With just two weeks before the Brussels summit, when the Brexit deal was originally intended to be finalised, there is still doubt about the possibility of reaching a final compromise on the model of future relations between the EU and UK and the land border on the island of Ireland. In addition, during the Conservative party conference, a re-stiffening of the UK’s position became apparent. This increases the probability of the negotiations ending with no agreement, or the no-deal scenario.
After the informal EU summit in Salzburg (19-20 September) and Labour (23-26 September) and Conservative (30 September-3 October) party conferences in the UK, there is a reorganisation of the British political scene with respect to Brexit. Labour is moving towards a soft Brexit position and highly conditional support for a second referendum should there be no snap general election soon. The Tories, in turn, built up their image of the party of a (relatively) hard Brexit, but are still arguing over the model. In addition, after the EU's express rejection of a Brexit plan in a policy paper sponsored by Prime Minister Theresa May (Chequers), the UK’s position on the Irish border issue became more rigid. The new party cleavage on Brexit corresponds with social cleavages on this issue, and hence supports the electoral strategies of both major parties.
May’s leadership has strengthened and is now relatively stable even with the divided internal opposition among the Tories. At the same time, the prime minister has very limited freedom of manoeuvre in domestic politics. May’s position also has been stabilised by the political burden of the EU negotiations (i.e., no one else wants responsibility for the failure of the talks or for unpopular compromises). The Conservative conference showed Boris Johnson’s strength as May’s main competitor and the attractiveness among the rank-and-file Tories of his vision of a “clean Brexit”. In addition, the conference demonstrated the key role of Euroscepticism in the competition for the Tories’ future leadership, which was best illustrated by Foreign Secretary Jeremy Hunt comparing the EU to the USSR. If the no-deal scenario materialises, Johnson’s chances for premiership will visibly increase.
The effect of the Salzburg summit and both conferences has been confirmation of the UK’s disagreement with the incorporation of Northern Ireland into EU customs territory as the “backstop” solution to the problem of the need for an “invisible border” on the island. The EU statement rejecting the Chequers proposals also led to the re-opening in the UK of the debate on the future relations. During the Tory conference, two voices were clearly heard in this matter. May is still demanding formal EU comment on her policy paper, but in her party, the support for a model similar to the EU-Canada free trade agreement (CETA) is evident. May’s freedom of action is also limited by the Fixed Parliaments Act of 2011, allowing Eurosceptics to block proposals accommodating to the EU without automatically bringing down her government.
The EU’s position expressed during the Salzburg summit assumes the rejection of the Chequers proposals as “impractical”, especially regarding a “facilitated customs agreement” (FAC). As a result, the EU looks forward to new UK proposals, in particular addressing the problem of the “invisible border” on the island of Ireland. Given the short time left for the negotiations, the EU would like to base the future relations with the UK on an off-the-shelf model, preferably the Norwegian one (common market) or the Canadian one (extensive free-trade agreement). However, the assumptions in the first one contradict the basic aims of Brexit while the latter depends on finding a solution to the question of the Irish border.
Currently, the most likely basis for an EU-UK compromise is the Canadian model, which implements the basic demands of both the EU and the UK at the lowest common denominator. However, its implementation would require a difficult change in the opening positions of the Republic of Ireland and the EU as a whole concerning the expected degree of “invisibility” of the land border on the island. From the Polish point of view, the CETA model is unsatisfactory due to regression in the rules of trade. The compromise would, however, make possible an orderly Brexit and would, in turn, deliver on what the UK had already agreed in December 2017 with respect to EU citizens, and a financial settlement stabilising the EU budget. In the event of a no-deal, the UK would automatically exit the EU, switch to trade based on WTO rules, and terminate the legal continuity of cooperation. That scenario would not only be chaotic but also the costliest for both sides.