Stratfor's Third-Quarter Forecast said that the Brexit process would become increasingly toxic as the governing Conservative Party remained divided on its negotiating position with the European Union. It further stated that the disunity in the government would raise the chances of Parliament taking control of Brexit. As events have unfolded, that analysis has proved accurate.
With just eight months left before the United Kingdom is set to leave the European Union, the British government is as divided as ever over what happens afterward. On July 6, Prime Minister Theresa May gathered her Cabinet to hammer out a strategy for negotiating with the bloc on trade. According to the plan, the United Kingdom and the European Union would maintain full regulatory alignment on goods and food, using technology to determine which products went where and what tariffs they were subject to.
The proposal, designed to appease those calling for a soft Brexit, came at the price of alienating the hard-liners among the Tories. David Davis, the United Kingdom's chief Brexit negotiator, argued that it made too many concessions to the European Union and resigned in protest July 8. The next day, Foreign Secretary Boris Johnson stepped down from his post as well. The resignations highlight the rift in the Conservative Party between those who want to minimize potential trade disruptions through alignment with EU standards and those who, like Davis and Johnson, want the United Kingdom to become as independent as possible.
In the coming weeks, May will face major challenges because of the resignations. First, she will have to try to keep her government together. Most Tory lawmakers don't want to risk losing their seats in an early election, but hard-liners could challenge May's leadership. Either way, the prime minister's government and her party will struggle to find a coherent negotiating position.
May also could have a harder time getting her way in the upcoming House of Commons votes, scheduled for July 16 and 17, on two bills on British trade policy after Brexit. The opposition Labour Party and some rebel Tories have threatened to introduce amendments to the legislation asking the government to negotiate the United Kingdom's continued membership in the EU customs union. Though the bills' failure would not necessarily keep the United Kingdom in the customs union, it would undermine May's authority and signal that Parliament, which has to ratify the final Brexit agreement, opposes leaving the customs union. But even if the prime minister manages to create a series of Brexit proposals that her entire party supports, there's no guarantee that the European Union will agree to them. The bloc could, for example, argue that May's plan to negotiate full regulatory alignment on goods but not services goes against the integrity of the EU single market.
Business lobbies, moreover, are already criticizing May's plan. Representatives of the United Kingdom's financial and technology sectors have warned that a deal covering goods but not services would hurt their bottom lines. And while the Irish government welcomed May's proposal, Dublin has insisted that its border with Northern Ireland remain open — though it's not yet clear how it will achieve that goal.
With so many questions still unanswered, and so little time left to answer them, EU officials have offered to continue talks during the summer to prepare for a Brexit summit in October. The British government, however, will need to solidify its negotiating position before the talks can make progress.