Game of Thrones scenes that show what Brexit talks will be like
A vote to leave the EU isn’t the end of a journey, but the start of one. Now that the UK has chosen to quit the bloc, years of bargaining lie ahead.
When Article 50 is eventually invoked – and there’s some debate about whether that will ever happen at all – it would trigger the start of a two-year long negotiation period.
During this time, the UK will try to seek the best terms it can from Brussels.
A quip from one of the EU’s top officials, Donald Tusk, suggests that the UK is in for a bumpy ride. After England’s shock ejection from the Euro 2016 tournament at the hands of Iceland, the European Council president suggested the fixture was an omen of things to come.
“Winter is coming,” he proclaimed on Twitter.
The comment was a reference to the Game of Thrones series, authored by George RR Martin, in which “winter” is really, really cold, lasts ages, and lots of people die.
Fans of the books note similarities to the Latin phrase “memento mori”, which loosely translates as “remember you have to die”.
The stakes couldn’t be higher
Campaigners for Brexit have suggested that there will be a deal with the EU, and that it won’t entail free movement. That rules out the two off-the-peg options that might be available.
The first, so-called “Norway option”, would see the UK re-enter EFTA, of which it was a founding member, and move back into the EEA, with all of the obligations that entails, of which continuing to allow EU citizens to live and work in the UK would be one.
The other choice, the “WTO option”, would need no deal whatsoever. Instead, the UK would go for a clean break from the EU, relying on World Trade Organisation rules to guarantee maximum tariffs on goods.
The stakes are high. If no deal can be arranged, and the UK is forced to rely on WTO terms, then the economic consequences would be severe.
Economic forecasters put the cost to the UK economy at up to 9.5pc of GDP by 2030, compared with a decision to stay in the EU, as trading alliances falter.
Short on troops
It’s worth taking stock of the forces available to the UK, as it prepares to do a deal with the EU.
Lord Price, the minister for trade and investment, says that the UK has around 12 to 20 professional trade negotiators. Dotted around various Government departments, they would likely be roped in to forge a new agreement with the EU.
The UK will need to recruit new troops, and quickly. Not just to forge a new agreement with the EU, but also with all the other economies of the world with whom the UK wants to enjoy good terms of trade.
You cannot just drag trade negotiators in off the street. Modern agreements are incredibly complicated, and written in a kind of legalese that many will be unable to wrap their heads around without experience.
Even seasoned negotiators often come unstuck by the jargon used in trade deals, believing that they have gotten the better side of their counterpart, when the complicated text has obscured from them the concessions they have agreed to.
New staffers would need to go through a lot of training. And they won’t have world-class experts offering instruction.
Trade talks are likely to happen at a time when the civil service is already starved of manpower. It will need to draft new UK laws to replace EU rules and regulations.
The EEA option would make life much easier. While the UK would take back powers over common policies, on agriculture, fishing, justice, security and the like, there would be no need to rewrite all the other rules as well.
If the UK plumps for a bespoke situation – the course we seem to be headed on – resources will become a real issue, with a risk that Whitehall could be overwhelmed.
In short, the UK’s public servants will quickly become stretched, and may appear a little inadequate for the fight ahead.
They’ve got a lot more men
The UK’s capacity for trade negotiations has been atrophied. That’s because we outsourced it to Brussels for decades.
While the British might have as few as a dozen trade negotiators, the EU boasts around 550, Lord Price estimates. This force is already fighting together, on big deals like Transatlantic Trade and Investment Partnership (TTIP).
The EU is also in a better bargaining position. While optimists highlight the UK’s trade deficit with the customs union as a reason that Brussels might offer a good deal, experts warn that this is unlikely to help the British case.
Kallum Pickering, a Berenberg economist, points out that the UK earns 15pc of its GDP through exports to the EU’s other 27 economies. Those economies earn just 5pc of their GDP from the UK.
“In all post-Brexit negotiations, the bargaining position of the EU would be much stronger than that of the UK,” says Pickering.
Cecilia Malmström, the EU commissioner responsible for trade, has a full deck to play with.
Like Tusk, she also mocked the UK after the Iceland game, tweeting that perhaps England’s poor performance was an early sign of a “Brexit effect”.
Making an example
Many in Brussels are already sharpening their swords.
The UK has had one foot out of the door for most of its EU membership, and Brexit is viewed as an opportunity to punish the Anglo-Saxons for their euroscepticism.
Many of Europe’s officials appear to have taken the mud slung their way during the campaign very personally.
In a recent interview, Lord Hill, the UK’s former European commissioner, pointed out that “the other members of the EU have been slagged off fairly royally, and they’re the people who you would be negotiating with” in the event of a decision to withdraw from the EU.
Lord Hill added: “The idea they will fall over themselves to agree the terms of trade, I just think is in the realm of complete fantasy.”
There are plenty who would love to hand out harsh terms. Not just to punish the UK, but as a warning to others who might consider leaving the EU.
Time is short
Whoever writes the Government’s list of demands may find that extracting favourable terms takes much longer than the two-year period granted by Article 50.
David Owen, a Jefferies economist, says that time frame would be “very demanding”, even if France and Germany weren’t scheduled to have elections next year. Which they are.
Owen says: “It is not just a question of agreeing a trade deal with the rest of the EU, but with the 53 other markets that the EU has negotiated free trade agreements, and other countries beyond.”
No deal would mean the UK left out in the cold, without any trade agreements to speak of.
This could get ugly
While the UK might win an extension or two, slow progress would not only put the UK’s economy at risk, but also that of the wider European continent.
Investors are already worried that Brexit could lead to ripple effects across the euro area, leading the single currency to fall alongside sterling against the US dollar.
If Brussels holds out too much, it could end up shooting itself in the foot, and its cruelty might even inspire other countries to join the UK in leaving the EU.
In a bind
The EU referendum result may not be legally binding, but it is almost certain to be politically binding.
The likelihood of the UK remaining in the bloc is low. One solution touted by economists as a way to avoid a damaging recession, the EEA route, is being dismissed by those who lead the campaign to exit the EU.
That Norwegian route would satisfy the question on the ballot paper, and might also be the only attractive option on the table for those who want to unify a divided Britain.
Yet to some that represents rejoining the bloc many just voted to leave. EEA membership would almost certainly mean preserving free movement within the EU and payments to Brussels.