The speech from Cakeland: Did May thread the needle in Brexit address?

Facing a nearly impossible task of pleasing all of the constituencies at home, Ireland, and Europe, Theresa May delivered her third major address on Brexit yesterday — and managed to win at least grudging praise from most of the stakeholders. May stuck to her position for a full-speed-ahead approach to the May 2019 split but stepped back from what critics had called her “cake and eat it too” approach. May warned that the UK would not get everything it desired from Brexit and called on her own Conservative party to prepare itself for some compromises:

Speaking in London, she said she sought the “broadest and deepest possible partnership” with the European Union, arguing that it was in the interests of both sides to make that happen.

She set out five tests she said would be used to guide the U.K. through the next stage of negotiations, which include creating a lasting deal so the two sides would not find themselves back at the negotiating table in the future.

But she also sent a warning to those Euro-sceptics who are determined to see a complete split with the EU at any cost, saying it would be impossible to “get everything we want” from the negotiations, and compromise in some areas was inevitable.

May’s five tests may or may not replace her declared “red lines,” which have caused plenty of friction at the bargaining table, but they overlap them to a large degree anyway. She also declared “five foundations,” but all of these points appear more like general boundaries than specific proposals:

May said there would need to be a “strong commitment” that regulatory standards would remain as high as within the EU – a phrase watered down by Brexit supporters in her cabinet from a binding promise.

Overall, she said, the Brexit process would be governed by five tests: “Implementing the decision of the British people; reaching an enduring solution; protecting our security and prosperity; delivering an outcome that is consistent with the kind of country we want to be; and bringing our country together, strengthening the precious union of all our people.”

And she set out five foundations: “reciprocal binding commitments” to fair and open competition; an independent arbitration system; ongoing dialogue with the EU; ensuring the EU and UK have the means to consult each other regularly; and arrangements for data protection and links so British and EU workers could travel to each other’s countries within a new system.

The speech won some plaudits from her chief counterpart in negotiations, EU’s Michel Barnier. He said he appreciated May’s “clarity” in explaining that the UK would have to compromise to accomplish a friendly Brexit, but implied that she hadn’t actually offered any specific “trade-offs” yet:

Other European Union politicians were somewhat less impressed with the lack of specifics. The Telegraph’s James Crisp noted the rather pungent conversation he had with two of them, especially regarding May’s relationship with Donald Trump:

May’s insisting on withdrawing from both the single market and the customs union in order to allow the UK to control its own trade agreements. That, and regaining sovereign control of immigration, were the two big motivators for Brexit from the beginning. Conceding (or at least implying) that the UK would focus its trade on the EU makes sense for both pragmatic and political reasons. May went further in this speech by suggesting joint standards on customs negotiated between sovereigns and partnerships in a few key areas, such as pharmaceutical and food standards.

However, it also sustains the biggest obstacle for Brexit, which is the border in Ireland. Both the EU and Dublin are demanding that the final resolution of Brexit avoid a “hard border” for travel and trade, which would either require the UK to put the hard border between Northern Ireland and the rest of the UK or to re-enter the customs union — in effect, surrendering control of its borders, at least for trade. Barnier formally proposed a common customs union for Northern Ireland earlier in the week, which May vehemently rejected, although it had been one alternative in a December draft proposal which May had tentatively supported.  May offered two other options instead — again in broad strokes rather than detailed. She calls for a degree of coordination between the UK and EU on customs that might be difficult to accomplish, if not altogether impossible:

Under the first, at the EU-UK border, the UK would mirror EU rules for imports from the rest of the world, applying the same tariffs and rules of origin as the EU for goods arriving in the UK and intended for the EU.

All goods entering the EU through the UK would pay the correct EU duties, removing the need for customs checks at the border.

“But, importantly, we would put in place a mechanism so that the UK would also be able to apply its own tariffs and trade policy for goods intended for the UK market,” she said.

This would enable the UK agree trade agreements with third party countries, a key objective for the UK government post-Brexit.

Under the second option, the EU and UK would “jointly agree to implement a range of measures to minimise frictions to trade, together with specific provisions for Northern Ireland,” she said.

She suggested specific measures for Northern Ireland, saying that smaller traders, who make up 80 per cent of north-south trade, would be able to continue to operate “with no new restrictions.”

Irish Taoiseach Leo Varadkar rejected both as insufficient, although he did appreciate May’s “important reassurances” on the border:

“I remain concerned that some of the constraints of leaving the customs union and the single market are still not fully recognised,” the taoiseach said.

“We will now need to see more detailed and realistic proposals from the UK. Brexit is due to happen in a little over 12 months, so time is short,” he said.

The deputy prime minister, Simon Coveney, welcomed the UK’s reiteration of its commitment to the Good Friday agreement, but said “these commitments now need to be translated into concrete proposals on how a hard border can be avoided”.

George Mitchell, the former American envoy to Northern Ireland, warned that the hard border issue isn’t just about trade — it’s about a still-fragile peace in Ulster:

“The real danger of a hard border is not the immediate resurgence of violence – although that certainly is a problem – it is the change in attitude,” he told BBC Radio 4’s Today programme.

“When there was a hard border, there was very little commerce, very little travel, very little interaction between the people of Northern Ireland and the people of the Republic.

“That led to stereotyping, to the demonisation of others, to attitudes that were based upon acts from the distant past.”

He added: “The open border has meant people traveling back and forth, a degree of social intercourse, of commerce, of people working together. Stereotypes have not gone completely but they have been dramatically reduced.

“The real danger is if you reinstate a hard border, you go back to the days where stereotyping resumes, demonisation resumes and people turn inward as opposed to outwards and they lose the benefits that come from open borders, open societies and trade.”

May appears to have won herself some time and some credit by stepping away from what her critics have called “Cakeland” — the unreasonably sunny predictions that the UK would win everything in Brexit. But time is a commodity which is running short in Brexit negotiations, too. If the EU and UK can’t agree on a negotiated end to the UK’s membership, a “hard exit” or “cliff edge” exit will occur — which would likely result in mutual tariffs and trade actions, plus the aforementioned hard border in Northern Ireland.

That would be a disaster for all sides but likely more so for the UK and May’s government, assuming it survives these negotiations. If May has to make too many concessions over Northern Ireland, the DUP could conceivably withdraw its support for May and force new elections, although it would be akin to cutting off one’s nose to spite one’s face. DUP has never had this much influence in Westminster and likely won’t ever have it again.

For now, though, consider the can kicked. May will still need to flesh out her five tests and five foundations into specific proposals that will satisfy Brexiteers, Remainers, the DUP, Ireland, and the EU, and she only has a few months to do so. At the moment, she has a little more credit on which to proceed, but it doesn’t look that it will last long either.