“Brexit means Brexit” we have been told repeatedly since Theresa May became PM, but, as they say, the Devil is in the details. Her decision to throw away the only strong negotiating card in her hand, when she intends to trigger Article 50 (by the end of March 2017); and her bellicose statements on ending the freedom of movement of EU citizens within the UK, withdrawing from the European Court of Justice and “restoring” control of UK borders, made at the recent Conservative conference have widely been blamed for the run on Sterling. However, we are no clearer, in concrete terms, to knowing what her vision of the future UK-EU relationship will be as she refuses to outline it to parliament or “the British people” who she believes mandated her to determine it. Vacuous statements by her Foreign Secretary, Boris Johnson, about “jumbo deals” and an even better trading relationship with the EU than the nation currently enjoys provide nothing more tangible than wishful thinking.
Those in government (and out) clamouring for a total rupture of the UK-EU axis (including the customs union) want to fall back on World Trade Organisation rules as a basis for doing business with the EU and the rest of the world. The UK is a founding member of the WTO, but it has no schedule with the WTO since it is party to agreements negotiated by the EU collectively. It is not as simple as the hard Brexiteers imagine.
Technically, the UK cannot enter into any negotiations with third parties until it has left the EU (April 2019). The UK then needs to submit its schedule of tariffs which must gain the approval of the 162 other WTO members (including the EU bloc) and WTO members have the right to object to it, triggering, potentially, a series of talks which may take years to resolve.
Robert Koopman, chief economist at the WTO noted: “My sense is they are there to negotiate and are likely to find some things to negotiate. It could take a long time. Every WTO member is going to be able to look and say it does affect me. Members are looking out for their interests.”