Theresa May just made a huge strategic error on the timing of Article 50

Theresa May has made a huge strategic error by announcing that the UK will trigger Article 50 in March 2017. That’s because the
timing of the trigger is actually more important than the
substance of the talks themselves, if Britain is to negotiate its Brexit package from a position of strength.

Here’s why.

Article 50 isn’t simply a request to leave the EU. It contains a crucial two-year deadline. The text of Article 50 says, “The Treaties shall cease to apply to the State in question from the date of entry into force of the withdrawal agreement or, failing that, two years after the notification.”

That two-year clock controls the entire negotiation: Anyone who triggers Article 50 is automatically ejected from the EU with or without a special deal. (Unless they agree to a humiliating reversal, or obtain a highly unlikely extension to the negotiation period.)

The most important thing to understand is that once Article 50 is triggered, the EU can filibuster the talks, running out the two-year clock, until Britain is ejected in a “hard Brexit” without any of its demands or requests being met.

The EU is heavily incentivised to give the UK the worst deal possible. They want to keep the rest of the EU together. Therefore the EU needs to teach all the other EU countries a lesson in what happens to anyone else who wants to leave. Which is why they will be happy to see Britain drop out without access to the single market.

Given all that, May’s best move would have been to try her hardest to start negotiations and get an exit agreement in principal before pulling the trigger, making the Article 50 trigger a mere formality sealing the deal.

As it stands that is extremely unlikely to happen. Right now, the EU flat out refuses to talk to the UK until after the trigger is pulled, with Germany’s deputy finance minister Jens Spahn saying on Tuesday: “I honestly can’t imagine any pre-negotiations on substance.”

I cannot go an inch beyond the ‘no negotiations without notification’ principle,” Margaritis Schinas, the chief spokesman for the EU commission’s president, Jean-Claude Juncker said earlier this week.

It is interesting that she uses the word “principle” and not “law,” because there is nothing in Article 50 that prevents negotiations from beginning, or even in large part concluding, before Article 50 is triggered. The text of Article 50 does not prohibit countries from negotiating outside the trigger period. The law says nothing about when talks should take place — before or after.

The EU knows that once the trigger is pulled that two-year clock will begin ticking loudly. The two-year period can be extended, but only by unanimous agreement. The UK cannot unilaterally extend the deadline. It can only stop the clock by withdrawing its Article 50 request — which leaves the UK back inside the EU.

All the advantages lie with the EU in any negotiation that takes place after the trigger is pulled. This is why the EU insists that it “cannot” talk to Britain before Article 50, and will only engage once the trigger is pulled. That is when the decks are stacked most heavily against the UK.

In an ideal scenario for the UK, May would want to hold off triggering Article 50 and begin talks with the EU about what an exit deal might look like, first. Once the 27 countries agreed in principal to a deal they could all live with, May would agree to trigger Article 50 and the UK could quickly exit. After March 2017, the opposite will happen.

Conservative MP Anna Soubry gets this. In a conversation with Business Insider, she used a golf club anecdote to sum it all up:

“We do not hold the cards in this … Imagine if you belonged to a golf club, and you were to say ‘I’m leaving but I’d like to still play at your golf club for free with none of your rules’ — it’s bonkers. They’re in denial.”

The EU negotiations are so big and so complicated there is no way the UK will have a deal in place before March. The government hasn’t even finished hiring all the trade negotiators it needs. So May will go into the Article 50 trigger underprepared, facing an opponent that need do nothing to win. The Financial Times’ Gideon Rachman has a cogent grasp of the price of that failure:

At the end of two years, Britain will be out of the EU — and would face tariffs on manufactured goods and the loss of “passporting” rights that allow financial services firms based in the City to do business across the bloc. The economic damage from this kind of “hard Brexit” would be severe, blowing a hole in the government finances as tax revenues from the City shrink, ushering in a new period of austerity.

This is an editorial. The opinions and conclusions expressed above are those of the author.

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