Theresa May’s decision to give formal notice to the European Union that Britain intends to leave the bloc, will trigger two years of negotiations between Mrs May’s government and the European Commission on the terms on which Britain leaves the union.
The invocation of Article 50 marks a decisive change of direction for the UK towards an uncertain destination. Since the so-called Brexit referendum last June, the prime minister’s policy has evolved from initial requirements for new border controls and freedom from the European Court of Justice to also include Britain’s withdrawal from the single market and customs union. The Europeans have insisted in turn that the UK cannot enjoy continued preferential trade access while also restricting the free movement of EU citizens.
The search for a compromise will dominate discussions over the next two years. Mrs May has warned that she will walk away from a bad deal. But whether or not this threat stands up depends on her being able to deliver convincing answers to the daunting challenges that Britain faces as it seeks out a new role in the world.
The realisation of the prime minister’s vision depends on how she manages the complexities of conflicting trade and migration priorities against a backdrop of an increasingly restive domestic political scene.
Mrs May has argued that leaving the EU will see the renewal of a “global Britain” charting a more independent path based on worldwide connections, military and trading prowess, and cultural influence. But serious questions remain over whether a patchwork of new trade agreements around the world can compensate for lost European business given that the single market still takes approximately 45 per cent of all British exports.
A plan to cultivate an enhanced trading relationship with African Commonwealth countries has already been derided by critics as an attempt to create “Empire 2.0” based on a scattered group of underdeveloped economies linked by remnants of former imperial ties. While new trade deals with close allies such Australia and New Zealand should be easy to attain, improved market access to countries with a combined population of 30 million people will be scant compensation for restricted trade with 440 million in Europe.
Securing new deals with emerging markets such as India will also be problematic. Mrs May’s visit to New Delhi last November to sound out the prospects for an enhanced relationship misfired, largely due to the irreconcilability of her own insistence on controlling immigration with her counterpart Narendra Modi’s demand for visa restrictions on Indian students and businesspeople to be relaxed.
In addition, post-Brexit Britain would have to directly compete for Indian business with the EU, which remains India’s largest trading partner and is seeking to revive talks on a free-trade agreement currently on hold due mainly to London’s strict visa regime for Indian nationals and insistence that New Delhi drop protective tariffs against specialised UK exporters.
While Britain’s traditional allies in the Arabian Gulf will welcome expanded trade, this factor has to be balanced against the UK’s uncertain future relations with the world’s largest single market. Britain might no longer be able to exert the same influence over local issues such as the Iranian nuclear programme without its former EU partners. The option of a closer partnership with the US poses its own risks given Donald Trump’s volatility and the unlikelihood of any British government seeking a repeat of the recent Iraq war experience.
In addition, Mrs May’s quest for a “global Britain” that is committed to free trade and open markets will be hard to square with her commitment to clamp down on inward migration. With “take back control” serving as a rallying cry for the more strident Brexit supporters, Britain is allegedly in the grip of an immigration crisis despite evidence from reliable sources such as the Office of National Statistics that new arrivals from the EU and beyond actually make a net contribution to the economy and offset the average overall ageing of the population.
Nevertheless, Mrs May is determined to reduce immigration totals artificially pumped up by the inclusion of the foreign students studying in the UK’s world-class higher education system.
The government’s apparent willingness to jeopardise the international success of its universities starkly illustrates the contradictions needing resolution. In addition, the mooted new trade deals with partner countries would mean easing existing visa restrictions. Ultimately, assuming the success of the Article 50 talks, Mrs May might have to explain to her voters why immigration would have not fallen despite her best efforts.
There is the added prospect of Downing Street’s control of the Brexit process unravelling as the Article 50 negotiations play out. With the pro-Brexit faction of the Conservative Party currently in the ascendancy and the opposition Labour Party consumed by internal conflict, parliament has not sought to impede Brexit while Mrs May and her ministers grope for a way forward. However, this quiescence is likely to fray if the two-year negotiating period fails to secure a deal that would safeguard the economy. Of equal seriousness, the call by Nicola Sturgeon, leader of the Scottish Nationalist Party, for a new referendum on Scotland’s independence threatens the actual disintegration of the UK.
In recent months, London has periodically sought to impress on the EU that in the event of the Article 50 talks failing, Britain may slash taxes and deregulate its economy in the search for new trade and investment.
However, the threat may become a self-fulfilling prophecy in which Britain is forced to compete with its rivals by undercutting them. Given that many voters supported Brexit to protest against enforce austerity since the financial crisis, the prospect of a dismantling of Britain’s welfare state and the resultant further impoverishment of many people could provoke a severe political backlash.
External events could still come to Britain’s rescue. Elections in Europe, particularly the unpredictable race for the French presidency, could generate a shock sufficient to encourage a workable compromise over future relations. An intensified terrorist threat, or renewed sabre-rattling from Vladimir Putin’s Russia, could also reaffirm the value of Britain’s diplomatic, military and intelligence capabilities to the other EU countries.
In the meantime, Mrs May has to carefully navigate a path through a metaphorical minefield. Contrary to the assertions of the hardline Brexiteers, the government remains very much dependent on the goodwill of neighbours whose tolerance has been strained by the often xenophobic and stridently anti-European tone of the debate in Britain. Far from promising a bright new dawn, Britain’s conduct of the Article 50 negotiations over the next two years could well turn out to be a more or less desperate exercise in damage limitation.
Stephen Blackwell is an international politics and security analyst
