If Theresa May Is Not Prepared to Walk Away from Brexit Talks, How Will She Get a Better Deal Than Cameron?
Comment of the Day

March 30 2017

Commentary by David Fuller

If Theresa May Is Not Prepared to Walk Away from Brexit Talks, How Will She Get a Better Deal Than Cameron?

While Theresa May was serving notice of Britain leaving the European Union, David Cameron was in Kiev discussing his own downfall. His heart was never really in the European project, he said, making him a rather unconvincing salesman during the referendum campaign.

But he skipped over his biggest mistake: entering talks with the EU with no plan for what to do if talks failed. He promised a new deal for UK membership but came away with almost nothing. Now he’s giving speeches for Ukrainian oligarchs. The moral of his sad story: never enter a negotiation unless you’re genuinely prepared to walk away.

Yet the Prime Minister now looks as if she might repeat the same mistake. She has said “no deal is better than a bad deal” but has never elaborated – and shows every sign of being terrified of the “no deal” option. She finds herself in precisely the same bind as her predecessor. She is aiming for success in her negotiations, so doesn’t want to talk about failure. But if the EU senses that she is not serious about walking away, and would sign anything, why should they be generous? 

When Mrs May talks about accepting “no deal” she can only be referring to one thing: World Trade Organisation rules under which countries trade if they have no other arrangement. This, the WTO option, is spoken of as a calamity, the hardest of hard Brexits, the cliff edge, the suicide option – and worse.

That it would mean losing access to European markets, tariffs coming up and walls being built around an island nation that naively thought it was voting for global free trade. Ministers have not dared to calculate what WTO deal might mean.

Which is odd, given that WTO rules are those which govern Britain’s trading relations with 111 countries – including our largest single customer, the United States. It’s hardly a disaster, given that our trade with such countries has grown much more quickly than it has with the EU for the last couple of decades.

There’s no question of Britain losing “access” to European markets: every country from Afghanistan to Zimbabwe can sell its wares in Europe. The only issue is tariffs, and everyone who signs the WTO rules (ie, most countries on earth) agree to keep the tariffs pretty low.

This is the point of the WTO: its rules are a huge achievement, a global ceasefire in trade wars, a worldwide truce that has lasted for decades. So the EU could not, really, punish Britain – now matter how much Jean-Claude Juncker might like to. It is unable to treat us any worse than it treats the US, which would mean – at worst – a tariff averaging about 4.5 per cent on our exports. As high as 10 per cent for cars.

But if Britain retaliated then the sales of BMWs and Renault would be hit hard. A fall in the pound would more than make up for tariffs on our exports, while imports (especially cars) would be pricier than ever. The most difficult question for Nissan’s plant in Sunderland is whether they’d be able to cope with demand.

David Fuller's view

These are obvious points.  The EU played with Cameron, because it knew he wanted to stay in, at all costs. 

If Theresa May allows the EU to handle negotiation procedures, which it seems determined to do, she will be toyed with as well, only more sadistically. 

The problem is, Theresa May would understandably like a civilised and sensible negotiation process, achieving the best outcome for both sides.  Who wouldn’t? 

Unfortunately, this is not a vicarage tea party.  May needs to be very tough. Her team is not. I think she needs a bigger team.  If not, at minimum she should replace inexperienced Amanda Rudd with experienced, articulate Iain Duncan Smith.  

Early on in the discussions, EU reps will put May in a very disadvantageous position.  At that point, she needs to call the bluff and declare that if they are not willing to proceed on a mutually beneficial basis, discussions are over.  She and her team then need to walk out and initiate no further contact.  It might or might not work, depending on how self-destructive the EU wishes to be. 

Here is a PDF of Fraser Nelson’s article.

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