European Union: Brexit: "The Natives Are Restless And Seem Desirous Of Fighting"

Last Updated: 13 November 2017
Article by Howard W. Fogt

This is the sixth in an ongoing series of blog posts by Foley & Lardner LLP on the implications of the June 23, 2016 voter referendum in the United Kingdom ("UK") to exit the European Union ("EU") ("Brexit").1 This current article recounts recent developments, the current status of Brexit and the very difficult days, months, and years that appear to lie ahead as the implications of the UK's decision play out.

On March 29, 2017, the UK gave formal Article 50 notice that it was exiting the EU. This notice triggered a two-year period within which the terms of Brexit are to be negotiated between the UK and the EU27. Since then, these negotiations have produced little apparent progress. On the UK side, there has been increasing infighting between proponents of "hard" and "soft" approaches to Brexit. On the EU27 side, there has been seeming non-negotiable insistence on resolution of "Brexit divorce bill" (which the UK must pay on exiting the EU), free movement of people issues and resolution of the Irish border question before any substantive talks on trade can begin. Suffice to say, the stage on which this drama unfolds is littered with wounded fighters whose goals, ideas, and reputations seem increasingly tarnished.

As should be obvious, industry in the UK, particularly in the automotive sector, has become increasingly concerned about the lack of apparent progress and the two-year clock that continues to run. While the EU27 members have recognized that it needs to consider (at least internally) the possibility of a transition period (beyond March 29, 2019 as is increasingly urgently voiced by the UK), it is clear that there will be no extension of the two-year period without the unanimous approval by all 27 EU member states. The seemingly disastrous June 2017 referendum on Brexit called by Prime Minister Teresa May only further served to undercut her government's perceived control of the negotiation process. Simply put, there is a perception that UK leverage and it's ability to progress the auto industry's vital interests appear to have been weakened.2

The current scene was aptly captured in a recent cartoon appearing The Economist under the caption: "Brexit Talks – The Current State of Play." As seen in the attached reprint, the cartoon features a tennis court. On one side is a tall, athletic EU player serving at "advantage." On the other (UK) side of the net, the court is further divided by yet another net running perpendicular to that net, dividing the UK side of the court into two halves. In each UK half, two clearly less-gifted UK players (labeled respectively "soft" and "hard") are hitting errant balls at each other (instead of contesting with the EU) and shouting complaints about each other to Teresa May who is depicted sitting on the sidelines, labeling both "hard" and "soft" as at "fault." In the background and as a reminder of the clicking Brexit two-year clock, there is the game's umpire who seeks to have the EU and the UK sides resume playing with the not-so-gentle reminder to the UK side – "time." This cartoon scene recalls the infamous statement in an 1868 New Zealand parliamentary debate which noted that "as to the Native question ... the Natives are restless, and seem desirous of fighting."

As has been clear from the outset, Brexit means change, uncertainty, and risk for business. It threatens business planning, employment, and competitiveness. As well, it makes more difficult long term investment and strategy planning. Such problems are always anathema to business. The Economist cartoon with its references to EU27 "advantage," "hard," and "soft" infighting on the UK side coupled by a weakened government blaming both hard and soft as at "fault" is a metaphor for the current dismal EU bargaining position in general and the increasingly uncertain position in which the UK industry finds itself, in particular.

From the outset when the Brexit vote went down, it has been clear that the UK motor vehicle industry, which is economically linked to and integrated with the EU, will likely, be vulnerable after Brexit.3 Urgent concerns were then and are today vocally expressed from car makers and labor leaders alike about reduced competitiveness, increased costs, currency risks, inefficiency, diminished integration in which the industry has operated until now – a 500 million person EU-wide free trade area. As one senior union spokesperson stated about the future prospects of his plant after Brexit, "it is absolutely suicidal. I am concerned about the long-term future of the plant because we don't know what Brexit means."4 Some car makers threatened to move production to the EU (e.g., France) or to EU trade zone countries (like Turkey) unless the UK holds car makers harmless from anything post-Brexit that would make its vehicles less competitive in the EU. While the UK government publicly assured that it will protect the motor vehicle manufacturer from any downside consequences from Brexit, the specifics of how, when, and in what form such protection might take remain unclear. Perhaps, the message was "trust us, we're from the government.5

The consequences for the UK auto industry are enormous. Most UK auto makers are foreign owned and have built facilities in the UK to serve an EU-wide market. They have no "historic" tie to the UK. Not only do these UK manufacturers export two-thirds or more of their production to the EU27 but they have integrated their UK plants into their EU wide systems for design, parts manufacture and assembly and engineering resources parts manufacturer. Loss of the current free-trade access to the EU27 which would potentially make UK producers less competitive and such competitive diminution may well be compounded by potential currency distortions due to fluctuating euro/pound rates. A Toyota representative put it succinctly about Brexit risks: "trade and barrier-free market access" and "uncomplicated and predictable customs arrangements" are "vital for future competitiveness."6

Thus, the horizon looks rather bleak, at present. There has been seemingly little or no concrete progress to give the UK auto industry necessary assurances. Ironically, while a transition period may help the politicians on both sides of the channel buy time to reach a final solution, a transition period may pose its own set of problems for industry if it requires, in effect, that industry accommodate first to changes applicable during the transition period7 and then have to adjust to a new playing field once the final Brexit deal is struck.

There will be renewed Brexit negotiations at the ministerial level in December. One can only hope that UK infighting will have stopped by then, that the EU27's pre-conditions will have been satisfied and that serious negotiations on the post-Brexit world can begin. What that post-Brexit world will look like remains, of course, unknowable; however, increasingly there is perception that the UK may, by default, exit the EU and have to rely on its rights and obligations as a member of the WTO. While the WTO platform provides a recognizable and enforceable set of rules on issues like tariffs on goods, trade procedures, standards, etc., reliance on WTO membership will be a clear step down from the free trade benefits which the UK had enjoyed as a member of the EU. It will likely take a long time, perhaps years, to regain the free trade position that the UK is giving up as it exits the EU. Clearly, as time goes by, the natives are getting restless. The Brexit clock continues to tick toward 2019 ... and beyond.


1 Prior articles reviewed: 1) developments leading up to the Brexit vote, likely competition law as well as procedural implications; 2) risks/uncertainties for standardization and innovation; 3) possible legal alternative outcomes posed by Brexit – a hard landing, a soft landing or never-never land; 4) wheeling and dealing to shore up political and economic support; and 5) the commencement of the formal divorce proceedings. Links to the prior five Brexit articles posted on the Foley & Lardner Automotive Blog are as follows:–standards-and-innovation-what's-ahead-08-15-2016/

2 See "Toyota Demands Clarity over Brexit," The New York Times (October 25, 2017); "Tied to Europe, Britain's Car Industry is Vulnerable after Brexit," The New York Times (December 6, 2016).

3 See December 2016 report at .2.

4 Ibid.

5 As previously noted, such a scenario poses tough political, economic and legal questions. Where does it end with the motor vehicle manufacturers, the parts suppliers, etc.? It is reportedly as well that UK pharmaceutical companies face similar challenges as well and demanded to be held harmless. What about services, banking and innovative research? If the UK tried such a hold harmless approach, wouldn't the EU27 industries seek the same protections? In any event, politics aside, such a bailout would likely be illegal and unenforceable under WTO "anti-subsidy" trade rules which the UK (and the EU27) in a post-Brexit world will both still have to obey.

6 Ibid. See "Theresa May Wants Brexit Trade Talks. The EU Wants More Money'" The New York Times (October 20, 2017). This trade talk imperative that the UK asserts is not only true with the UK's future trade status with the EU27 but as well with its other major trading partners – the United States, Japan, China, Canada, Australia, etc. – which have all been approached by the UK during this pre-Brexit phase but have uniformly rebuffed the UK's initiative as premature.

7 It would be highly unlikely that any transition period would simply continue the status quo despite the stated position of Prime Minister May that UK industry should not have to make adjustments twice as the UK exits the EU.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
TMF Group
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
TMF Group
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions