Getting Over It: Brexit & The Mythmaking Saboteurs

Much of the last 2 years in politics has been unpredictable and surprising. Brexit has started the UK on a radical journey that looks to be messy, bumpy, and hard to forecast. But there are a few things we can be relatively sure of. The kind of Brexit we get very much depends on how debates are settled in the UK. Brexit produces the need for a vast number of debates because it will effect every pocket of governance, business and the economy. Sweeping changes with far reaching repercussions are to be introduced; touching on the border arrangements in Northern Ireland, regional funding, devolved powers, regulatory environments and the bodies that maintain them, post-Brexit trade policy, immigration systems & policies and thousands of laws and regulations.

Brexit has been a story of unsettled debates. Some debates feel like they have been barely had at all, like what the UK would look like after it has untangled itself from the Customs Union and Single Market. One minister was reported as saying that these kinds of conversations haven't even been had in a Cabinet setting. How these debates will eventually be settled is unclear and much stands in the way of achieving clarity and consensus, like the absence of Cabinet unity and the lack of a comfortable majority in the House of Commons. Perhaps what stands in the way most of all are the myths that are held by the proponents of Brexit.

Meanwhile In Europe

While much is still to be decided in the UK, the EU position has been stable, predictable and eerily unified, perhaps unnaturally so. There has been very little movement in any of the EU's positions. From the start it was evident - at least to those with an inkling - that the EU would gain control of the process the moment the Article 50 notification formally started the withdrawal process. While in the UK some have portrayed the withdrawal process as if it were a negotiation between two equal parties, it really is simply the process that a group of 27 member states uses to tie up strings with a single leaving member while making sure the integrity of the group stays protected. This simple distinction simply hasn't registered with most British politicians or the media. Instead the process has been framed simplistically as a negotiation in which, according to some, the UK has an upper hand.

Another dependable element to the withdrawal are the EU's objectives as far as the detail goes. It was clear from the beginning that the EU was not going to deliver a sweetheart deal that serves UK interests at the expense of the integrity of the Single Market and the four freedoms that underpin it. It is important to underline the fact that most Brexiteers have been asking for exactly that (achieving the 'exact same benefits' of trading with the Single Market as we have today). Meanwhile, the EU listened to wishes of the UK electorate and adopted proposals consistent with a member that no longer wants be a member, plotting a course that will find us squarely outside all of the things that we've been participating in as a result of being EU members. This is often referred to as Hard Brexit.

The Implications of the UK's Red Lines

Meanwhile the UK's red lines as dictated by Theresa May in her Lancaster House speech instantly ruled out a range of more flexible destinations and journeys to Brexit. It explicitly rejects continued influence of the ECJ/CJEU in the UK. It rules out Single Market membership or continued participation in the Customs Union. There will be no more significant EU budget contributions and the UK must be able to enforce immigration however which way it pleases. The impression this gives people in the EU is not just about the UK's red lines, it comes across as a full on rejection of the EU as a project, it is as if the UK had been repulsed by its former affiliation and is finally finding liberation. No phrase to my mind hammers this home more than the phrase "citizen of nowhere." It is a dagger of a comment that instantly would give cause to 3+ million European citizens in the UK to feel misplaced. It conveys an emphatically negative appraisal of the idea of freedom of movement, something the EU finds to be rather valuable.

The EU's Negotiation Principles

The EU have been dependably clear on a great many things, the philosophical underpinnings seamlessly self evident to all of its member states. This can be implied from how unified the EU27 have been up until this point.

The EU wanted the UK to call A50 as soon as possible to remove uncertainty and move forward. It would not budge on freedom of movement or accept anything that would convey special benefit to a non-member over active members. It wants to maintain the existing rights of EU citizens resident in the UK as well as UK citizens resident in member states, while using its existing bodies to guard and enforce those rights. It prefers a transitional phase that is time limited and relatively short (<2 years). They don't want another UK referendum while also rejecting the notion of revocation of Article 50 as a means for the UK to gain a better bargaining position.

The EU also warned that the UK would no longer be able to carry out things that are mission critical to the EU on British soil, referring to for example the City's Euro currency clearing role as well as the homing of the European Medicines Agency. There will be no separate negotiations going on between the UK and individual member states. And importantly, the withdrawal, a transition and the signing of a comprehensive trade agreement would be taking place according to a time line and procedure set out by the EU. All member states have signed up to these positions.

Everything that was true about the EU's stances before the referendum is still every bit as true today. It has been a very stable signal which is as clear as can be. The dependability of the EU's stances sheds light on what the possibilities and non-possibilities are down the road. This in turn helps illuminate how much further debate in British politics must evolve, especially in the conservative party.

Simple ignorance confuses debate in the UK.

Some commentators tell us bluntly that UK politicians have been working from a basic knowledge deficit. Even at the time of the referendum, after months of campaigning in which the spotlight was on how the EU affects the UK, many MPs, perhaps even a majority, simply don't understand what the Single Market or the Customs Union is, how it works and what its effects are. This has resulted in confused language, nonsensical statements and impossible goals. There have been meaningless proclamations of wanting to 'preserve access to the Single Market', while others have promoted the idea of leaving the Single Market but staying in the Customs Union - an impossible feat. Similarly, much confusion reigns on what in the press is often coined as the 'Brexit Bill', which is often portrayed as some kind of punitive cancellation fee that we have no legal or moral obligation to pay.

At the same time Brexit supporters (of which some originally voted Remain in the referendum but have since given way to political impetus) have been fighting basic realities, facts and truths. It has been particularly endemic to the tory brexiteering mindset since the referendum. It explains in part the reason why the UK now finds itself in such a precarious position. But why? Let's first establish a few basic guiding principles, we could coin them the Brexit Certainties. From these principles we can then start contrasting with the mindset of Brexiteers who are holding the UK hostage as it navigates Brexit.

Brexit Certainty #1: The UK needs a transitional period.

For the UK to Brexit while not inviting upon itself economic disaster, infrastructural constipation, legal turmoil and political instability, it needs an orderly transition or what might be better called an interim period. Preferably this will be a long period of time that secures the least amount of disruption that is humanly possible. This would help bring down the damage to trade, businesses and the economy overall as it manages the disruption and uncertainty that Brexit invites.

Brexit Certainty #2: The EU shapes the conditions of any interim period.

Sensible experts will tell you that the only type of interim period available will be entirely defined by the EU. And we generally know what the conditions would look like and we also know what kinds of conditions they would reject in all circumstances. Any transition agreement is going to see the UK signing up to sizeable payments, freedom of movement and ECJ/CJEU jurisdiction. In a best case scenario this looks like EU membership without direct representation in terms of votes or policy making but with no major changes elsewhere. The EU can't even make major concessions here even if it wanted to. It is bound to grant the benefits of the Single Market and the Customs Union only to those who sign up to all of the obligations. As such it can't really barter or bend much to offer the UK a compromise without taking away major features the UK will be seeking to retain in the interim period.

Brexit Certainty #3: The EU can finalise a Free Trade Agreement with the UK only after the UK becomes a 3rd country.

A free trade agreement with the UK can only be signed after the UK has completely left the EU, which involves leaving the Single Market and the Customs Union. There are basic technical and legal reasons for this rather than political ones, but the implication is significant: the UK will need to operate at least for some time outside the Single Market and outside the Customs Union and without the benefit of a FTA. It is not known how long this period would last, but an educated guess about the time needed to complete trade agreements tells us that it is entirely possible for such a period to last over a year.

This means that the UK will have to be prepared on every level to live for some time in the vacuum it creates. The scale of preparation for this is both costly and time consuming. The UK would need new infrastructural capacities at the border and a customs IT system to handle the different nature and scale of custom transactions will need to be in place. It goes without saying that the 30+ regulatory EU bodies that facilitate all perform all kinds of important functions in the UK would also need to be replaced. In effect, the UK would need to prepare for a period of no deal, but with the benefit of potentially ample preparation. The UK would also face disruptions not just in trade with the EU, but trade with countries and markets through which it had enjoyed agreements (there are almost a 1000 of these, with 50 of them being fully fledged FTAs). It is unknown how much of these agreements could be easily transposed. As far as the UK is concerned it could be like working from am empty board. The amount of organisation and readjustment it would take to get ready for this is monumental and there are many sceptics who worry if the UK has the capacity to get ready for this even with extensive time available.

Who Needs to Get Over What

With the three Brexit certainties laid out — and these are objective realities — let's contrast it to how Brexiteers are thinking about Brexit. From the referendum onwards Brexit supporters have been aggressively nudging everyone with a semblance of concern about Brexit to 'just get over it'. But to unlock Brexit the UK needs to hurdle the myths put forward by the Brexiteers. If Brexiteers do not get over these myths we will be looking at a no deal catastrophe or a stifled Brexit, either in the form of a never-ending 'interim' relationship, an outright cancellation or a self-immolating cliff edge jump. While Brexiteers are clutching to certain myths, the UK will be unable to progress. So let's talk about these myths are. The myths perform the double act of being Brexiteering slogans reflecting the tory Brexiteering mindset.

Myth 1: Negotiating a trade deal with the EU is easy.

Liam Fox said it would be the easiest thing in the world. Another said it would take 5 minutes. This myth evidently does not come from trade experts, who almost unanimously would tell you that such agreements can take the better part of a decade depending on the complexity involved. Brexiteers don't believe it is complex, which is part of the reason why they sustain the myth that it will be easy. They think that because we're a leaving member and are starting from a state of synchronisation with the EU's regulations and laws, that it will be easy as cake. But in many ways this makes a trade deal more complex rather than simpler. It is also highly unusual because the UK will be seeking to erect trading barriers, rather than bring them down. The Brexit negotiation is about moving in the opposite direction of the aims of every other trade negotiation. Not even the highest placed officials understand just how successive governments will plan to deviate from EU laws in the future, nor do we know if the UK will conform to future changes in the EU, which makes optimistic arguments about mutual recognition (another Brexiteer favourite) less than certain. And as soon as the UK makes FTAs with other countries and starts generating diverging regulatory policies as a result, the picture becomes even muddier still.

Myth 2: The UK has the upper hand.

The following phrase that has been bandied around in abundance: 'they need us more than we need them'. Often followed by quotes about how high the UK economy ranks. Almost all of the high profile Brexiteers have echoed the sentiment, gripping it like a child would a teddy bear for comfort. But it doesn't stand up to basic scrutiny and betrays a deep misunderstanding of the UK economy and its trading profile within the EU and the rest of the world. Trade experts and economists do a better job at explaining this than myself, the tl;dr is this: the UK's economy is inextricably intertwined with the Single Market and all of the treaties and agreements the EU has formed on behalf of the EU28. The UK is very service-centric economy which is calibrated toward markets which are both highly developed and enjoy compatible regulatory environments. The EU happens to be composed of a large proportion of countries that fit this profile. Like a plant creeping up a wall and covering the entirety of a building, so to has the UK economy become nestled into the structure that is the EU. I and some others would even argue that the UK's economy has become dependent on the EU's labour force which in turn owes it dynamism to the principles of freedom of movement that we are seeking to discard.

But even if experts are wrong and Brexiteers would be right on paper about the EU needing us more than we need them, it doesn't matter. If actors in Europe don't believe it, it simply doesn't factor into negotiations. And everything is telling us that they are simply not moved by it. After the referendum most people in Europe simply resigned to the fact that Britain was leaving and that they'll simply have to manage the damage. There has been no true panic about the UK leaving, nor do they seem desperate for a trade deal the moment the UK leaves. This may change once we get closer to 2019, but this is not something a sane person would depend their life on.

Tragically, one of the UK's strongest negotiation cards was thrown in the bin. Before A50 was notified, the UK held an advantage over the EU: it could hold the timing of A50 over its head and sweat it out until getting EU leaders to engage in some type of prenegotiation. This was lost of course after May sent the A50 letter, made worse by the fact that she notified without having the cabinet, let alone the country prepared for what is to follow. Brexiteers must now simply come to terms with the fact that we don't have the upper hand and we don't have control. Pretending otherwise will only further the UK's troubles.

Myth 3: We can complete a trade deal within Article 50's 2 year window.

From the start a very big fuss was made in government about what actually would be negotiated in the two years and in what order. The UK insisted on parallel talks, so that negotiation about the withdrawal covering things such as the financial settlement and citizen rights could happen side by side with talks about the future relationship in the form a comprehensive free trade agreement. There are two obvious reasons for this. Reason #1 came from the motivation to wrap up Brexit as quickly as possible before the winds start shifting against it. The second reason was the ability to use concessions on settlement and citizen rights to gain advantages on the future agreement.

From the start the EU has communicated that it will stick to a very strict sequence, which nullifies some of the intended levers the UK wanted to use in the process. Despite that, the UK government kept insisting that there would be parallel talks. Even as recently as May 2017 the government mindset was still set on this, with David Davis proclaiming that there would a row of the summer over the sequence.

There ended up being no row. The UK team promptly accepted the sequencing approach, pretty much overnight. It was rejected as being a concession on the part of the UK, while trying to make it look like it was inconsequential due to the fact that there weren't going to be serious talks before the German elections. While it seemed like the mindset finally shifted to live in accordance with realities, there was plenty of after the fact grumbling. But had the government heeded the signs, this issue could have been handled very differently. The Brexiteer's conviction about how things could and should turn out did make one difference.

To this day however, the Brexit department still maintains that it is possible that a FTA can be signed within the next 12 months. Some government answers sound like they aim for a complete FTA, other answers seem to indicate that the outline will be formally agreed upon and other answers yet state things in a more stark manner: there will be no transition deal unless the EU agrees to the terms of an FTA. But as has been put forward by many EU experts, experienced trade negotiators and senior civil servants, any old trade deal could take years to agree to. The comprehensive trade deal that the UK will be seeking will be one of kind in history and could conceivably take the better part of a decade, if not longer. Even if these more sober estimates are off by a year or two, it should be noted that nobody who is both sane and experienced finds that you can predict with confidence the signing of a trade deal within an narrow band of time. They will also point out that arbitrary time limits severely diminishes the UK's ability to get a good deal. Yet Brexiteers are constantly pushing all kinds of arbitrary time limits on the Brexit process.

Myth 4: European Industries will lobby member states toward an arrangement favourable to the UK.

Before the referendum David Davis had written in detail about how he could see Brexit unfolding, describing a situation in which separate member states would strike deals with the UK on the terms of a future relationship. His comments raised enormous doubt as to his basic understanding of trade negotiations and the nature of the EU itself. While he spoke of a multitude of deals while recounting each member state's iconic industries, many rolled their eyes. For one, individual member states don't make bilateral deals on trade, but perhaps Davis was merely clumsy in his account. But more importantly, the EU's trade policy is set and agreed in on EU-wide level, while industries across Europe prioritise the preservation and health of the Single Market. As such, there has been no notable lobbying from industries to pressure EU leaders to contort themselves to the UK's wishlist of a FTA. The most significant message from German carmakers has been a plea to the UK to please stay in the Single Market. The imagined favourable negotiation dynamics, something many Brexiteers seemed to be counting on, simply hasn't matched up to reality. It must then be concluded that their mindset was flawed and their beliefs naive.

Myth 5: The UK doesn't need a transitional phase.

The sheer scale of disruption and change that is required to make the UK ready for a life outside of the Customs Union and the Single Market is something that is wildly underestimated even by the more brainy Brexiteers. Brexit is a herculean task of gigantic proportions. It is a megaproject comprised of megaprojects, each with high levels of difficulty, high costs and damaging risks in the event of failure. Thirty+ EU agencies performing important regulatory tasks in Britain will have to be replaced by new UK bodies. Over three million EU nationals might have to be processed in a yet to be finalised system. A new Customs IT system that is being developed and is currently running late lacks the capacity to handle the volume of transactions needed in a post-Brexit world (hint: it wasn't designed for it).

Hundreds of thousands of lines of laws and regulations that are currently based on our relationship with the EU and its various bodies will have to be refactored and adjusted in record time. This task alone is going to swallow up many thousands of hours of time from our civil servants and MPs, with no accurate estimate as to how long it will take to do it, even as a rush job. Entirely new schemes will need to be set up in various sectors, dealing with budgets, powers and subsidies to replace what industries and regions depend on today. The UK might be sheddding the 950+ agreements on trade it enjoys through the EU over night - this includes fully fledged FTAs with countries that will include Canada and Japan. It could be starting from scratch or from something far more limited than it has today.

Given the scale, it should be entirely obvious to all that the UK can't exit the EU in one go. It desperately needs a transitional phase stretching for as many years as possible. Businesses want ten and ask for 5 at the very least. The EU is leaning toward a mere 20 months. Slowly the government is coming to see the need, but it wasn't always that way.

It was only until the Florence speech that a transitional period became an unambiguous request on the UK's part. That's roughly 16 months after the referendum and 6 months after formally notifying the intent to withdraw. Before then, the government felt allergic to the idea, preferring to talk only in terms of an 'implementation' period that would feature no ECJ jurisdiction, no freedom of movement and the ability to talk trade with 3rd countries. It is truly astounding the reluctance with which the political class in charge of Brexit have treated the transition necessity. The height of this came in December 2016 when David Davis proclaimed that the UK would prefer not to have a transition, but would accept one if the EU asked for it... only to be kind to them. It is quite remarkable that not more was made of his comments at the time.

Myth 6: There is time and scope for bespoke deals.

One of the UK government's key desires has been to calibrate its aims on a sector by sector basis. It also promotes the idea of a uniquely British deal, not just for the future relationship but also extending into a transitional period, or implementation period as the government prefers to call it. Such an approach for example would see cut off dates after which new immigration policies take effect that diverge from the current regime of freedom of movement under EEA rules. It would see direct ECJ/CJEU jurisdiction only being enforced for a little while. It would see the UK being able to do some work on new agreements with other markets. Some EU related elements may be opted into (like the Schengen information system that helps the UK with its border controls and EURATOM) while others are opted out off. This will be regarded in the EU as cherry picking but also makes agreements vastly more complex. Allowing this cherry picking will be seen in the EU as Europeans trying to fix the UK's domestic problems, as most of the bespoke demands stem from a desire to keep Brexiteers happy rather than to meet pragmatic challenges for the country and the EU.

The more bespoke the aims of the deals are, the more time it takes to come to agreement and the more opportunity for disagreement. Brexit involves multiple agreements, each taking up time. The EU's negotiation positions require deliberation and consent from all its members, as well as any significant changes to it. The UK and EU have to agree on withdrawal issues, the transitional period, a future implementation period and a FTA. There is just not enough time to do make these agreements inside what time remains. There certainly isn't enough time to do advanced bespoke deals. The fact that the UK has been entertaining multiple bespoke deals underlines how naive it is about the possibilities.

Myth 7: 'It may take a nanosecond'.

Something that has gotten very little exposure in proportion to its significance is the legal fact that the UK will have to be completely separated of the EU before it can sign a trade deal with the EU. This means there will be a period of time in which the UK functions outside of the EU's Customs Union and outside of the Single Market. In other words, the UK will have to prepare itself to be able to function in this environment for a significant period of time. David Davis is operating under the hope that an agreement can be signed in a nanosecond. The truth is that it could just as easily take 6 months, or a year or multiple years. All of this time, the UK will have to be outside of the Single Market and Customs Union. If you now accept that the UK is not currently in shape to do this, not in 2 years, probably not even in 3 or 4 years. Even if it all of the government made it its sole mission to get everything prepared for this period, it still wouldn't be able to comfortably predict it could be ready in 4 years. Accepting this means understanding that Brexit will take a very long time to come to pass, if at all. The UK is simply bound by mechanistic limitations as well as the flawed leadership that currently is steering the ship. A change of government, which under the circumstances is not unlikely, would not change this.

Brexiteers can adapt their mindsets however as long they believe the pot of gold at the end of the tunnel is still within range. A most interesting development happened after the Florence speech. People were worried that Brexiteers would balk at the PM's concessionary language toward the EU. She was asking for a transition, accepting a continuing role for the ECJ for the duration and even offering significant amounts of money. Some Brexiteers don't want us to pay a penny. Many Brexiteers want to leave the EU's orbit by 2019. But they all made a cynical calculation. May is their best bet at the moment, rebelling now would bring Corbyn closer to government. Even after Boris penned his thoroughly conflicting red lines for the Telegraph in the week leading up to the speech, he decided to back May in superlative terms a week later. And the rest of the Brexiteers followed. They ceded to the circumstances, for now. All bets are off when further concessions to the EU are inevitably made.

Myth 8: 'We can sign trade deals with other countries quickly'.

David Davis and Liam Fox have at times boasted of launching a series of deals which would be ready to be signed the moment we have completed the withdrawal of the EU. But this defeats conventional logic. The first thing to keep in mind is that the EU will be the UK's most important trading partner even after Brexit. The second thing to keep in mind is that the UK will be in flux on every level, economically, strategically, politically and in terms of law. Countries like the US, China, India and others will approach trade deals with the UK from one of two angles. Either they will wait for the EU-UK relationship to crystalize so they have certainty in what they can negotiate with the UK, or they will seek to exploit the uncertainty and ask for favourable arrangements that would limit the access and quality of the relationship that the UK would be able to strike with the EU in the future.

The debate on chlorinated chicken illuminates some of the challenges here. Larger economies such as the US and China might indirectly shape a different regulatory environment in the UK which will make dealing with the EU more difficult. Some cast this dilemma as a choice between markets, implying that you can't have high access to two markets with incompatible regulations that rule it in the same way we have high access to the EU today.

Other countries might seek concessions that are currently politically unpalatable, requiring more generous treatment of immigrants of India for example. And the negotiation of these deals - if they are to be quality deals - can't be rushed. Most trade deals can take many years to ratify. It is highly unlikely that the UK will be implementing new ones before 2015 unless they are very small or relatively insignificant to the UK's economy. And even with a handful of deals signed, these deals might boost trade by relatively unimpressive margins. If the UK fails to retain the FTAs it currently enjoys through its EU membership today it could take decades to catch up. This is without even bearing in mind that the UK is having to build up it's pool of talent and expertise on trade from scratch (right now the UK reportedly has only one experienced trade negotiator leading the team).

Myth 9: 'The no deal option strengthens our negotiation hand'.

While it is true that in many negotiations walking away from a deal is a useful dynamic, Brexit is not that kind of negotiation. It's not like buying a house and being able to shop for another house in another neighbourhood with all the time in the world. The UK can't escape the fact that it needs to deal with the EU. Walking away here is a bit like making yourself homeless while knowing full well that if you are to recover your situation in the future you will still have to deal with the other parties to get your life back in order. The no deal logic also comes crashing down when you realise this is a negotiation in which no deal means enormous damage to all parties, not just the UK and the EU, but businesses, citizens, entire regions and trading partners beyond the EU. That damage can't be undone and makes recovery even harder.

Of course, most that argue for the no deal option say that it would otherwise mean the EU can jack up the price as much as it likes. This is mostly about the 'Brexit Bill'. But even if the EU extorted the UK for 200 Billion, it will be eclipsed by the costs of no deal. This is not about getting good value, it is about appearances for Brexiteers. It also betrays just how much confidence Brexiteers have in the economic opportunities created by Brexit. After all, if the deals waiting for us outside of the EU are so good, why fuss over the precise size of a bill that will leave the UK maintaining a good relationship with its biggest trading partner? In leaving the EU, the UK does its allies damage, which hurts the UK. Even if the UK wildly overpaid on the settlement, it would help stabilise the UK's foremost allies to the UK's own benefit.

The leverage of walking away is poorly argued when you consider what happens to the UK's leverage after no deal comes to pass: the EU can and probably would ask for even larger concessions and the UK would have even less options to say no. Not only would the UK take the bigger hit to its economy the EU would now be motivated to ask for additional compensation on any future deals.

Even if walking away was useful, it is not a credible bluff. This ploy only works if the EU believes it can't manage the consequences and if it believes the UK can. And truth be told, the UK just isn't capable of managing a no deal outcome. It would have taken years of preparation, years which the UK does not have. It has less than 18 months.

Will Brexiteers adapt their thinking?

While Tories continue to put their weight behind these myths, a successful Brexit cannot happen. At some point they will have to let go of them and replace it with reality based pragmatism. If they don't, they will go down in history as the true saboteurs of Brexit. Perhaps if they are told to just get over it, they will change their mind. Somehow I doubt it will make difference.