While The Clock Continues To Tick, Brexit Positions Continue To Evolve

Since the June 8 election in Britain, which saw the Prime Minister lose her majority in Parliament, there has been much speculation as to whether the British government would continue down the road of a "hard" Brexit or would move to a softer version of the "no deal is better than a bad deal" position that dominated the headlines for much of the spring. In the past few weeks, while continental Europe focused on other issues and vacations, the political class and the media in Britain were left to read between the lines as competing visions of Brexit, with a heavy dose of political maneuvering in the Conservative Party, emerged from the Cabinet.

On August 15, the British government issued the first of a promised series of policy papers, this one (in many respects, aspirational) proposed that Britain join a new form of customs union described as a "continued close association." This untried arrangement with the EU customs union, which would mirror the customs union of which Britain is a member by virtue of its status as a member state of the EU, would be limited in time. In response to the many commentators who expressed surprise (in some cases bordering on derision), or who questioned the value of the approach, the lead British Brexit negotiator David Davis noted, "You will find it difficult sometimes to read what we intend. That's deliberate. I am afraid in negotiations you do have constructive ambiguity from time to time."

In light of the election and the developments that followed, we highlight below the competing positions and the context in which these positions are evolving.

Yet Another Electoral Surprise

When Theresa May surprised the country on April 19 by calling for a snap election, she fully expected to augment her party's small majority in the House of Commons and gain a public mandate for her Brexit policy. That policy would call for Britain's departure from the single market, the customs union and the jurisdiction of the European Court of Justice. It would reduce immigration levels from 588,000 (as recorded in 2015) to the tens of thousands.

For the first few weeks of the seven-week campaign, the Prime Minister seemed set to deliver. Opinion polls in April gave Conservatives an approximately 20-point lead over Labour, which would have raised the party's majority from 12 seats to around 100. Over the seven-week campaign, the focus on the campaign trail moved away from Brexit and evolved into one about local issues. Education, the National Health Service and security concerns dominated headlines and manifestos, and government efforts to project an image of a "strong and stable" government able to deliver a "hard" Brexit fell victim to criticism, following the terror attacks in Manchester and London, of austerity-driven cuts in the country's various police forces. On the morning of June 9, however, the unexpected possibility of a hung parliament became a reality.

Neither Labour nor the Conservatives reached the 326-seat threshold needed for a majority in the lower house. Instead of gaining 100 additional seats, the Conservatives lost 13. It was an embarrassing performance for the Tories, who had structured their campaign around the Prime Minister and her vision of Brexit. Though they remain the largest party, it was the first time Conservatives had lost seats in the House of Commons in 20 years. The Conservatives were forced to enter into an alliance with the socially conservative Democratic Unionist Party (DUP) of Northern Ireland.

Theresa May's partnership with the DUP was the first inkling that a soft Brexit might be the only realistic scenario. The DUP's desire for a frictionless border with Ireland was viewed as putting pressure on the Prime Minister to adopt a softer touch, particularly with regard to her call to control immigration and leave the single market. The DUP is seen as a controversial choice as partner to the Conservatives, due in part to tensions in Northern Irish politics this year. Since March, the region has been without a power-sharing government, as neither the unionist nor nationalist parties can agree to form a coalition. The Good Friday Agreement, one of the major political developments in the Northern Ireland peace process, states that the region must be governed by a coalition of politicians from both sides. It also stipulates that the administrations in Dublin and London must be impartial to the region's local politics, a requirement that Theresa May will be hard-pressed to ensure. Former Conservative Prime Minister Sir John Major, who helped start the peace process in the 1990s, voiced concerns that a partnership could compromise Westminster's impartiality and put power-sharing talks at risk. The peace process, he says "isn't certain, it is under stress. It is fragile." Sinn Féin, the largest nationalist party in Northern Ireland, has...