Thursday, 27 April 2017

As the EU finalises its negotiating guidelines, it's time for Brexiters to get real

The future of Britain is going to be shaped to a far greater extent by Saturday’s EU-27 Council meeting than it will be by the June general election. That is one of the many ironies of the Brexiter mantra of ‘taking back control’, because whilst the chain of coming events was begun not by the EU but by the British referendum, the shape of those events will be very much down to the EU.

So insular has the discussion in the UK been before and since the referendum that one might think that Brexit is simply a matter of the UK formulating its demands. The EU will then fall into line because ‘it’s in their interests’ or ‘it’s in Germany’s interests’ or even because ‘it’s in German’s car industry’s interests’; and anyway because ‘we’re the world’s fifth largest economy’. There are many versions of this wishful thinking, all of them completely devoid of any understanding whatsoever of how the EU – or the world in general – operates. If it was how they think, then Britain would never have left the EU, since doing so is so far at odds with both our national and business interests.

It’s true that in the immediate aftermath of the referendum Britain might have been able to pursue a soft Brexit of single market membership. That would have taken considerable diplomatic and political skill, but it might have been achievable. Instead, everything the government has done since then has had the effect of making goodwill and room for manoeuvre disappear. And not just the government. EU leaders (and their electorates) see and have disdain for the infantile headlines of the Brexit press, and they don’t simply laugh off Farage’s oafish rudeness, on the odd occasions he turns up at the European Parliament, or Johnson’s boorish buffoonery about ‘prison guards’ and ‘Prosecco exports’.

So whilst Britain has been engaging in an orgy of stupidity and insularity, the EU has, almost since the day after the referendum, been quietly and consistently developing its stance, as explained in this excellent three-part summary of the EU’s position by David Allen Green of the FT. It is a stance that has changed very little from what was indicated before the referendum, and every leave voter who cared to could have known in broad terms what it would be. None of them can say there was no warning.

The time for wishful thinking, gutter press headlines and vapid slogans ended when Article 50 was triggered. Since then, Brexit has come face to face with reality. Donald Tusk’s immediate response was polite in tone, but uncompromisingly plain in content. Primary issues to agree would be the rights of EU citizens in the UK, the (or at least the methodology for calculating the) British exit bill for commitments already made, and Northern Ireland. Exit terms would have to be, at least, progressed first to a degree acceptable to the EU (not the UK, the EU) and only then could there be the beginning of talks on future terms, including trade. Interestingly, almost immediately the British government accepted this definition of process, even though it was exactly the opposite of what they had set out in the A50 letter, and the implications for the time frame for a trade deal that went with it. Reality bites #1.

The European Council draft negotiation guidelines in full contained greater detail, but no surprises save for the mention of Gibraltar (which I have discussed elsewhere), including emphasis that no sector-by-sector single market membership would be envisaged and that no bilateral talks between members of the EU-27 and the UK would be allowed. Again, both of these had been hoped for and even expected by the government which, again, almost immediately accepted that it would not be so. Reality bites #2.

Unless Saturday’s meeting produced something unexpected (and reports of the Luxembourg pre-meeting today suggest not) we already know that it will be likely to endorse the draft guidelines, albeit that leaks suggest some hardening, especially on financial services and on the issue of EU nationals in the UK. On the latter, this is likely to include a requirement for a quicker and simpler citizenship process and the guarantee of their legal rights. There is a particular, and instructive, symbolic importance to this. The EU is negotiating for itself and its citizens. That should seem obvious, but it points up both the determination of the EU to negotiate en bloc, and the fact that this is not going to be like all the EU negotiations of past decades where the UK has been negotiating as a member state and, very often, able to shape the nature of the EU. Now, there are very clearly two sides across the table. Reality bites #3.

The fundamental underlying issue is one that almost every EU spokesperson has made clear before and since the referendum. There will be no deal agreed by the EU in which Britain has a better situation as a non-member than it would have as a member of the EU. That logic is simple and understandable. But that does not mean that Britain has nothing to negotiate for – there are better and worse versions of a 'less good' situation than membership.

There are two great dangers for Britain now. One is that key parts of economic and social activity simply pack up and go without waiting for the outcome of the negotiations, with long-term and serious consequences. There is already evidence of an academic brain drain, with all that that implies for British pre-eminence in research, especially scientific and medical research, and its very successful university ‘export business’. Likewise, plans to move financial services jobs out of London are proceeding apace, with all that that implies for the already very eroded and fragile UK tax base and, hence, for public services.

This first danger might be minimised if the second one is avoided. To put it bluntly, Britain – and Brexiters in particular – have got to get real, and quickly. The crazy reaction to the mention of Gibraltar in the draft guidelines is an object lesson in what needs to be avoided. In particular, the danger now and in the coming months is that Brexiters in politics and the press whip up the idea that the EU is ‘punishing’ Britain for leaving. That is nonsense, and as Tusk and others have repeatedly said there is no need for punishment: Brexit is punishment enough. Brexiters of course will disagree and see Brexit as no punishment at all. Fine, but in that case accept that leaving means leaving, and that the EU will pursue its own interests which do not, now, include us, and drop any talk of being punished for a decision that you made with all the facts available to you.

This is a big ask of Brexiters, because it goes against the victim mentality that propelled them to victory in the referendum. But they need to own that victory now. They frequently complain that ‘remoaners’ are talking down the country and seek viciously to silence them. But the real damage to the country comes from Brexiters refusing to deal in a detailed, pragmatic way with the consequences of the choice they have made. Every screaming headline and every bellicose punch-drunk interview from a Brexiter politician damages us more. Taking back control requires, first, a degree of self-control and, second, an acceptance that having, in their terms, done so by winning the referendum, they now have to face the realities of what it means.

Update (30 April 2017): Finalised guidelines did, indeed, change little apart from those areas expected. In the meantime, Theresa May's talk of the EU-27 'lining up' against UK indicative of exactly the 'punishment' rhetoric I warned of.

Tuesday, 25 April 2017

The Brexit election: where the opposition parties stand

It seems almost inevitable that the Tories will win the election and, probably, with an increased majority. But that is not certain. This is an election like no other, for many reasons. The scars of the referendum are not healed and, as happened in Scotland after the independence referendum, that can have big effects. Moreover, each of the main parties is positioning itself away from key elements of its core support: Tories by pursuing a Brexit agenda that liberal and pro-business Conservatives don’t endorse; Labour with a hard Left and apparently Brexit-acceptant agenda that centrists don’t want. The statistics are clear enough – 40% of 2015 Tory voters voted remain (and more than that will have envisaged soft Brexit); 65% of 2015 Labour voters voted remain.

There are many other factors in play. Party allegiance amongst voters has been breaking down for years. Some potential Tory voters will be upset by May’s reaffirmation of the overseas development budget and lack of reaffirmation of the pension triple-lock and the commitment not to raise taxes. Others will assume a Tory victory is inevitable, and so will not vote. Others still may find May’s socially awkward and distant campaigning style unappealing and, possibly, the prospect of a triumphalist win against the Labour underdog distasteful. Then again, many who voted leave are not habitual voters at all – some even believe that the referendum means that Britain has already left the EU - whereas many who voted remain are highly motivated to vote in this election, and will do so tactically to bolster their cause. It’s also unclear to what extent 2015 UKIP voters will switch to the Tories in support of hard Brexit, stick with UKIP out of mistrust of Tory Brexit credentials, or just not vote at all.

There are many possibilities and permutations, but my sense is that it is just possible that the result will not be the Tory landslide expected (we’ve certainly seen enough in recent months, from Brexit to Macron, to be wary of predictions). Whether this is true or not, what is the case is that those elected to the new parliament will be able to claim a mandate to argue for the policies they were elected on. This means that it matters what stance they take in their manifestos as it will shape what kind of freedom of action they have in the new parliament, whatever its composition.

For Tories – depending on what they say in their manifesto – that may mean being tied to the White Paper version of Brexit and make it more difficult for them to argue for a ‘no deal’ crash exit, as I argued in my previous post. Labour’s position is much less clear and – surprisingly, given the recent history of the Tory party – much more anguished. Today, their Brexit spokesman Keir Starmer has tried to clarify it, but it remains obscure and muddled (see this excellent analysis from Ian Dunt) except for offering an immediate guarantee of rights to remain for EU nationals in the UK and commitment to some of the non-market EU institutions such as Euratom.

Starmer appears to be saying that Labour would leave all negotiating options on the table, rather than following the government’s policy of ruling out single market and customs union membership. That is not unreasonable, but at the same time he is saying that Freedom of Movement of people must come to an end. If so, that makes single market membership impossible. It is just possible that what he has in mind is some negotiation of more stringent EEA emergency brake rules on immigration. That is a possibility that I outlined in an early post on this blog and, even now, it may have some mileage. Then again, the EU’s position is probably harder and less flexible than it was – partly because of the way the government has conducted itself, although a new government might have space to shift that. But Starmer isn’t, in any case, saying in terms that this is what a Labour government would seek and it’s only a possible reading of what he is implying.

Moreover, it remains very unclear whether Corbyn and McDonnell are on board with it. Corbyn says virtually nothing about Brexit and last week McDonnell was waffling on about seeking ‘tariff free access’ to the single market which goes nowhere near the issues that even the government seems, belatedly, to have understood about non-tariff barriers and regulatory harmonization. Starmer at least seems to understand what the issues are even if his articulation of them is so strangulated as to be all but incomprehensible – presumably precisely because his party leadership either does not endorse or does not understand those issues. The strong suspicion is that the leadership retain the traditional Bennite hostility of their wing of the Labour Party to the single market. And whatever their policy now, having voted to trigger A50 their anti-Brexit credentials are weak.

The LibDems Brexit policy is much clearer, but it has its own problems. They want a referendum on the final deal with the option not just of seeking a further negotiation but of reverting to EU membership. But this is less plausible than it seems. Firstly, because at the moment it is not clear whether A50 is reversible. And even if it turns out, legally, to be so, what would that mean politically? Could either the UK or the EU at the end of a long, complex and very likely acrimonious set of negotiations simply go back to the status quo ante of not just EU membership but all of the particular UK aspects of it (e.g. exemptions from Euro, Schengen)?  So even were there to be such a referendum, then assuming a Tory government the choice will be between the deal on offer or no deal at all. Since no deal at all would be catastrophic, the only viable option will be to vote for the deal on offer, no matter how bad for the UK it may be.

Thus a far more viable position to argue for would be a second referendum before negotiations get started. The argument would be something like this: ‘in June 2016 the British people voted to leave the EU. Even when you buy an insurance policy you are allowed a cooling-off period. The decision to leave the EU is a major one for our country. So we want to check that it is the decision you want and will hold a second and final referendum asking you again. But, also, last year's referendum did not ask you what you wanted to happen afterwards, so we are asking you that as well: specifically, do you want to stay in the single market or not?’

If that seems impossible given what the LibDems have already said about accepting the result of the 2016 vote then, at the very least, a more viable position than the current one would be to say: ‘in June 2016 the British people voted to leave the EU and this will be happen. But you were not asked what you wanted to government to negotiate for you after leaving, so we are asking you now whether you want to leave the single market or not?’

Clearly it is implausible that at this stage, when manifestos are being drawn up and their message has already been framed, the LibDems will change their policy in this way. Nevertheless, seeking an early vote on whether to pursue single market membership makes more sense than a late vote on exit terms. The same applies to the Greens, the SNP (although for them the issues involved are different and, in particular, bound up with the case for a second independence referendum) and other parties (such as Plaid Cymru, UUP, SDLP) which seems to want to retain single market membership on leaving the EU.

The tragedy in all this, as I have argued many times before on this blog, is that remaining in the single market and customs union would have been the most consensual and sensible way of responding to the very close referendum result whilst also honouring it. If David Cameron’s decision to call the referendum was the greatest strategic error of any modern British Prime Minister, Theresa May’s decision to interpret the result in such a partisan and damaging way must run it a close second. This election will - most likely - cement that decision, but the way that the other parties frame their stance now will shape what kind of opposition she faces.

Friday, 21 April 2017

The Brexit election: ultras beware?

Like most political surprises, the decision to call a general election already seems entirely predictable if not inevitable. It is not just the irresistible prospect of smashing the Labour Party whilst it is in chaos, it is also the possibility of killing off the UKIP threat that has haunted the Tory party for years. The latter, in fact, is one obvious dividend for Theresa May’s Damascene embrace of the hard Brexit cause. And of course a fresh election would free the government of the 2015 manifesto pledges which place so many constraints on fiscal policy.

What is less obvious is how the election relates to the Prime Minister’s overall Brexit strategy. Her stated aim of overcoming parliamentary opposition to Brexit is manifestly absurd. There has been very little such opposition and the government has easily overcome it. The sources of that opposition in the Commons, the SNP and the LibDems, will be likely to remain or even possibly to increase as a result of the election. The House of Lords might be slightly less willing to use what limited power it has in the aftermath of a general election, but as the Article 50 vote showed it was in any case reluctant to do so. As for Labour, their position insofar as it can be understood at all, seems to be identical to May’s in terms of leaving the single market and the customs union and, certainly, to present no challenge to the government at all.

Nevertheless, many Tory politicians as well as the Brexit press seem happy to parrot the line that what is in prospect is the crushing of Brexit ‘saboteurs’ and the ‘silencing’ of dissent. And, no doubt, this latest grotesque outbreak of what I have called elsewhere Brexit McCarthyism would appeal to the PM if it were likely to be successful. Her basilisk-like appearance during the House of Lords debate is testimony to that, as is the extraordinary and unnecessary length she went to in attempting to avoid an A50 vote. But she must be aware that the reasons she has given for the election don’t make any sense in terms of Brexit opposition. Instead, it’s the things that she can’t say that make her decision explicable.

As with so much else in the story of Brexit, what is at stake is the internal management of the Tory party’s longstanding splits on Europe. The smallness of the majority makes these, rather than the opposition parties, the problem. And that problem lies not with the Tory remainers, who have failed to win any concessions and been routed already, but with the ultra Brexiters. May has found, as did Cameron before her, that they cannot be appeased. Once, they just wanted to leave the EU but stay in the single market. But on winning the referendum that was not enough. Thus May embraced the hard Brexit of leaving the single market and seeking a trade deal but now finds that the ultras are pushing for no deal at all.

More specifically, ever since the White Paper was published I have thought that May’s Brexit strategy would in due course run into problems with the ultras. As I wrote at the time, the plan seems to be to re-create by different means (and at great expense) many features of the single market, and since then even the commitments on immigration seem to have been softened. Moreover, May now seems belatedly to have realised that there will have to be some form of transitional period between leaving the EU at the end of the two year A50 period and the beginning of any new deal, and to have accepted that the EU will not enter into parallel ‘exit and future’ talks. The ultras have been muted about this so far, but when the negotiations begin – especially as the first item is likely to be the exit bill – this will not last. They will then start pushing hard for the ‘no deal’ scenario that May once also entertained but has now apparently retreated from, presumably having realised that it would be an economic doomsday for Britain.

So the (for May and the Brexit press) unsayable explanation of the election is to undercut the ultras before they can undercut the government. Having campaigned and presumably won an election on the basis of the White Paper plan and not the ‘clean Brexit’ (aka ‘no deal’) which UKIP will campaign on, the ultras will find it harder to oppose May when she pursues that plan. And if, as expected, she has an increased majority then it will be difficult for them to succeed if they do try to oppose her. That assumes that the new Tory MPs are not also ultras but even if they are, junior and ambitious MPs are much easier to control than the old salt veterans of the Maastricht debates, especially by a newly installed, dominant and, reputedly, loyalty-obsessed PM.

This interpretation of what the election means is shared by many within the EU and also within financial markets, who believe it makes a softer Brexit more likely. These terms are relative, of course, in that ‘softer Brexit’ now means what used to be called hard Brexit, but it is softer than the ultra-Brexit position. This is why the pound, which has directly tracked every soft versus hard signal since last June, rose after the election was announced.

None of this is good news, except in the limited sense that indicates that May is trying to avoid the very worst case scenario that the ultra-Brexiters would force on her if they could. This seems consistent with the more general sense in recent weeks that May (and David Davis) are getting more realistic about the immense difficulties and dangers of Brexit. The plan – which the EU may or may not go along with – is a fudge which will leave both committed remainers and leavers dissatisfied but which may well be sufficient to keep the Tory party together and to satisfy enough of the electorate that Brexit is being pursued in a way which they can support or at least live with.

In that limited, tactical, sense May’s decision is an adroit one. But it may backfire. For one thing the outcome of the current election cannot be absolutely guaranteed – especially if the turnout is very low. In some ‘safe’ Tory seats where the remain vote was high, the LibDems might win and, more generally, it shouldn’t be forgotten that some 40% of those who voted Tory in 2015 also voted remain; nor that many leave voters are not habitual voters in general elections. That is highly unlikely to prevent the Tories winning but it’s certainly conceivable that the net result does not increase the government’s majority by very much. If so, May will have lost one very strong option in her arsenal as the negotiations progress, since it seems inconceivable that she could call another election within the A50 period. The ultras would then be in a strong position. On the other hand, if the outcome is a large increase in the Tory majority and if my analysis here is correct then it is a pleasing irony to think that the saboteurs May is seeking to crush are the ultra-Brexiters who are currently so enthusiastically supporting her.

Friday, 7 April 2017

How long will a Brexit trade deal take?

The most remarkable Brexit development this week has attracted surprisingly little attention. Interviewed by Faisal Islam of Sky News during her visit to Saudi Arabia, the Prime Minister revealed a key fact about the forthcoming negotiations. Namely, she indicated that there was no prospect of a trade deal with the EU being signed within two years, and that if and when it happened it would be with the UK as a third party (i.e. outside of the EU) rather than as part and parcel of the Article 50 negotiations. This means, in turn, that it will fall under a different process which requires unanimous ratification by EU member states, rather than the qualified majority of the Council (plus simple majority of the European Parliament) needed to agree the exit terms.

In one way, this is, indeed, not newsworthy. Anyone with any real familiarity with the issue already knew that this was how things would be, and it was heavily trailed by the EU during the referendum campaign and since. Article 50 only covers the exit terms (albeit “taking account of” the shape of future arrangements) and it would actually have been quite conceivable that no trade talks would even begin until after these had been settled. In fact, the EU position on this has turned out to be relatively soft, with the Council (and now the Parliament) agreeing to begin talks on future trade once they judge that ‘sufficient progress’ has been made on the exit terms negotiation.

However, what makes Theresa May’s interview remarkable is that hitherto she and the government had at the very least implied that exit and trade talks would be completed within two years, and certainly had asked in the Article 50 letter that they would occur in parallel from the beginning of the Article 50 period. It’s true, as Ian Dunt – one of the few journalists to have picked up on the full significance of the Sky interview – notes, that May had been rather ambiguous in the past. She had talked of ‘reaching an agreement’ within the two years which would then take longer to implement. That could, at a pinch, mean just the outlines of an agreement but, as Dunt points out, implementation could not begin until agreement had been completed. So the strong implication was undoubtedly that pretty much everything would be agreed within the two years. That is now ruled out, as are parallel talks from the outset of the process.

Whatever ambiguity there may have been in the government’s position until now, there is no doubt at all that Brexiters claimed – both before the referendum and since – that a trade deal, and moreover an advantageous trade deal, would be easy to achieve, and in less than two years. For example, last October Boris Johnson claimed that 18 months was “absolutely ample” to get a “great deal”. As recently as 30 March veteran Eurosceptic Peter Lilley said that “there’s no reason why it [a trade deal with the EU] should take more than ten minutes”. Even taken as a figure of speech that is clearly absurd. Similarly, as I have pointed out in another post, many leading Brexiters including Lord Lawson, David Davis and Peter Hargreaves all indicated during the campaign that a quick trade deal was not just possible but virtually guaranteed.

That this is now demonstrably untrue is extremely important. During the referendum campaign voters were repeatedly told that trade could be protected and that to say otherwise was ‘Project Fear’. Most mendaciously of all, the Vote Leave campaign actually promised voters that a new deal would be agreed before the legal process to exit was started. They were misled, as on many other things, and that matters in itself. It also matters because the length of time it will take and the uncertainty about the terms on which it will happen, if at all, directly affect companies’ willingness to invest and their decisions about relocation. In many cases, as is being seen in the financial sector, relocation processes take a long time and must therefore be decided on well before any completion of trade negotiations. With those relocations go jobs and taxes.

So now that May has acknowledged that there will not be a trade deal in two years, how long will it take? People are still being misled. The Daily Mail report of the PM’s comments was that there would be deal 'ready to sign' at the end of two years. But that is very clearly not what she said or implied. The best estimate would still seem to be the two to ten year period which Sir Ivan Rogers was hounded out of office for reporting in January. He has since suggested that a ratified deal by the mid-2020s is likely. It is worth noting that at the same time he predicted that the EU would not allow a sector-by-sector single market deal, and that has now been proved right by the EU Council’s draft guidelines.

Brexiters like Peter Lilley and Lord Lawson often argue that this deal can be much quicker than a normal trade deal because standards and regulations are already harmonized between the UK and the EU and it is this which takes the time in trade negotiations. But that misses the point that, precisely, this will not be a normal trade negotiation. Normally, the intention is to improve the ease of trade. This time, it is to erect barriers. If the Brexiters mean that the UK can in effect stay in the single market in every way except for freedom of movement of people and CJEU jurisdiction then they have misunderstood what the EU means by ‘no cherrypicking’. The points of long dispute will not be about current standards harmonization, they will be about, primarily, future standards harmonization, dispute resolution systems and possibly a preferential immigration system for EU citizens. Of course that could be shortened simply by agreeing to the existing system – which would mean staying in the single market! But that, of course, has been rejected by the government. Moreover, because this deal will need unanimity there will have to be votes in all national and some regional parliaments before ratification. That all takes time and can be unpredictable, as the recent CETA experience has shown.

So for all these reasons the Rogers’ estimate of timescale still looks reasonable. This, then, means – and May, again, seems to have conceded it is so – that there will be a long period during which the UK remains within the single market, under CJEU jurisdiction and with freedom of movement. It will not be a ‘no deal better than a bad deal’ WTO scenario, as talks will still be ongoing. An additional aspect of this is that it will also mean that the UK is still in the customs union and, therefore, that no new trade deals with non-EU countries can be signed in the interim. How long the interim will last is impossible to say. The EU Parliament this week suggested a maximum of three years. I suspect that that could be negotiated to be longer but even if not it still takes us to 2022.

If so, that is well beyond the 2020 General Election and it is by no means inconceivable that an interim period would even go beyond the 2025 General Election; some have suggested a seven-year EEA interim after completion of EU exit in 2019, taking us to 2026. The political consequences of that are very difficult to imagine or predict. One is that since the UK will have left in 2019 it will no longer have any representation within the EU and certainly no MEPs in the European Parliament (a strange and ironic way of ‘taking back control’).  How will Tory Eurosceptics react? Will the Tories even be in power, and if they are will Theresa May still be PM? What will British politics and attitudes to Brexit look like in 2020, let alone 2026?

To get a sense of how much things can change in such a time frame, just suppose that the interim period did go on until 2026, ten years after the referendum. Then consider what was happening in 2006, ten years before the referendum. That was when David Cameron in his first conference speech as Tory leader warned his party to stop “banging on about Europe”. O tempora! O mores!

Sunday, 2 April 2017

Lessons from Gibraltar

The response in the UK to the EU Council’s draft negotiation guidelines has been instructive. Most attention has been focussed on the paragraph (22) relating to Gibraltar, to the effect that no UK-EU Brexit agreement will apply there without the agreement of Spain*. This gives Spain a powerful voice in the Brexit negotiations and calls into question the sovereignty of this disputed territory, as well as indicating that the EU is likely to side with Spain in that dispute. Gibraltar, which voted overwhelmingly to stay in the EU (and, in a previous referendum, to stay in the UK) is significant not least for being the only part of the UK other than Northern Ireland to have what on Brexit will be a land border with the EU. (Readers of the blog will have been alerted to this facet of Brexit, as I pointed it out in my post in last October; for a detailed briefing on the quite complex issues relating to Gibraltar and Brexit see this report by Joe Carberry and Jonathan Lis).

The first instructive point is that, although it was certainly not a major issue during the referendum, the dangers of Brexit for Gibraltar were pointed out by the Remain campaign. In May 2016 the then Foreign Secretary Philip Hammond said:

“I genuinely believe that the threat of leaving the European Union is as big a threat to Gibraltar's future security and Gibraltar's future sovereignty as the more traditional threats that we routinely talk about.”

The reaction from Brexiters was furious. Liam Fox, now the International Trade Secretary, was enraged that the possibility should even have been mentioned, saying “I think there are limits to what you can and cannot say in any campaign that goes way beyond acceptable limits” (sic). All this was reported in the Daily Express under the inevitable headline about ‘Project Fear’.

We can now see that Hammond’s concern was well-founded, and that it was perfectly legitimate to raise it. The same, of course, can be said of most of what was dismissed as project fear, as I pointed out in my post on the triggering of Article 50.

Moreover, and this is the second instructive point, whilst Brexiters may have shouted it down during the campaign they cannot do so now. As the slogans and false claims meet reality, reality wins out. The EU have, as a matter of fact, decided to take this line and now it has to be dealt with. No amount of bluster or outrage can change that. Screaming headlines in the British press are not just ineffective against the EU but, even, harden feeling against the UK. So this is, in microcosm, indicative of the entire shift that has occurred as a result of the triggering of Article 50. As I wrote in my most recent post, Brexiters now have to take responsibility for the consequences of their decision.

The EU’s stance on Gibraltar is a lesson in realpolitik. Of course both the EU and individual member states such as Spain are going to seek to pursue their own interests. On the Gibraltar issue, the UK did exactly the same thing at the time of Spain’s accession to the EU in 1986 (insisting on an open border). Brexiters can, and do, decry this as ‘bullying’ and even, in their hermetically sealed logic, as ‘proving’ that it is right to leave. But that doesn’t change anything: welcome to the real world of international relations (to which irresponsible and ludicrous implications by Brexiters of possible military action contribute nothing good).

In fact, although attracting less headlines, the EU Council’s statement in several other ways underscored the reality of the power plays which will now unfold. In particular, the UK’s desire, expressed in the Article 50 letter, for parallel talks on exit and on future trade has been rebuffed. The latter will only occur once the EU deems that sufficient progress has been made on the former, although that is a softer position than insisting on the complete conclusion of exit talks before future talks. Similarly, the Brexiter fantasy of sector-by-sector access to the single market was emphatically squashed, as was the possibility of bi-lateral negotiations between the UK and individual EU-27 states.

None of this, however, makes the EU’s stance ‘punitive’, as this piece by Vincenzo Scarpetto of Open Europe explains, and it should be understood in the context of a negotiation as discussed in this excellent analysis by Peter Ungphakhorn. It just means that the UK cannot dictate terms in a vacuum as Brexiters imagine. Moreover, completely undiscussed as far as I am aware, section five of the statement makes it very clear that whilst the UK remains in the EU it must “remain loyal to the Union’s interests”, something which I suspect in the months to come will become a matter of some significance.

There is another lesson from Gibraltar row. Brexiters always seem to think that dealing with the EU means, primarily, dealing with Germany and to a lesser extent France. But although these are indeed very significant, the EU is an association of member states and is not ruled from Berlin. The failure of Brexiters to understand this grows out of their narrative of how the UK lost sovereignty from EU membership whereas, in fact, the EU was an arena in which the UK (in particular, one might argue) could exercise and magnify its sovereignty. At all events, the coming negotiations will show that each country within the EU-27 will have some degree of influence.

Spain will be especially relevant not just because of Gibraltar but also because of the large numbers of British residents there and because of their stance towards Scottish independence, something, not coincidental to the Gibraltar row one assumes, revised just today. Ireland, for obvious reasons, will also be highly influential, but each member will to some extent have the opportunity to pursue its own agenda within the negotiations. All of the compromises and trade-offs that Brexiters bemoan about EU membership will not cease, but now the UK will face them alone across the negotiating table rather than as a powerful member, with powerful allies, within the EU. In a similar way, having for years mocked the EU Parliament as a ‘rubber stamp’, Brexiters now face the prospect that any exit deal will be subject to the approval of that body which is drafting its own red lines on what is acceptable.

We are going to have years, now, of Brexiter outrage at having to deal with the inevitable consequences of their policy, as if these were not both predictable and, in fact, predicted. Like a toddler’s tantrum, “it’s not fair” will be the repeated refrain when the world proves not to be amenable to their wishes. And this tantrum will not just be about the EU. Brexiters are excited by the possibility of regaining ‘our seat on the WTO’ but whether or not Brexit means ‘trading on WTO terms’ that is going to bring many more encounters with a reality that does not fit with Brexiter fantasies. An early indication of that came last week with a question from Indonesia to the WTO Agriculture Committee about post-Brexit trade issues. The US, Russia, China and Argentina have all “registered an interest” in this matter, which has potentially far-reaching implications for British agriculture. That may seem an arcane matter, but it shows how post-Brexit Britain will have to navigate a whole new world of complexities which will be as much, or more, political than economic. In this sense, too, the furore over Gibraltar is an instructive pointer to what the future holds.

*Note: there is some complexity in decoding what this means. The Sky News political editor Faisal Islam in a series of tweets today has raised the suggestion that its true meaning relates to any future trade deal under A218, rather than to A50 negotiations. This seems consistent with the wording of paragraph 22 of the Council guidelines which speaks of ‘after the UK leaves’ but is also puzzling (to me) in that A218 deals require unanimity anyway, so Spain would have had a veto already. No doubt more clarity will emerge, but at all events the explicit reference to Gibraltar in the guidelines is significant.

Update (4 April 2017): A comment below made me ask myself what the implications for Brexit are for the Channel Islands, something I don't recall having seen discussed. A quick search found this recent report: