British Prime Minister Theresa May during a tour of the Emma Bridgewater pottery factory in Hanley in Stoke-on-Trent, central England | Christopher Furlong/AFP via Getty Images Theresa May’s Brexit trade bluff Britain needs Brussels’ goodwill to rebuild global trade ties. So count on London to bend on ‘Brexit bill’ and other divorce sticking points.

British Prime Minister Theresa May insists she has a trump card in negotiations with the EU.

She has played to her core Euroskeptic supporter base by claiming that she will simply walk away from any Brexit deal that shortchanges the U.K. Hard-line Brexiteers insist that May can turn her back on the EU in 2019 and secure trade deals with dozens of new partners around the world from North America to Australasia.

That is, any way you look at it, a bluff or a fantasy. Britain will, ironically, be highly dependent on the EU's goodwill if it wants to pursue its own trade agenda. This is due to a somewhat obscure corner of World Trade Organization rulemaking that will soon come to dominate the Brexit debate.

If Britain wants to chart its own course as an independent WTO member — and agree deals across the globe — the U.K. will need to secure a sort of trading passport called "WTO schedules." These schedules are the basis for any trade deal and would determine the terms on which any country can engage with the U.K. Without agreed schedules, London will be in trade limbo.

As the biggest trade bloc in the world, the EU holds enormous power in determining whether the WTO accepts the U.K.'s schedules, based on Britain's duties, quotas and subsidies. Goodwill in Brussels is critical if Britain wants a green light for deals with the U.S., Canada, India and South Korea. "May has cornered herself ... The EU will hold all the cards," said a senior WTO official.

Our man in Geneva

Most worryingly for the U.K., there are glaring reasons why the EU would push back against the schedules that the U.K. has proposed for itself.

Britain argues that it has a simple and conciliatory solution to the problem: It can keep the EU's schedules, under which it currently trades as an EU member. Britain is a WTO member already, but only under the auspices of Brussels, which handles trade policy for all 28 member countries.

As Julian Braithwaite, Britain's ambassador to the international institutions in Geneva, put it in a recent blog, "To minimize any grounds for objection, we plan to replicate our existing trade regime as far as possible in our new schedules."

People in Geneva said Braithwaite had indeed launched a diplomatic charm offensive to persuade the 160-plus members of the WTO that it would be easy to avoid a trade shock after Brexit by simply allowing the U.K. to roll over the EU's schedules. "Every member will have an opportunity to raise any issues or concerns with us before we proceed," Braithwaite said.

Britain faces the prospect of death by a thousand cuts as it tries to win support from WTO members to negotiate new trade deals.

Keith Rockwell, WTO spokesman, said many countries would prefer this rollover as a way "not to hinder trade after Britain exits the single market."

But there are two big problems. First, several major non-EU countries will only agree to the U.K.'s new schedules if they can win some concessions. Britain faces the prospect of death by a thousand cuts as it offers repeated sweeteners.

According to diplomats in Geneva, South American countries will bargain for more generous quotas for their beef and orange juice. China wants Britain to open its market to Chinese cars. Their threat is unambiguous: One Latin American WTO ambassador told POLITICO that his country could ask for better market access as a precondition to agreeing to the U.K.'s schedules.

Brussels says 'no'

The second problem is more fundamental: Brussels has little commercial incentive to allow the U.K. to adopt EU schedules.

The EU's WTO schedules map out the basic tariffs for goods coming into the 28-member bloc. That means, for example, duties on cars of 10 percent and 12.8 percent on lamb.

If Britain were allowed to take the EU schedules, those same tariffs would apply both ways. The EU does not want to be hit by its own tariffs when trading with the U.K. One senior WTO official said the EU could "play dirty" and block Britain's schedules. This would hurt both parties but the U.K. has greater dependence on exports to the EU than the EU has on exports to the U.K.

Foreseeing the dangers, Braithwaite promised that Britain would "work closely with the EU" during the process to secure schedules.

"Once Britain is out, of course the EU's external tariffs will apply. This is why a trade deal is needed" — Germany's ambassador to the WTO Walter Werner

Identical WTO schedules in the EU and the U.K. would be a particular problem for industries with integrated supply chains, such as cars and aviation. Without a trade deal to lower those barriers, many would be forced to relocate away from the U.K. because their product parts travel back and forth across the English Channel, and would be hit by tariffs on each crossing. Japan has raised this as a specific danger for its U.K. car plants, such as Honda and Nissan.

WTO spokesman Rockwell added that because wide-ranging supply chains are involved in automobile production "some components and other parts could cross borders several times, so products going in both directions could end up costing more than just the 10 percent."

Germany's ambassador to the WTO Walter Werner said that both the EU and U.K. would be keen to avoid repeated duties on goods in complex supply chains: "Once Britain is out, of course the EU's external tariffs will apply. This is why a trade deal is needed," he said.

Given the negative consequences for both parties, several diplomats saw Britain's request to rollover the EU's schedules as an attempt to coax Brussels toward a quick trade deal, or at least a "transitional agreement."

Dropping off the map

There are massive strategic concerns for London if no deal is struck. Britain will not be allowed to lower its tariffs for the EU alone — to create a sort of successor to the single market — because of a WTO rule that prohibits countries from granting one trade partner better terms than it does to the rest of the world. If Britain lowers its trade defenses to preserve tariff-free trade with the EU, it would also have to lower duties on the same goods imported from Latin America and Asia.

In immediate terms, the other 163 members of the WTO could look to sue the U.K. over its terms of trade. “It’s likely other countries will bring the U.K. to court on parts of the schedule of commitments they don’t like,” said Gary Hufbauer of the Peterson Institute of International Economics.

Britain has every incentive to strike a 'Brexit bill' deal with Brussels to ease the way for future trade ties with the world.

One Western European diplomat said the prospects of no deal were "nightmarish, because it would mean that Britain and the EU have ceased to cooperate." Still, that could happen, the diplomat warned, if the U.K. refused to pay its "Brexit bill" — the €60 billion or so that the EU wants the U.K. to pay as its departure fee.

Without an EU trade deal and with its schedules in limbo at the WTO, Britain would find itself a trade pariah.

The Western European diplomat argued that while it would be legally feasible for the U.K. to negotiate trade deals, Britain could become a toxic case. Other countries would avoid negotiating with Britain before they fully understand its relationship with the EU.

"It's like a triangle," the diplomat said. "You know your relationship with the EU and your relationship with Britain, but if you don't know the relationship between Britain and the EU, you don't know how much your trade with them is worth."

One senior WTO official said that free-trade negotiations would lack their foundation. "A free-trade deal is an accord about a preferential arrangement. But you have to ask yourself, 'Preferential from what?' ... Schedules are the baseline. Without the schedules, you don't know what you are negotiating on."

He concluded that negotiating a trade deal with Britain before the U.K. had clarified its relationship with the EU was in the interest of "no rational country."