouldn’t join a union if the UK wasn’t given a say, what happens then? Nothing about what outwardly seems a softer Brexit is guaranteed. If the promise is an impossible one, is it really a promise at all?”

We have heard a troubling comment on Sky News last night, which suggested that Corbyn’s shift in position was due mostly to the local elections in May. Labour is hoping to win a number of outer London boroughs which had strong Remain majorities at the referendum.

Corbyn’s problem is essentially the same as Theresa May’s: intermediate options work in British politics only, but not for the EU. This is why we have argued that the UK’s choice is rather stark: it is a choice between a trading relationship based on WTO rules (either with or without an Article 50 agreement), or a customs union with full regulatory alignment in respect of the products that are traded and a complete abdication of external trade policy.

The Irish border issue is critical. The EU has aligned itself fully with Ireland on it. The Guardian reports that the European Commission’s draft Article 50 agreement, to be published tomorrow will stipulate that Northern Ireland stay in a de facto customs union with full regulatory alignment. This will put massive strain on the UK government. The EU’s document will have 200 pages and contain 160 legal articles. The Commission will sign off the draft on Wednesday before handing it to the EU ambassadors.

Not Enough Cake

Both Theresa May and Jeremy Corbyn promised to tackle the Northern Ireland border problem. But neither has a proposal that is acceptable to the EU.

In different ways, Corbyn and May want to have their cake and eat it too. Of course, that pertains to to the EU as well.

Unless someone is willing to eat less cake, there will not be any cake to share at all.

This setup suits me just fine. A hard Brexit with WTO rules will prove to the world that leaving the EU is not such a big deal. Moreover, and contrary to what most think, it will be the EU, not the UK that suffers the most.