Call the EU countries without the UK the E27. Judging by the announcements from yesterday, the E27 are hoping for an orderly Brexit process which leaves all treaties intact (not just Rome, Maasstricht, Lisbon and so on, but also the EEA and EFTA agreements). The UK wants (arguably needs, but I won’t get into that) something which is going to violate one or the other of those, namely some arrangement which allows the UK to restrict freedom of movement while retaining some access to the open market.
Let’s take those positions at face value. This won’t be the first time they have been discussed – the European Council discussed them earlier this year.
The positions are incompatible. If there is to be an agreement, either the E27 or the UK will have to give a little. If the UK were to invoke Article 50, then there is an end to negotiations two years later even if agreement has not been reached, and in that case a specific arrangement is triggered which is incompatible with what the UK is likely to want on trade. So the UK would lose. It follows that there is no motivation for the UK to invoke Article 50.
If Article 50 is not invoked, then an unholy organisational mess will ensue and EU Council meetings will be much more difficult. People will be saying (they already are saying) “enough of this“.
The only resolution of that situation would be for the E27 to give a little. That would mean allowing access to the market while allowing some restrictions on immigration. And if that’s on the table, why would the UK want to Brexit? (So Article 50 wouldn’t be invoked anyway.)
This would of course set a rotten precedent – there are others in the E27 who might want some restrictions on immigration at some point in the future (even France or Germany if Front National and AfD develop national influence – this is why it’s so hard). But the entire process would also set a rotten precedent for strategies for withdrawal via Article 50.
There is said to be “no appetite” for further revision of the fundamental EU treaties. But it looks like some revision will have to be, either to fix the weakness of Article 50 or to modify the conditions of free movement or both. The point of negotiations such as these is for each side to get as much of what it wants as it can, full stop, not to get as much as it can while not inconveniencing the other.
When I first thought about this, I also thought there will be plenty of other people thinking of it too. Indeed, Simon Fraser and Christopher Meyer seem to have reached the neighbourhood yesterday http://www.theguardian.com/politics/2016/jun/28/uk-lacks-expertise-for-trade-talks-with-europe-says-top-civil-servant