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The UK government's statement issued late on Friday after a lengthy cabinet meetings at Chequers is welcome insofar as it is the first agreed statement emerging from London on its desired future trading arrangement with the EU. That it has taken so long to emerge is a sign of the extraordinary divisions in the Conservative Party. It also reflects the fact that Brexit, in economic terms, is a game of damage limitation.
The hard Brexit lobby have produced no workable plan and so Theresa May has won support for her softer version, albeit that it remains unclear how the political pieces will move in London in the weeks ahead.The situation remains unpredictable.
Much will first depend on whether the first hurdle can be jumped – agreement on the text of a withdrawal agreement, including the details of the so-called backstop
The EU must now decide how to react. It will first await a White Paper due from London shortly, which will spell out its trade plans in more detail. The EU side will reject much of the detail. The question is whether they believe there is now a basis for negotiation, with the possibility of further movement from London as time goes on.
Much will first depend on whether the first hurdle can be jumped – agreement on the text of a withdrawal agreement, including the details of the so-called backstop, to guarantee that there would be no hard Border on the island of Ireland after Brexit.
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The document from Chequers commits to sign up to this, on the basis that it does not believe that it will eventually be needed. But what exactly is the UK prepared to sign up to in the withdrawal agreement?
If some formula can be agreed here, then it may open the way to the signing of the withdrawal agreement. In turn this would remove the immediate risk of the UK crashing out of the EU with no deal and mean that a transition period would start next March after it leaves the union and continue under December 2020. This would effectively be a stand-still period during which existing trading arrangements continue to apply.
If a way can be found to agree a legal text on the Border backstop, then it is very much in Ireland's interests that the Brexit talks continue
The Chequers statement, however, also shows the long road to travel to any wider agreement. The UK paper, for example, suggests that it can continue to have access to parts of the single market, without signing up to full membership. While it would make an exception for the North, the EU is unlikely to agree that the entire UK can remain half-in and half-out. Brussels will also have serious problems with the UK’s view of future customs arrangements.
If a way can be found to agree a legal text on the Border backstop, then it is very much in Ireland’s interests that the Brexit talks continue. Whether, given the divisions in UK politics, an agreement is ultimately possible remains questionable. As the process goes on, and the extent of the damage it could create becomes clear, the folly of Brexit just becomes more and more evident.