Brexit negotiationsTheresa May’s Brexit breakfast breakthrough

TALK about the last minute. Theresa May had originally hoped to agree on a deal at a lunch with Jean-Claude Juncker, the European Commission president, on December 4th, but it fell apart when the Democratic Unionist Party (DUP), whose support the prime minister needs for her parliamentary majority, objected to the provisions for avoiding a border between Northern Ireland and the Irish Republic. She was then told she must reach agreement by the weekend if next week’s European Union summit was to agree that sufficient progress had been made in the first phase of the Brexit divorce negotiations to start talks on the future relationship. After frantic late-night bargaining, a bleary-eyed Mrs May duly flew back to Brussels in the small hours of December 8th so that she and Mr Juncker could declare that a deal had indeed been struck.

The agreement took the form of a 15-page “joint report” covering all three principal divorce issues. In each case, Mrs May has given ground to the EU, which may come to annoy the most hardline Brexiteers. On the rights of EU citizens in Britain, for example, she has accepted that they can be overseen by the European Court of Justice (ECJ) for as long as eight years after Brexit. On the financial settlement, or exit bill, she has conceded that Britain will meet its terms in full, implying a total payment that will amount to some €40-45 billion ($47-53 billion), albeit spread over many years.

The most contentious issue was, however, the Irish border. Mrs May has long promised that there would be no reversion to a hard border between Northern Ireland and the Republic. But she also insists on leaving the EU’s single market and its customs union. That has made both Brussels and, more importantly, the Irish government sceptical that she could honour her promise on the border. Her first attempt at resolving this was to guarantee that Northern Ireland would keep in “regulatory alignment” with the EU. But the DUP objected that this might mean Northern Ireland being treated differently from the rest of the United Kingdom, and could even lead to there being a border in the Irish Sea instead. Hence the new formulation that Mrs May has accepted, which is to promise that even if there is no agreed trade deal, the UK as a whole will “maintain full alignment” with all relevant rules of the single market.

This formula, along with the rest of the joint report, was hailed in both Brussels and Dublin. The DUP said it still had reservations. Yet it had no real alternative but to accept the new terms: continued intransigence could have led either to a Brexit with no deal at all or the collapse of Mrs May’s government and the arrival in power of Labour’s Jeremy Corbyn. For the DUP, either would have been a catastrophe.

Yet the real worry for Mrs May may now be within her own party. Brexiteers have accepted all the concessions she has made thus far because they are set on the ultimate goal of leaving the EU in March 2019. But as they consider the terms of the joint report, they may jib at the implicit promise that Britain will maintain close regulatory alignment with many of the single market’s rules even after leaving the club. That seems inconsistent with their dream of tearing up all Brussels regulations and opening the way to free-trade deals with lots of third countries. In future talks this contradiction could come to haunt Mrs May.

Despite all the tributes Mrs May has won this week, her troubles may thus have only just begun. Donald Tusk, president of the European Council, said that more clarity was needed on what trade deal Britain wanted to secure. He added that, if breaking up was hard, breaking up and building a new relationship was much harder. The clock is ticking towards March 29th 2019, when Brexit is due to happen. It will be tough agreeing to a legally watertight, time-limited transition to a new trading relationship. Furthermore, few experts think that a new trade deal can be wrapped up (and ratified) within two years. And when it comes to the trade deal itself, the EU will say that, if Britain insists on leaving the single market and customs union and retaining the option of regulatory divergence, it can only have a deal similar to Canada’s, which covers most goods but barely any services.

Throughout the negotiations, the EU has consistently been several steps ahead of Britain. Whereas the British cabinet has not even discussed the future relationship, Brussels has already prepared its position and is now issuing its negotiating guidelines.

Indeed, Mrs May’s notion of Brexit red lines was always misconceived. Just as the EU sets the terms when countries apply to join the club, it also has the upper hand when a country decides to leave. Tory Brexiteers have had to swallow a big exit bill, a role for the ECJ, and a promise of some regulatory alignment—all in exchange for a trade deal that may end up little better than Canada’s. They could yet be vindicated. But some may surely start to wonder what Brexit is really for.