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RED BOX | COMMENT

May’s North Korean strategy will blow up if Brussels calls her bluff

The Times

Walking away from a deal, loudly proclaiming that you didn’t like the pattern anyway, is what you do in the souk when really you want the rug. In Brussels, no one believes the mantra that “no deal is better than a bad deal”.

They judge that in the end Britain will not impose a disastrous Brexit on their people. It is an article of faith that the Brits will come back, tail between their legs, and take the deal that is offered on EU terms.

The EU27 may be wrong. Perhaps the prime minister is playing the North Korean gambit. She really does mean it and will accept the chaos of no deal. Indeed, I suspect that she expects it to happen and that is why she has gone for a big majority in the Commons.

North Korea gets away with outrageous behaviour because we believe that they really might launch a nuclear strike, start a suicidal war or starve their people.

After all, they have starved their people often enough. Their strategy recognises that they have a very weak hand compared to China or the United States. Only a willingness to pull the temple down on everyone gets them taken seriously.

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So the British government, with a weak hand in the Brexit talks, evens things out by signalling to the EU27, “Look, we have the stomach to live with the chaos and pain of ‘no deal’. We don’t think you do. So you will have to give us a better deal than you can imagine just now”.

This is a more likely interpretation of the prime minister’s stance than that she is deluded, or living in a parallel universe. It is true that No 10 is not at its best in managing a normal EU negotiation. The FAZ account of the fateful dinner rings horribly true.

But if you want to be able to blame the EU for the consequences of Brexit, which will hurt UK voters with or without a deal, you don’t want a normal EU negotiation. The North Korean strategy begins to makes sense.

Emile Noel, the legendary secretary-general of the commission for its first 35 years, said Mrs Thatcher’s campaign to get her money back was “a legitimate demand, unreasonably pursued”. But that was just the point. Only by being a bloody difficult woman, going way beyond the rules of the Brussels game, did she get her deal.

The difference was that she had a strong hand. She had a veto over any increase in the EC budget. So if her negotiating partners wanted more money they had to give some of it to her. Theresa May, who aspires to be as bloody and as difficult, has no such good fortune.

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She has a timeline and a process designed to make her hostage to the other side. THE EU27 sees this and is making ever more unreasonable demands that the UK fills the hole in their budget. The only way to even things out is to dare the EU to make us choose the no deal option, believing that we actually would do so.

This is the best interpretation of the British government’s negotiating stance, which the other side sees as absurd. What is surprising is that the government is not doing more to prepare for a no-deal scenario.

Why are they not hiring and training customs and immigration officers, building lorry lanes at Dover and Felixstowe or preparing emergency powers legislation to create the regulators needed to keep planes flying and food on the shelves?

They should be doing this to make the no-deal option seem plausible. But they should also be doing this as a responsible government. As the Institute for Government has set out in recent papers on immigration and trade policy, good government means preparing now for taking back control. It is odd that the government has not been doing this.

The answer may well be the same as why David Cameron instructed Whitehall not to prepare for a Leave vote; a lack of political seriousness about the administrative complexities of Brexit. Whitehall has done a fair amount of the analytical and background work. No 10 appears not wish to hear about it.

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The European Commission president Jean-Claude Juncker is supposed to have said after his infamous at Downing Street that the chances of a breakdown were about 50 per cent. They are much higher than that. At the very least there has to be a walkout from the rug emporium at some point to be seen to get the best possible deal.

But I fear that we will have a much longer breakdown, measured in years not months when no deal is reached on Brexit day and no transitional arrangements are possible because of a breakdown of trust on both sides. No doubt a deal will be found when the futility of economic barriers becomes clear. Britain has always reached a deal with Brussels, but usually only at the second or third attempt.

So we have two negotiators hardening their stances. That is normal. What is not normal is the misunderstanding by each side of the other’s position. The EU27 is convinced that the UK is so weak that it can be bullied into submission. And the UK fails to see that for the EU27 this is an existential negotiation which they believe Britain must lose.

The danger with playing the North Korean gambit is that sometimes your bluff is called and you have to blow yourself up. In Britain I look to two forces which may stop that happening.

The markets may get spooked by the no-deal strategy. If this happens in 2018 then we may find we have another Suez moment, when Britain’s dreams of global glory are punctured by lack of money and lack of political clout.

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And less surely, perhaps business will finally find the courage to speak up for its interest in an agreed settlement which allows them to continue to trade with their largest market.

Sir Andrew Cahn is a former head of former head of UK Trade & Investment, and a former senior official in Brussels