When Britons voted for Brexit in 2016, they were promised a smooth transition to a new economic relationship with the European Union. Now the two sides are hurtling toward a tumultuous split that threatens billions worth of trade and hundreds of thousands of jobs.
An outcome almost no one wants looks increasingly hard to avoid, with U.K. and EU leaders setting Sunday as the deadline for a “firm decision” about the future of the deadlocked divorce talks, and just three weeks until the split becomes final on Jan. 1.
“Divorces are never easy,” Xavier Bettel, prime minister of EU member Luxembourg, said Thursday. “I did a lot of weddings when I was a mayor. But I also did divorces as a lawyer, and it’s always difficult.”
The messy EU-U.K. divorce has been years in the making.
WHAT WAS DECIDED IN 2016? Britain’s 2016 EU membership referendum was dominated by whether the country should quit the bloc it had joined in 1973. What would happen after that got less attention.
“Brexit was a mandate to leave the European Union. There was never a blueprint for what did leaving look like,” said Jill Rutter, program director at the Institute for Government think-tank. Leaders of the pro-Brexit campaign — including Boris Johnson, who is now Britain’s prime minister — said striking a new relationship with the bloc after a U.K. exit would be easy, though they provided few details. When pressed, some leading Brexit campaigners suggested Britain could have a relationship like Norway or Iceland, which have strong economic access to the EU, and in return agree to follow many of bloc’s rules and standards.
WHAT CHANGED? Since the referendum, Brexit has come to be defined in an increasingly narrow way, largely as a result of British politics. Conservative Prime Minister Theresa May, under pressure from the strong euroskeptic wing of her party, declared in 2017 that the U.K. would leave the EU’s single market and customs union, and would end the free movement of people from the bloc to Britain.
That set Britain on course for a more distant relationship with its neighbors than many had realized when they voted. It was still not enough for the hard-core Brexiteers in Parliament, who went on to reject the divorce deal May negotiated with the EU because they felt it kept Britain too closely tied to the bloc. Pro-EU politicians who wanted to keep tight bonds were too divided to achieve their goal.
May eventually resigned in defeat after her Brexit deal was rejected by Parliament three times. She was replaced by Johnson, who took an even tougher line, defining Brexit as the restoration of British sovereignty and “taking back control” from Brussels.
That left the two sides’ room for maneuver in striking a deal even more limited.
WHAT ARE THE STICKING POINTS TO A DEAL? The U.K. left the EU on Jan. 31, but remains within the bloc’s tariff-free single market and customs union until the end of the year, a transition period agreed so the two sides could negotiate a new trading relationship.
After months of increasingly testy talks, there is no agreement on three topics: competition, the resolution of future disputes, and fishing rights. Fishing is a symbolically important, though economically minor, issue. For British Brexit supporters, controlling the nation’s waters is essential. Countries like France and Spain have powerful fishing lobbies that don’t want to lose the access they have now.
Still, both sides suggest they can reach a compromise on fish. The other issues — what constitutes fair competition, and what happens it if is breached — are trickier, because they encapsulate the dilemma of Brexit: The U.K.’s desire for freedom is at odds with the EU’s need to protect its unity.
The EU fears Britain will slash social and environmental standards and pump state money into U.K. industries, becoming a low-regulation economic rival on the bloc’s doorstep, so it is demanding strict “level playing field” guarantees as a condition of access to its vast single market.
The U.K. government sees Brexit as about sovereignty and “taking back control” of the country’s laws and borders. It claims the EU is trying to bind Britain to the bloc’s rules indefinitely, rather than treating it as an independent nation.
The two sides have never really understood one another and now find themselves boxed into corners, making compromise hard. “The trouble for the prime minister is that all his language on sovereignty has been pretty absolutist,” Rutter said. “It’s quite difficult to compromise on sovereignty.”
HOW LIKELY IS A DEAL NOW? Johnson and European Commission President Ursula von der Leyen held talks over dinner on Wednesday and emerged pessimistic, stressing the large gaps between them. They gave their negotiators a few more days and said they would decide by Sunday whether to give up on the talks.
Mujtaba Rahman, managing director for Europe at political consultancy Eurasia Group, still believes a deal is still more likely than not, because the political and economic damage of no-deal would be huge.
“I think if you look at all the key players — von der Leyen, (German Chancellor Angela) Merkel, (French President Emmanuel) Macron, Johnson — I think it’s in all of their interest to do a deal,” he said. “The question is, with the time available, can they figure out a fudge and a fix to this very difficult question on the level playing field? And that, I think, is not obvious.”
WHAT WILL HAPPEN IF THERE IS NO DEAL? With or without a deal, Jan. 1 will bring major change. Citizens of Britain and the EU can no longer move freely to work and settle in each others’ territories, while importers and exporters face new checks on goods and customs declarations.
A no-deal exit will mean vastly more disruption, with tariffs and other trade barriers that would hurt both sides — but especially Britain, which is much smaller and does almost half of its trade with the 27-nation bloc.
Without a deal, there is no guarantee that planes can fly between the U.K. and the EU, or British drivers whoosh through the Channel Tunnel to France. A “reasonable worst-case scenario” drawn up by the British government set out potential food and medicine shortages, clashes between British and European fishermen at sea, and “a rise in public disorder.”
A spokesman for the British prime minister, Jamie Davies, insisted that the government had “made extensive plans for the end of the transition period.” “We have a resilient supply chain,” he said. “That will continue to be the case after the transition period ends, whether with a free trade agreement or otherwise.”