April 3, 2019 - And Now For Something Completely Different

Early April 3 United Kingdom Prime Minister Theresa May met with the leader of the Labor opposition, Jeremy Corbyn, to discuss a common way forward on the UK’s impending divorce from the European Union.
 
Drama ensued. Markets and media immediately swooned that a softer Brexit, in which the UK retains significant links to the EU, was in the offing. One of May’s ministers quit her cabinet in fury over the very idea that the prime minister would speak to an elected representative from across the aisle. In recent days protestors in the hundreds of thousands have descended upon London to protest Brexit, while millions have signed a petition hoping to overturn, stop, or at least delay the process. A particularly fun resolution circulated in Parliament intending to dock May’s pay.
 
(Yes, I’m having an unabashedly good time here.)
 
The May-Corbyn is less “too little too late” and instead “not relevant at all”. It isn’t so much that a softer Brexit is no longer an option, but instead that it was never an option.
 
The first step of the Brexit process has always been not to determine what the British might be happy with, but what the remaining 27 members of the EU might tolerate. Under EU law each and every member state must sign off on the big issues -- such as divorce agreements. It only takes one EU member to force the UK into a no-deal Brexit.
 
Any “soft” deal that grants the UK some of the EU’s benefits without all the EU’s costs and responsibilities is one the Union ruled out from the very beginning. Moreover, the UK’s firmest allies within the Union -- most notably the Netherlands -- have repeatedly and explicitly ruled such deals out for the simple reason that if the UK can get such a deal, so will everyone else, which would render the idea of the EU rather pointless. And since it only takes one country to veto any deal, the idea that the UK has any leverage in these talks is silly.
 
The result has been the “deal” Theresa May managed to negotiate. It obliges the UK to pay into the EU budget and abide by all EU regulations but forfeits any ability to influence what those regulations are. The Brexiteers have a point when they say the deal is worse than membership, but that deal is the only way the UK retains trade access at all. Unsurprisingly, Parliament has voted it down three times.
 
Anything shy of a no-deal/hard Brexit requires EU unanimity, UK government approval and Parliamentary ratification. A no-deal Brexit requires none of that. A no-deal Brexit is the default. So, a no-deal Brexit is where this ends. In nine days.
 
Everything else isn’t simply beside the point, it has always been beside the point.
 
Still, the Brits have obsessed over setting up a bunch of political dominos. It’d be rude to not knock them down.

• May isn’t going anywhere. Normally when a British political leader proves unpopular within her caucus, a vote of no confidence is held within the party to eject him or her. May was subjected to just such a vote back in December. She survived it. According to the Conservative Party’s rules, she need not fear another vote until December 2019.
   
• Nor is May’s government going anywhere. Normally when a government proves unpopular a vote of no confidence is held within the Parliament to eject it. May’s government was subjected to just such a vote back in January. She survived it. While another no-confidence vote is always a risk, its passage would trigger general elections. Not only is this something the Tories want to avoid desperately but resolving elections would take (a lot) more than the nine days remaining before the Brexit crash-out.
   
• Nor can May negotiate a new deal. Parliament reclaimed her power to do that back in March. May is still prime minister, but she no longer has any legal or political influence over the issue of the day.
   
• Nor can Parliament negotiate a new deal, or at least not competently. No party has a majority in Parliament, and that was before the parties started fracturing. Because the government has been stripped of negotiating power, any new negotiating team would have to come from Parliament, but not from the factions of the Conservative party that supports the government. Instead the negotiators would need to come from the anti-government Tory faction as well as the opposition. The leaders of these two groups are Boris Johnson -- the leader of the Brexiteers -- and Jeremy Corbyn, who also supports exit from the EU despite much hemming and hawing. So that option has a bullet in its head right from the get-go.
   
• Nor will the EU shift its position. The April 12 date is already the EU’s second delay, this most recent delay was only of two weeks, and there is no longer anyone in London for the EU to negotiate with. May doesn’t even retain the legal standing to request an additional delay.

Which means those hoping for an outcome that is anything other than a hard Brexit must pray for one of two exceedingly unlikely outcomes:
 
Option A: May herself decides to go back on everything she has felt she had no choice but to try to achieve and unilaterally roll back the Article 50 process. Considering that Parliament initiated the Article 50 process it is unclear if May has such authority; she would immediately find her decision in court. Lawsuits move faster in the United Kingdom than they do in the United States, but getting constitutional law sorted out in less than two weeks is not in the cards. Chance of this both happening and ending in Brexit delay, stall or revocation? Less than 1%.
 
Option B: Queen Elizabeth II skips tea, sashays out of Buckingham, mounts a fabulously over-decorated horse, trots to Parliament, declares her royal non-confidence in the government, flourishes a gleaming sword in an attempt to rally the crowds to dismiss the government. (Ironically -- hilariously -- until recently the Queen had the power to dismiss the government without first summoning the people, but in 2011 the Brits updated some of their laws for the 19th-century and revoked that specific power.) Chance of this both happening and ending in Brexit delay, stall or revocation? Slightly more than Option A.
 
(Of course, this is the United Kingdom. Unlike every other country in the world, the British couldn’t be bothered to write their constitution down. So much in this newsletter as well as much of everything you have ever read anywhere else about the British constitutional system of government is based on interpretation of tradition.)
 
It is time to start thinking about something completely different, about life beyond a (hard) Brexit. To be blunt, the British government has a lot of other things they need to get cracking on.
 
First, they need to overhaul forty years of regulation and legal structures to function in a world beyond the European Union. Once a country joins the EU nearly every aspect of their domestic economies along with every aspect of their import and export systems becomes integrated into EU law. That now all needs unwound and reset to the new reality. Under normal circumstances I’d estimate that’s a half-decade process.
Second, the UK needs to negotiate replacement trade deals. One should probably be pursued with the EU itself, but that is -- minimum -- a decade process. In my estimation the EU doesn’t have that much road left so probably best to go just through the motions. Far more important are deals to be made with every member of the Commonwealth -- where London still holds considerable strategic and political sway. Bilateral agreements with Turkey, Japan, Korea, Taiwan, and Brazil would probably be a good idea as well.
 
Third, NAFTA looms large, and is more important than all other potential deals combined. The Brits were already eyeing bilateral agreements with the United States and Canada, but since the new NAFTA has not yet been ratified, now would be an ideal time to shoehorn the UK in.
 
Fourth, time to figure out how to work without global capital. London serves as the financial bridge between the United States and the European Union. Or at least it did. With the UK out of the EU, that role has ended. Add in the general chaos and pretty much the entire financial district of London will liquidate or decamp. Some will go to the EU, while most will go to the United States. (The terms of any UK-US trade negotiations will force that issue). Expect four-fifths of the City’s financial business to relocate. The Brits need a fundamental economic overhaul.
 
Fifth, as the Americans back away from providing global maritime security, countries are going to discover that guns are at least as important as butter. The Brits have a fairly respectable gun collection, and a fairly robust reputation for using gun policy to complement butter policy. Call it gunboat diplomacy. Call it neo-imperialism. Call it a creative use of special forces. I call it a historical propensity to be a trendsetter in the application of security policy to diplomatic and trade affairs. Very few other countries will think that’s a good idea, but very few other countries liked dealing with the British Empire back in the day either. Just because it isn’t popular doesn’t mean it can’t work. (How the world’s former naval superpower interfaces with the world’s current naval superpower on issues like this will be particularly interesting.)
 
Which brings us to one final issue: the Brits need to move on.
 
All the above requires leadership, and while I may personally have great respect for May’s tenacity and endurance, I am not the person whose respect she needs to earn. Whoever was responsible for negotiating Britain through the thankless Brexit process knew from the beginning it would consume them. May was always going to be a transitional leader, and today she is a spent force. It is time for someone else, and that requires an election.
 
It is a heady time. The global Order is collapsing as the Americans back away. The EU now must confront all the issues that they faced back before the Brits started the Brexit process. Whether the issue is debt or banks or refugees or demographics or trade each and every one of them has the capacity to utterly wreck the Union. Turkey is on the rise. China is wobbling like a spinning plate. Russia is on the warpath. Everything is in motion and the United Kingdom, despite its hang-ups and challenges, is one of the few countries with a capacity for independent action.
 
Whoever rules the United Kingdom next will make the decisions that will shape its role in the world for at least the next half century. Based on your read of the British political environment that is either the most encouraging or most terrifying thing you’ve ever heard.