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Brexit: what is happening and what happens next?


Baffled by Brexit? You are not alone. From San Francisco to Kiev to Beijing, people are asking how Britain, once renowned for its pragmatism and common sense, has got itself into such a mess over its plans to leave the EU — and, more importantly, how the country can extract itself from its difficulties. Here is what you need to know.

What is Brexit?

In June 2016, the British voted by 52 per cent to leave the EU, a club the UK joined in 1973. A succession of British governments had been ambivalent at best about membership, enthusiastically endorsing closer integration of markets but spurning the single currency and other common policies such as a free travel area. David Cameron, Conservative prime minister after 2010, gave in to growing Euroscepticism in his party and called a referendum on membership. 

Brexit is the process of leaving the EU, unpicking more than 40 years of membership that has shaped Britain’s economy and society in many ways. No member has ever previously withdrawn from the bloc.

Why hasn’t Britain left yet?

Theresa May, Mr Cameron’s successor, finally struck a divorce deal with the EU in November last year but has been unable to get it through parliament.

Any prime minister was going to face a formidable challenge in negotiating Britain’s exit, but Mrs May’s critics say she has handled it badly. In the aftermath of the 2016 referendum, she set out her red lines — her non-negotiable demands — without widespread consultation. 

In March 2017, she triggered Article 50 of the EU treaty, which set a two-year deadline for the UK and the bloc to agree the terms of the split, long before her government had a settled view of what it ultimately wanted from Brexit. She then called a botched snap election in June 2017, which took up time and deprived her of a parliamentary majority.

Why does Brexit matter to the world?

Britain is the sixth-largest economy in the world and has long been accustomed to being an influential medium-sized power. But the country is now deeply polarised and its political class is consumed by infighting over what leaving the EU actually entails. 

Britain’s withdrawal will weaken the EU politically, strategically and financially, although some Europeans now believe the bloc would be better off without the UK.

It could lead to severe dislocation of trading links between the UK and EU markets, which account for 44 per cent of British goods and services exports and 53 per cent of its imports. Brexit supporters say that once Britain is outside the EU it can forge closer trade and political ties with the US and other faster-growing economies. 

Why is the UK in this situation?

Britain cannot decide what kind of future relationship it wants to have with the EU. It has yet to resolve an essential trade-off between regaining control of policymaking and retaining access to EU markets. 

Brexit has created a conflict between the direct democracy of the advisory 2016 referendum, in which voters chose by a narrow majority to leave the EU, and the representative democracy of parliament. 

The House of Commons is largely pro-EU — many MPs want to maintain closer ties with the bloc than Mrs May is proposing. But this pro-EU camp is itself divided: in votes this week and last on rival plans to Mrs May’s no proposal won a majority.

Overall, the ruling Conservatives are much more pro-Brexit than the main opposition Labour party, many of whose members favour remaining in the EU. But there are deep divisions within both parties.

At present, Mrs May is seeking to reach a grand Brexit bargain with Jeremy Corbyn, the Labour leader, to agree a compromise on future EU-UK ties and vote through the divorce deal she has negotiated with the bloc. But, given the polarised debate, many sceptics think this gambit is unlikely to succeed.

What is the trouble with Mrs May’s deal?

The deal is in two parts. First, and most substantively, is a withdrawal agreement that sets out how much the UK owes the bloc, and the rights of UK citizens living in the EU and EU citizens living in the UK. It includes “backstop” guarantees intended to avoid a hard border between Northern Ireland and the Republic of Ireland, which could threaten the peace process on the island. 

The withdrawal agreement also establishes a transition period that would retain much of the status quo, keeping many of Britain’s rights and obligations as an EU member, although the country would lose its vote in the bloc. This would last until the end of 2020, although it could be extended a further two years.

The second part of the deal is a non-binding political declaration, sketching out Britain’s future relationship with the EU in vague terms. 

The withdrawal agreement was rejected by the House of Commons by a huge majority in January, and in two further votes in March — largely because of opposition from Eurosceptics, who object to the backstop, and Europhiles, who worry about the consequences of a sharp break with the EU.

Reluctantly, EU leaders decided to give the UK more time and extended Britain’s scheduled departure date from March 29 to April 12. 

The EU has called a summit on April 10 — just two days before the new deadline — to decide on whether to grant a further delay, or to instead go ahead with a no-deal Brexit.

How could the impasse come to an end?

Mrs May hopes that MPs will ultimately approve her deal, with some deciding compromise is better than the risk of no-deal Brexit or crashing out. She is seeking Labour support to get the exit agreement through in return for compromises on the political declaration that could soften Brexit in the long term.

If those talks break down, she is hoping MPs will still opt for her deal in a run-off with other Brexit options in the coming days. But, since time is short, Mrs May is now in any case expected to ask next week’s EU summit for a long delay — one that could last until the end of the year.

She wants the bloc to allow Britain to terminate this extension if and when parliament finally backs her deal. But there is no guarantee the EU will grant such a novel request, not least because of complications caused by European parliamentary elections scheduled for late May. 

An alternative would be to leave without a deal. Mrs May appears to have made her mind up against such an option, because of its impact on the economy and on relations between the constituent parts of the UK, notably Northern Ireland. But a no-deal Brexit is now favoured by a majority of the MPs in Britain’s governing Conservative party. The European Commission also says it looks increasingly likely.

Finally, Britain could revoke the Article 50 exit process altogether. Mrs May has vowed she would not do this, although she also promised many times that Britain would leave on March 29 — which did not ultimately happen.

What happens after Brexit?

It all depends on what kind of Brexit Britain opts for.

If there is no deal with the EU, there is likely to be disruption at ports in both the UK and the EU as hauliers and officials contend with unfamiliar customs documentation, standards checks and tariffs.

Any severe disruption is likely to be temporary but more onerous border controls would take their toll on the economy and sharply decrease EU-UK trade. The bad blood would bode ill for future trade negotiations, which both sides consider to be essential.

If Mrs May’s deal or a variant of it is passed, trading conditions would remain unchanged during the transition period, which would last at least 21 months. But companies would make investment decisions based in part on their expectations about the UK’s prospects after Brexit.

Moreover, Mrs May has agreed to stand down in the event that her deal is passed, so as to allow another Conservative prime minister to shape future relations with Europe. Her successor could be a more hardline Brexiter. 

So Brexit is far from over: Britain’s negotiations with the EU are likely to go on for years and years. 



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