Aarti Shankar Policy Analyst, Open Europe The Politics of Brexit Aarti Shankar Policy Analyst, Open Europe

Overview of Brexit Joint UK-EU objective to secure a comprehensive Free Trade Agreement – perhaps unexpected starting point to negotiations Success for the UK – striking a balance between minimal disruption to EU relations and ensuring the UK can shape its own trade and regulatory policy post-Brexit Structure of the negotiations is clearer – but political obstacles at many turns Domestic politics in Europe will shape the way to Brexit

What are the UK’s Brexit objectives? ‘Deep and special partnership’ – comprehensive Free Trade Agreement Out of the Single Market Out of the EU’s Common External Tariff and Common Commercial Policy PMs red-lines: lower immigration, abandon high budget payments, remove supremacy of ECJ Achieve parallel negotiations to increase leverage Implementation period for customs, immigration policy etc.

Why the UK should focus on customs cooperation Leaving the EUCU is central to fulfilling the PMs stated objectives Alternative options: Separate customs union Sectoral customs union Parallel tariffs Associate membership Half-in, half-out models fail to provide the freedom necessary to take Brexit opportunities and offset Brexit costs UK-EU must conclude customs cooperation agreements to minimise trade disruption outside EUCU

How will the negotiations play out? The EU must establish its negotiating directives among the institutions EU side will be led by the European Council The place of the European Parliament will be limited to consent Withdrawal negotiations to start next month, longer term negotiations expected to start this Autumn Ratification process expected to start October 2018

What are the key sticking points in the negotiation? Brussels’ opening gambit of a €60bn Brexit divorce bill The role of the ECJ in post-Brexit arbitration The UK’s ability to rapidly grandfather existing EU FTAs with third countries Transitional arrangements

The politics of Brexit Is no deal better than a bad deal? Does the EU have a right to demand an exit payment? Can the open Irish border be maintained? Does the EU have an incentive to punish the UK? Is Brexit a simple trade-off between markets and immigration?

The politics of Europe UK general election result could have an effect on Britain’s negotiating power PM will have more freedom of manoeuvre to establish a transitional arrangement Not clear that this means a “softer Brexit” Upcoming EU elections could change the structure of these negotiations New Franco-German engine behind the EU – could this help the EU breathe a sigh of relief?