The second phase of the Brexit talks is getting underway and significant challenges lie ahead. At the centre of these are the divisions within the British Conservative Party which add a layer of uncertainty to negotiations that were always going to be complex and difficult. The position of the European Union is relatively clear but the United Kingdom has still to decide precisely what kind of Brexit it is trying to negotiate.
The first phase of the talks was mainly concerned with issues relating to the UK's departure, such as its contributions to the EU's budget and mutual citizens' rights. Of course Irish issues also featured in the first phase talks leading to an agreement in December which the Government hailed as a breakthrough in ensuring that there would be no return to a hard Border between the Republic and Northern Ireland.
The talks will proceed on a number of fronts. Negotiators will seek to tie down December’s agreement in a formal legal text. Ireland won an important diplomatic victory but turning this into a legal agreement will be difficult. The Border issue is far from solved.
The talks will also try to finalise a transition agreement, covering arrangements which will apply for just under two years after the UK leaves the EU. Agreement here should be possible, given goodwill on both sides, but it is politically difficult for British prime minister Theresa May as it will involve continuing to abide by EU rules into which London no longer has an input.
Finally, the talks are due to scope out what the future relationship between the UK and EU would look like.Here, UK statements have shown a lack of reality in terms of what is achievable. The EU insists that the UK cannot retain access to the EU trading bloc on current terms after it leaves unless it continues to abide by the rules. For many in the Tory Party this is anathema, as it runs counter to their reasons for leaving in the first place.
The Brexit rhetoric is crashing into reality, as was always likely to happen. This was solved in phase one by London giving way on a number of key issues. But May is now paying the political price for this and an increasingly trenchant lobby is insisting that “ Brexit must mean Brexit”. The problem is this is the route to huge economic damage; leaked assessments undertaken for the UK government show the economic price of a hard Brexit.
Against this backdrop, the Irish Government faces a tough task. It must try to tie down the agreements reached in December while at the same time doing what it can to ensure the talks stay on track and that, in the short term, a transition agreement is reached. We need to bear in mind also that, although it would amount to costly economic madness, it remains possible that the talks will collapse.