UK makes new proposal to the EU, but at what cost?
July 9, 2018

In our last post, we mentioned that the UK Prime Minister was planning to host a meeting of her Cabinet at the Prime Minister’s country retreat, Chequers.  That meeting occurred last Friday and was a marathon session that culminated in a new proposal from the UK to the EU 27 (the full statement is here).

Some of the key aspects had been leaked to the media during the week and this was clearly another big concession by the UK to effectively agree a proposal for a common market on goods with a common rule book.  A white paper with more detail on the new proposals will be published on Thursday of this week.

Over the weekend there have been various rumours about dissatisfaction with the UK’s main governing party, the Conservatives, including speculation that the Cabinet was not fully on-board with this new option or that the Prime Minister was facing a call for a Vote of No Confidence, which requires a minimum of 48 Conservative Members of Parliament to support it.

Initially, we were dismissive of whether these rumours would have any real effect on the Brexit process.  However, overnight the UK Secretary of State for Exiting the EU, David Davis, as well as Steve Baker, another key minister in the Department, both resigned.  Clearly there was not a collective agreement on Friday and we will watch closely if there are other resignations to come.  It is too early to tell what impact this will have on the Prime Minister’s government, but if there are no further resignations Theresa May will likely get through this.

Despite all of this, we have not yet had any meaningful response from the EU27 on the UK’s proposals.  It is yet to be seen if they would be accepted in current form or if other demands would be made by the EU27.  A note of caution from the recent past, the 2016 EU referendum was partly determined by the fact that then Prime Minister David Cameron came back to the UK with a relatively weak renegotiated settlement on the UK’s status within the EU.  That sounds very familiar here as well and may have similar consequences.

Even if the EU27 accept the UK’s current offer, it is now entirely possible that the UK Parliament may decide that it is not good enough and reject it.  There are already arguments being made that the new proposals are in conflict with the European Union (Withdrawal) Act 2018 that became law last week.

Recent months in the Brexit process feel like déjà vu all over again.

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