For the first time since negotiations began on Brexit in March 2017, British Prime Minister Theresa May and other EU member-states have finally come to a consensus. A historic agreement has been reached between the European Union and the United Kingdom that would finally allow both sides to discuss the future trade relationship post-Brexit.
The cost of European unity has been significant for May in light of widespread domestic dissatisfaction with the deal. Members of all major political parties have promised to reject the agreement at its final stages. Current projections have support for the agreement in the British Parliament at just 260 votes, short of the expected 320 needed to get the deal passed. The widespread concern for the agreement on all sides of the political spectrum, including May’s own party, shows that there is merit for the domestic uneasiness surrounding the deal. Consequently, May’s decision to “get on with Brexit” is politically volatile. To preserve her premiership, May must embrace calls to block the deal rather than resist them.
A major criticism of the deal by British MPs is with the Brexit backstop. The backstop keeps the entirety of the United Kingdom in the EU customs union and single market to prevent a hard border from being reinstated between Ireland and Northern Ireland and post-Brexit. For an open border to be maintained, there cannot be regulatory misalignment between U.K. and EU goods moving between both countries. As no other solution has yet been found, the backstop keeps the entirety of the U.K. in the Customs Union indefinitely until a more satisfactory agreement can be reached.
The political leverage the backstop hands to EU negotiators has created outcry among U.K. legislators, including Northern Ireland First Minister, Arlene Foster, who told May to “bin the backstop.” The backstop cripples the U.K. government’s ability to satisfy the issues the public voted to address in leaving the EU, including trade, legal sovereignty, and immigration. At the same time, the United Kingdom is now bound by the decisions the remaining EU members make without any influence over the outcome. Due to the backstop, the deal appeals to no one and accomplishes nothing.
Being locked into the customs union indefinitely means that the United Kingdom is unable to fulfill the promises made to voters who wanted to leave during the referendum. The country will continue to be bound by the “Four Freedoms” — the free movement of goods, services, people, and capital across EU member states’ borders. This means that May is unable to retake control of U.K. immigration policy. Remaining in the customs union also forces the United Kingdom to accept the jurisdiction of the European Court of Justice in order to ensure adherence to EU rules and regulations. Again, this means that the government is unable to restore complete sovereignty and law-making to the U.K. Parliament. Consequently, the backstop further diminishes U.K. sovereignty as it must now follow new European rules without any influence over their formulation.
Under the current withdrawal agreement, the United Kingdom will be unable to negotiate its own bilateral free trade deals. So long as the country remains within the customs union, it cannot diverge from the regulations of goods and services laid down by the European Union. This will make it almost impossible for the United Kingdom to strike its own trade deals. British trade negotiators would not be able to concede anything to a third country that would force it to diverge from EU regulations, which would violate the terms of the withdrawal agreement.
European constraints on the British government has also created unease among world leaders hoping to negotiate their own trade deals with a post-Brexit United Kingdom. Such concerns were echoed by President Donald Trump, who said that the country “may not be able to trade with us.” May should concede the short-term economic costs of leaving the customs union and allow the United Kingdom to negotiate bilateral trade agreements more freely. With the Eurozone in economic slowdown, it is best for the United Kingdom to capitalize on fast growing economies outside of Europe. Britain should not tie itself to European economies in relative economic slowdown when Africa, India, China, and the United States are growing at record rates. The long-term benefits to the U.K. economy far outweigh the short-term negative effects of uncertainty. When May is able to accept this publicly and abandon the withdrawal agreement, she will be able to preserve her legitimacy.
Finalizing the withdrawal agreement is bad politics. Agreeing to pay the $50 billion divorce settlement before future trading arrangements are settled removes major negotiating leverage from the United Kingdom. This further weakens its prospects of acquiring a favorable trade deal with the European Union. The backstop also ties the U.K. government’s hands as it goes into negotiating future economic partnerships, as the agreement concedes that new deals must be negotiated from this standpoint. As a result, if the United Kingdom tears up the withdrawal agreement, it is no longer obligated to do anything. Although conceding the weaknesses of the deal will lead to criticism of May’s negotiating strategy, she should consider that, if she ties herself to the deal and is defeated domestically, her premiership will be in a perilous position.