LONDON — Theresa May’s government will struggle to negotiate a satisfactory trade deal with the European Union once Brexit is officially completed.
Once Britain has officially left the European Union at the end of the Article 50 process, one of its next tasks will be to forge a new trade deal with the European Union, assuming Theresa May decides to do as expected and take the country out of the European Single Market.
In the report which is titled “Brexit: six months on,” Armstrong, the Director of Macroeconomics at the National Institute of Economic and Social Research (NIESR), says that it may be a long time before the UK can begin to negotiate a free trade arrangement with EU leaders as the government is so divided over what type of arrangement to pursue.
“The internal dynamics of UK politics suggest that progress towards a coherent position may be limited. As set out above, there is a fundamental difference of approach between different Ministers: some regard as important priorities retaining the maximum possible degree of economic integration with the EU, in terms of trade, regulation and migration, while for others, who campaigned for ‘Leave’, restoring full control over UK rules and immigration policy takes precedence.”
However, even if the prime minister manages to establish a negotiating position that unites her cabinet, she will then have to deal with years of tough negotiations with EU leaders who won’t be willing to make many concessions.
Ultimately, Armstrong writes, neither the UK nor the EU will come out of negotiations satisfied with the deal — but will sign due to the importance of future UK-EU trade relations.
“Despite the fixation of the UK press on the triggering of Article 50, the key moment in the next six months will not be this but the EU response to it. The likely scenario is one of familiar EU negotiating territory: long interludes of tedium and small print, interspersed with episodes of late-night brinkmanship, leading eventually to a compromise that satisfies no-one but with which everyone can live. However, if the continental consensus is that the UK is still living on Fantasy Island, we could be heading for a showdown sooner than anyone expects.”
The full report was published on Friday and contains contributions from a range of experts and academics.
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