Regrexit Update

Now that Theresa May has become the new Prime Minister, we can at least see some baby steps  toward Britain's exit from the EU. And, as is usual when Britain has a foreign policy crisis, it is turning to its former colonies for help. The beleaguered Malcolm Turnbull in Australia discussed a free trade deal between the two countries when he spoke to May last week, and she welcomed the idea. And Trade Secretary Liam Fox began what he called "fruitful" negotiations over a similar trade agreement with Canada. These two announcements at least give the appearance of an effort to find new trading partners after exiting the EU, although they will come nowhere near replacing the reduction in trade that would come if Britain lost access to the European market.

Meanwhile, in a statement that is sure to annoy the Europeans, Brexit negotiator David Davis declared that any rush of immigrants entering Britain just before the official exit from the EU may not be entitled to protection and subsequently deported.  "We may have to say that the right to indefinite leave to remain protection only applies before a certain date," he said. Statements like this, however, are likely to spur even more immigrants to come to Britain right now in order to make sure they are not deported later. And how Davis' proposed change would be implemented legally is also hard to see, especially before Article 50 has been invoked.

Finally, on that very issue, Theresa May visited Scotland and met with Nicola Sturgeon and indicated that she will delay invoking Article 50 until some kind of agreement could be worked out with Scotland about staying in the EU. Sturgeon said she remained "open and flexible" to any options, one of which apparently might include Scotland remaining in the UK and remaining in the EU at the same time. It is very hard to see how that might be achieved but, in any case, it surely delays any invocation of Article 50 in the near future and that is certain to annoy the Europeans even  more. And it probably won't help the uncertainty that British businesses currently feel as well. This also seemingly contradicts Davis' statement that Article 50 should be invoked before the end of this year, although, it must be said, that comment was made before he was appointed to the cabinet.

Sadly, there still seems to be no real plan for going forward. May and Davis continue to make statements that indicate they think they can thread the needle in negotiating with Scotland and Northern Ireland that would somehow allow those two countries to remain in the EU while also being part of the UK. And they continue to peddle what I think is the fantasy that Britain can still have access to the European markets while limiting its immigration. As I have said many times before, I think these decisions will have to be made sooner rather than later. I just don't see the Europeans and the UK business community putting up with another 9-12 months of uncertainty.