Clock is ticking on Brexit deal


Just what do Gibraltar, Germany and a rebellious politician named Jacob Rees-Mogg all have in common?

If you’re stumped, I don’t blame you. Turns out that these are all latest thorns in the side of embattled British Prime Minister Theresa May, who is desperately trying to sell her government’s Brexit deal not just to the European Union, but also to a wary British public which fears no agreement will be reached ahead of the March 29, 2019 deadline. If that wasn’t enough, May’s Brexit secretary just called it quits last week ahead of this weekend’s major conference in Brussels with European leaders aimed at coming to an agreement.

But before we dive into details about what exactly is going on in this messy divorce, let’s provide a bit of context on how we got here.

As many will recall, former British Prime Minister David Cameron called for a referendum on the UK leaving the European Union in early 2016. On one side were the ‘Brexiteers,’ who championed Britain’s withdrawal from the EU. To them, Westminster conceded too much power to Brussels, be it economic, immigration or trade. Those who wanted to stay in the EU, dubbed the ‘remainers,’ argued their country’s integration with Europe made both sides stronger, and any withdrawal would have dire consequences.

On June 23, 2016, millions voted in a referendum that saw the country split in two, with the ‘leave’ side squeezing out a victory that many deemed impossible.

With the United Kingdom voting to leave, Cameron was forced to resign in humiliation. What would happen next was anyone’s guess. To make matters worse, newly minted Prime Minister May, who was formerly Home Secretary and campaigned for the ‘remain’ side, was now in charge of ushering England out of the EU — something she never wanted in the first place.

Fast forward to today, and the stay-or-go question is still on the minds of many who fear their country made a grave mistake and that a so-called ‘hard Brexit’ (Britain’s complete withdrawal from the EU and its Single Market and Customs Union) will wreak havoc on the country’s economy. Talks of food and medicine shortages, a run on banks and other end-of-the-world scenarios are sparking calls for a second referendum. However, a second vote will not happen with the matter deemed decided the first time around, so it’s now up to May to secure a deal in just a few short months.

Unfortunately, that’s not all.

May is facing mutiny from within and cabinet defections that are weakening her government’s position. Enter Conservative MP Jacob Rees-Mogg. Rees-Mogg is an outspoken backbencher and staunch Brexit supporter who openly called for a leadership challenge against her, plunging the party into chaos at a time when they desperately need unity in lead up to make-or-break talks. While it seems his coup was unsuccessful, it was anything but helpful as Britain’s future hangs in the balance.

Downing Street is also facing political heat from beyond its borders that is making matters worse, and even more complicated for May’s government.

Spain just fired a shot across Britain’s bow over Gibraltar, a British-controlled territory at the entrance of the Mediterranean Sea that has been a strategic base for the Royal Navy and a point of contention between the two countries since 1713. Spain, once England’s arch enemy on the high seas, is threatening to veto any Brexit deal if text surrounding the overseas territory is not amended. While many observers say Spain’s position is being fueled by domestic politics, this latest spat is making it increasingly more difficult for the UK and EU to finalize a deal that so desperately needs to be signed.

And it’s not just the Spaniards causing greater uncertainty.

On Wednesday, Berlin threatened to pull the plug on the special Brexit summit set for Sunday if they do not receive text of an approved-deal at least 24 hours ahead of the the meeting. German Chancellor Angela Merkel is ramping up the pressure for both sides to agree to the draft deal, saying re-opening the text of the agreement is out of the question for her government.

Here in Canada, many political leaders have shied away from weighing in on Brexit for risk of irking London or Brussels. Strangely enough though, just last week, Tory Leader Andrew Scheer voiced his support for the ‘leave’ side that left many in Ottawa scratching their heads. Regardless of how the Brexit deal is done, one thing is clear: Canada and the United Kingdom will work quickly to solidify a new bilateral free-trade agreement. Only two years ago, Canada signed the Comprehensive Economic and Trade Agreement (CETA) following decade-plus long negotiations, which saw a sweeping free-trade agreement with the EU that is one of the largest of its kind in the world. While this agreement once included Britain, its exit from the union put an end to that. That said, with crisis comes opportunity, and a renewed focus on Canada-UK relations will be beneficial for businesses, and securing a new trade deal and possible new regulations for the freedom of movement is a priority for both governments. In fact, Canada could be the first nation to sign a new deal with post-Brexit Britain.

As a member of the Canada - United Kingdom Chamber of Commerce, Provident will be following the latest developments on Brexit and what happens after a deal is signed, particularly on matters relating to Canada’s interests. With long-standing relationships in a wide-range of industries in both countries, we are uniquely equipped to help clients navigate the public relations complexities of doing business on both sides of the pond.