Theresa May has still not made her big Brexit choice

The prime minister still has choices to make Credit: PA

The EU’s guidelines for trade talks with the UK, which will be sent to EU members tomorrow or possibly later today, will confirm - if it were needed - that size matters in such commercial negotiations.

Because they will show that the countries remaining inside the EU’s giant single market intend to dictate the nature of our future access to that market - and that most of the rest of the EU has only limited enthusiasm for Theresa May’s vision of a trading partnership based on mutual recognition of rules and regulations.

The EU’s President Donald Tusk has listened politely to what the PM said on Friday about the kind of access we would like, namely a broader and deeper trading relationship than a classic free trade deal or FTA, and will respond with a conditional but unambiguous "No".

Donald Tusk will likely say 'no' to the prime minister's entreaties Credit: PA

Or rather his guidelines will signal that what the EU is prepared to negotiate is the least of what the PM wants - namely a free trade agreement similar to the arrangement it has with Canada - unless the prime minister is prepared to surrender some (at least) of her red lines.

Her hopes that so-called mutual recognition of our standards would provide many of the benefits of membership of the single market and customs union will be dashed - unless she is prepared to cross the red line that would then see her run over by Jacob Rees-Mogg and Boris Johnson in that giant red Brexit bus, namely that the European Court of Justice must be the arbiter of whether the rules for our businesses really are in spirit and effect the same as theirs.

Jacob Rees-Mogg and other Brexiteers are closely watching the PM Credit: PA

There is simply not the faintest chance that EU government heads will waiver from what, for them, is the sacred principle that when it comes to interpreting their law, their court has to be supreme.

British officials and ministers can huff and puff all they like that this is unreasonable, that there is plenty of precedent for other supranational bodies acting as permanent arbitrator of the kind of arrangement we want.

But the EU will say what matters far more is that the success of their single market is based on the primacy of European law. And they will not waiver from that principle.

By the way, they will be minded to waiver even less by the success of Eurosceptic populists in Italy’s general election.

Compromise with the UK beyond a very limited point would be seen to encourage anti-EU politicians everywhere - which is the last thing they want.

The UK is unlikely to get the benefits of EU membership without the obligations Credit: PA

For what it is worth, EU governments were pleased to hear Mrs May acknowledge that the UK cannot have the benefits of EU membership without the obligations.

But they don’t think she yet properly understands which obligations are for them irrevocably paired with the commercial benefits we want to retain.

This is particularly chilling for the City and financial service firms - because it makes the government's hope that a mutual-recognition deal on regulations would deliver the benefits to them of single-market membership even more unrealistic than it is for manufacturers.

The prime minister may have to sacrifice some of her red lines Credit: PA

A clear eyed assessment of all this presents the PM with three choices.

She can negotiate in the knowledge that the tariff-free and frictionless access to the single market she seeks will require her to sacrifice her red lines - most notably the supremacy of British law over European law, the future right to negotiate free trade deals with third-party countries like the US and China, and the end of meaningful payments into the EU’s budget.

But if she moves thither, she would have to appeal for support in parliament above the heads of her Brexiter ministers and MPs - and that might well destroy her party. So that isn’t going to happen.

Or she could face up to reality and publicly acknowledge that the UK won’t get better than a Canada-style free trade deal, for as long as she insists on her red lines.

But parliament would never vote for such a limited deal. And as and when parliament rejects such a deal, or it became clear that it would, she would be forced to reconsider the sanctity of her red lines - which would (obvs) also split her party. So that isn’t going to happen either.

Brexit negotiations will continue to crowd out other government business Credit: PA

What is going to happen is that the conceit will be sustained by her and her colleagues that her speech is a rational basis for negotiation.

She will kick the can down the road in the Micawberish hope that something will turn up.

As a result, Brexit negotiations will continue to suck all the energy and initiative out of this government, and for many months and years they will continue to crowd out all other sensible government business.

Arguably the tragedy of Brexit is not Brexit itself, but the opportunity cost it represents, the way that it is preventing the UK mend itself.