Tricks of the trade: Britain, the EU and doing deals in a post-Brexit world

The beauty of Brexit, according to those in favor, is that the UK will be able to strike its own trade deals without EU "interference." But 65 percent of UK trade is linked to EU trade, and new deals are deeply complex.

Incredibly, despite the fact that the original Brexit D-Day of March 29 is now upon us, no one can credibly claim they know what is going to happen in the end. Granted, D-Day has been postponed for two weeks but there is justified doubt as to whether we'll be much wiser in a fortnight.

What those in favor of the UK's leaving the EU have consistently argued is that a post-Brexit landscape would resemble a kind of trade nirvana, a world in which British civil servants bound merrily across the globe signing trade deals like autographs — Canada one week, India the next.

"The only thing we have to fear is fear itself," Boris Johnson, a driver of the Leave campaign, said a few months before the referendum. "I think there is a huge opportunity. Do free trade deals, believe in ourselves."

Other passionate Brexiteers like Jacob Rees-Mogg, Liam Fox and David Davis have been every bit as ardent. "Global Britain" was the watchword. This was all going to be rather straightforward.

Trade deals are fiendishly complicated things to deliver, yet in late 2017, UK Trade Secretary Fox delivered the unforgettable quote: "I hear people saying 'oh we won't have any [free trade agreements] before we leave'. Well, believe me we'll have up to 40 ready for one second after midnight in March 2019!"

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He was wrong. As things stand, the UK has signed just eight "continuity deals" with countries and regions with which the EU has trade associations and agreements, and which the UK already has the full benefit of through their EU membership.

You won't get me, I'm not part of the union

The eight are: the Palestinian Authority, Israel, Switzerland, the Faroe Islands, Chile, Eastern and Southern Africa (four countries), Caribbean countries (nine countries) and a group of Pacific Islands.

Those were relatively straightforward to strike but others are proving much trickier. UK Agreements with Norway, Iceland, Canada and South Korea are seen as a long way off while bespoke UK trade deals with Japan, Turkey and Singapore have already been ruled out.

It's important also to point out that the above only applies to continuity deals with countries the EU already has trade agreements and associations with. For countries that the EU has no specific agreements with (for example, India, the USA or Australia), entirely new trade deal negotiations would need to be initiated. That's a whole new ball game.

Also significant is the fact that the agreements the UK has already struck will not apply until at least 2021 if the EU-UK Withdrawal Agreement is eventually ratified by the British parliament.

"The UK will remain bound during the transition period by the obligations stemming from all EU international agreements," a European Commission spokesman told DW. "In the area of trade, this means that third countries keep the same UK market access. During this period, the UK cannot become bound by new agreements on its own in areas of union-exclusive competence unless authorized to do so by the EU."

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The art of the deal

Tim Cullen, the founder of the Oxford University program on negotiation and an experienced negotiator at commercial and international level, says trade agreement negotiations are "just about as difficult as it gets."

Based on what he has seen from the UK side in their approach to negotiations with the EU so far, he believes they need to learn many valuable lessons if they are to succeed in future trade agreement negotiations with both the EU and other countries.

"For future negotiations, they need to be extremely realistic" he told DW. "Much more realistic than they have been so far, as to what it will entail going into these other big negotiations."

"The Canadian-EU agreement (CETA) took seven years for the documentation to be finalized alone," he said. "The agreement itself has the same amount of pages as the complete works of Shakespeare and the Old and New Testament of the Bible put together."

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He believes that many "first principles of negotiation" have been lacking in the UK's approach so far, for example a lack of unity and a lack of clarity as regards their ultimate goals. He also says a fundamental tenet of negotiating — making concessions in order to make gains — is undermined when any concession mid-negotiation is leaked to the media and then represented as a capitulation, as happened throughout the EU-UK process.

Another thing he thinks is worrying for future UK negotiating prospects is the possibility of ideology, rather than pragmatism, governing the approach of pro-Brexit politicians.

"People who put forward proposals based on pragmatism and solid research underpinnings are much more successful in negotiations than those who are driven by ideology," he said.

Starting from scratch

The EU has trade agreements with 72 countries around the world. As long as its in the EU, the UK benefits as much from these as any other EU member. Those agreements cover around 15 percent of UK trade. 

On top of this, there is still no guarantee that a close future EU-UK relationship will make it any easier for a post-Brexit UK to strike a trade deal with a country like Japan.

Fredrik Erixon, director of the European Centre for International Political Economy (ECIPE), a Brussels-based think tank, says that while some countries will be happy to replicate with the UK the exact deal they have with the EU, others will seek to make gains from the UK's post-Brexit lack of leverage.

"Some countries will believe that the UK should open its markets much more than it was compelled to do under the agreement that it had with the EU," he told DW. "These countries believe they have leverage now and that's why they want to actually negotiate. This is not going to be a simple rollover, it's going to be a new negotiation. Countries like Japan have been very clear about this."

Ask the question before looking for the answer

Close to 50 percent of current UK trade is with other EU nations. So, alongside the aforementioned 15 percent with nations in EU agreements, around 65 percent of UK trade is directly tied to the nature of its future relationship with the EU.

So even allowing for the untested Brexiteer vision of the UK quickly penning trade agreements with countries such as the USA, India, Australia and so on, there is no denying that the most important trade agreement negotiation it will enter whenever Brexit finally does happen is the one with the EU itself.

Erixon believes that the trade agreement talks between the EU and the UK will "for sure" take longer than the period covered by the transition period in the Withdrawal Agreement. "At least four years," he says.

He also believes the current lack of clarity over the terms of the UK's exit means much will need to be defined regarding what kind of relationship the UK wants with the EU before the negotiations can even begin.

With one day to go until March 29 — the day by which all this was supposed to have been resolved — it's clear that the question of the future of British trade has not yet even been fully formulated, let alone answered.

Brexit timeline: Charting Britain's turbulent exodus from Europe

June 2016: 'The will of the British people'

After a shrill referendum campaign, nearly 52 percent of British voters opted to leave the EU on June 24. Polls had shown a close race before the vote with a slight lead for those favoring remaining in the EU. Conservative British Prime Minister David Cameron, who had campaigned for Britain to stay, acknowledged the "will of the British people" and resigned the following morning.

Brexit timeline: Charting Britain's turbulent exodus from Europe

July 2016: 'Brexit means Brexit'

Former Home Secretary Theresa May replaced David Cameron as prime minister on July 11 and promised the country that "Brexit means Brexit." May had quietly supported the Remain campaign before the referendum. She did not initially say when her government would trigger Article 50 of the EU treaty to start the two-year talks leading to Britain's formal exit.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2017: 'We already miss you'

May eventually signed a diplomatic letter over six months later on March 29, 2017 to trigger Article 50. Hours later, Britain's ambassador to the EU, Tim Barrow, handed the note to European Council President Donald Tusk. Britain's exit was officially set for March 29, 2019. Tusk ended his brief statement on the decision with: "We already miss you. Thank you and goodbye."

Brexit timeline: Charting Britain's turbulent exodus from Europe

June 2017: And they're off!

British Brexit Secretary David Davis and the EU's chief negotiator, Michel Barnier, kicked off talks in Brussels on June 19. The first round ended with Britain reluctantly agreeing to follow the EU's timeline for the rest of the negotiations. The timeline split talks into two phases. The first would settle the terms of Britain's exit, and the second the terms of the EU-UK relationship post-Brexit.

Brexit timeline: Charting Britain's turbulent exodus from Europe

July-October 2017: Money, rights and Ireland

The second round of talks in mid-July began with an unflattering photo of a seemingly unprepared British team. It and subsequent rounds ended with little progress on three phase one issues: How much Britain still needed to pay into the EU budget after it leaves, the post-Brexit rights of EU and British citizens and whether Britain could keep an open border between Ireland and Northern Ireland.

Brexit timeline: Charting Britain's turbulent exodus from Europe

December 2017: Go-ahead for phase 2

Leaders of the remaining 27 EU members formally agreed that "sufficient progress" had been made to move on to phase two issues: the post-Brexit transition period and the future UK-EU trading relationship. While Prime Minister Theresa May expressed her delight at the decision, European Council President Tusk ominously warned that the second stage of talks would be "dramatically difficult."

Brexit timeline: Charting Britain's turbulent exodus from Europe

July 2018: Johnson, Davis resign

British ministers appeared to back a Brexit plan at May's Chequers residence on July 6. The proposal would have kept Britain in a "combined customs territory" with the EU and signed up to a "common rulebook" on all goods. That went too far for British Foreign Minister Boris Johnson and Brexit Secretary David Davis, who resigned a few days later. May replaced them with Jeremy Hunt and Dominic Raab.

Brexit timeline: Charting Britain's turbulent exodus from Europe

September 2018: No cherries for Britain

May's Chequers proposal did not go down well with EU leaders, who told her at a summit in Salzburg in late September that it was unacceptable. EU Council President Tusk trolled May on Instagram, captioning a picture of himself and May looking at cakes with the line: "A piece of cake perhaps? Sorry, no cherries." The gag echoed previous EU accusations of British cherry-picking.

Brexit timeline: Charting Britain's turbulent exodus from Europe

November 2018: Breakthrough in Brussels

EU leaders endorsed a 585-page draft divorce deal and political declaration on post-Brexit ties in late November. The draft had been widely condemned by pro- and anti-Brexit lawmakers in the British Parliament only weeks earlier. Brexit Secretary Dominic Raab resigned along with several other ministers, and dozens of Conservative Party members tried to trigger a no-confidence vote in May.

Brexit timeline: Charting Britain's turbulent exodus from Europe

December 2018: May survives rebellion

In the face of unrelenting opposition, May postponed a parliamentary vote on the deal on December 10. The next day, she met with German Chancellor Angela Merkel to seek reassurances that would, she hoped, be enough to convince skeptical lawmakers to back the deal. But while she was away, hard-line Conservative lawmakers triggered a no-confidence vote. May won the vote a day later.

Brexit timeline: Charting Britain's turbulent exodus from Europe

January 2019: Agreement voted down

The UK Parliament voted 432 to 202 against May's Brexit deal on January 16. In response to the result, European Council President Donald Tusk suggested the only solution was for the UK to stay in the EU. Meanwhile, Britain's Labour Party called for a no-confidence vote in the prime minister, her second leadership challenge in as many months.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2019: Second defeat for May's deal

May tried to get legal changes to the deal's so-called Irish backstop in the weeks that followed. She eventually got assurances that the UK could suspend the backstop under certain circumstances. But on March 12, Parliament voted against the revised Brexit deal by 391 to 242. EU leaders warned the vote increased the likelihood of a no-deal Brexit. Two days later, MPs voted to delay Brexit.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2019: Extension after second defeat

Following the second defeat of May's divorce deal, the European Council met in Brussels on March 21 to decide what to do next. EU leaders gave May two options: delay Brexit until May 22 if MPs vote for the withdrawal deal or delay it until April 12 if they vote against the deal. If the deal were to fail again in Parliament, May could ask for a long extension.

Brexit timeline: Charting Britain's turbulent exodus from Europe

March 2019: Brexit deal rejected a third time

On March 29, the day that the UK was supposed to leave the EU, British lawmakers voted for a third time against May's deal — rejecting it this time with a vote of 344 to 286. Following the latest defeat, May approached the main opposition Labour leader Jeremy Corbyn in an attempt to find a compromise, angering hardline Brexiteers in her own Conservative party.

Brexit timeline: Charting Britain's turbulent exodus from Europe

April 2019: Brexit delayed until Halloween

With the April 12 deadline looming after the third defeat of May's deal, EU leaders met again in Brussels to discuss a second delay. The only question was how long should it be? In the end, the UK and EU agreed to a "flexible" extension until October 31 — which can end sooner if the Brexit deal is approved. If the deal isn't ratified by May 22, the UK would have to take part in European elections.