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Business Last Updated: Feb 27, 2020 - 11:44:49 AM


Le crunch: are the Brexit talks doomed before they begin?
By James Forsyth, Spectator, 29 February 2020
Feb 27, 2020 - 11:43:32 AM

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The EU and the UK are set for a bad-tempered first few meetings

When Boris Johnson and the new European Commission President Ursula von der Leyen met in Downing Street last month, they agreed on one thing immediately: that it was time to stop the sniping, animosity and backbiting that had characterised the first round of the Brexit talks. The Prime Minister emphasised that Britain wanted to be the EU’s close friend and ally.

Only a few weeks later, and already the Brexit wars are back. The two sides are so far apart that many diplomats think there is a better-than-even chance that the talks will fail. One member state is already planning around the central assumption that there will be no deal by the December deadline. For its part, No. 10 is braced for the talks to collapse sooner rather than later. And all this before the negotiations have even started.

For No. 10, the whole point of Brexit was in order that Britain could break free of EU directives — but the first issue to be discussed is the so-called ‘level playing field’. Brussels is adamant that unless Britain gives a long list of undertakings about its future behaviour (including adhering to EU state aid rules), talks cannot proceed. No. 10 says this is preposterous, and that it will not negotiate on this basis.

What Boris Johnson wants from the EU is very different to what Theresa May required. May was determined to avoid — or at least minimise — friction at the border. She proposed a deal where the UK would remain almost half in the single market and the customs union. There would have been what she euphemistically called a ‘common rule book’ (ie, the EU’s rule book) governing manufacturing and agriculture. This was the issue over which Johnson resigned, saying that the UK was ‘headed for the status of a colony’.

Johnson is not asking for frictionless trade. He’d like a free-trade agreement with the EU — albeit one with tariffs and quotas as close to zero as possible. He’d be happy with a fairly standard free-trade deal where the ‘level playing field’ consists of a general agreement not to lower employment and environmental standards to try to gain a trading advantage. He harrumphs that the UK already has higher standards than the EU requires in many areas, and that his government intends to raise them still further.

But the EU’s definition of a ‘level playing field’ isn’t all that level. Its negotiating mandate says that EU standards will be the reference point on subsidies for struggling companies, employment rights and the green agenda. No. 10 protests, saying the EU made no such quasi-imperial requests when it agreed a trade deal with Canada and Japan. To which the EU response is that the UK and EU economies are so intertwined that these conditions are appropriate. In other words: Britain is too close to be given such freedom.

To Sir David Frost, Boris Johnson’s chief negotiator, this shows that the EU is still struggling to come to terms with the very fact of Brexit. The EU, he said recently, needs to ‘genuinely understand, not just say it, that countries geographically in Europe can be independent countries’. Influential figures on the EU side privately scoff at the idea of the UK as a ‘sovereign equal’. The EU view is that in trade talks, size is everything, and that for the same reasons, the UK will also be roughed up by the United States when it comes to discuss trade.

The EU’s strategy is to offer plenty of carrot — saying that if the Brits sign, the EU will do what it can to ease frictions at the border. Everything will be as light-touch as possible. But if no agreement is reached, then the stick comes out: they will take the strictest interpretation possible of all border procedures. Brussels believes that the threat of the garden of England turning into a lorry park will trump concerns over sovereignty.

What puzzles many in government is how the EU (which has a history of misreading British public opinion) can genuinely believe this will work. First, Boris Johnson doesn’t just lead a Brexit government; its central conviction is that the whole point of leaving the EU is to do things differently. Every member of the government’s negotiating committee campaigned for Leave, and thinks Britain needs to be in charge of its own rules and regulations. The more the EU seeks to tie the UK down, the more convinced the British side becomes of the benefits of divergence.

Then there is the 80-seat Tory majority to consider. If the two sides decide to indulge in tit-for-tat measures at the border, that will cause pain to consumers and the wider economy. But Boris Johnson does not have to face his voters again until 2024. Nearly every other European leader is up for re-election before then. They would have to pay the electoral price for this economic disruption long before he would. This is one of the reasons why No. 10 thinks that the EU won’t ultimately follow through on their threats.

The UK and the EU are also arguing over things that have in theory already been agreed. There are competing interpretations of what the Irish protocol, which must be implemented by the end of the year, means. The EU and the Irish government are already angrily warning that if they think that the UK is reneging on this agreement, then the trade negotiations will collapse. But the reshuffle — which saw Geoffrey Cox replaced as Attorney General by Suella Braverman, and Brandon Lewis take over as Northern Ireland Secretary — along with the instructions given to the government’s Task Force Europe suggests that the government intends to take an aggressive approach to this issue.

The end-of-year deadline is causing irritation too. The EU thinks that the UK is trying to use this deadline pressure to force concessions, and the French are already dismissing it as a form of ‘blackmail’. Boris Johnson, by contrast, feels that the EU is ignoring the fact that it signed up to trying to get a deal by 31 December in the political declaration. One of his first acts after re-election was to repeat his line from the campaign trail that there will be no extension to this deadline.

The European side have taken umbrage at the UK’s immigration proposals, which offer no preference at all to EU citizens. (‘I’m not a racist,’ a diplomat put it recently, ‘but you propose to treat Europeans as you do Indians.’) To them, this is baffling, though not to Britain, which is home to more Indians than to citizens of any EU country.

There is another way of looking at the immigration proposals. By coming up with an immigration system that doesn’t discriminate between EU citizens and the rest of the world, the UK has ensured that if the EU wants any preference for its citizens, then it must offer something in exchange. Indeed, the nature of the new points-based system means that EU citizens could — as part of a trade deal — be offered preferential treatment without the UK losing control of immigration policy.

The EU and the UK are set for a bad-tempered first few meetings. But, paradoxically, those who want a deal should be hoping for a row sooner rather than later. The two sides need to get it out of their systems and realise that the other is serious about their position before they can start negotiating properly.

At the moment, there is an air of despair about the prospects for a deal even among those who are normally optimists. One of those close to the negotiations on the UK side tells me: ‘Maybe there’s a way through, but I can’t see it.’ Yet Brexit compromises are hiding in plain sight. On the ‘level playing field’, for example, the UK could say that while it will not follow EU rules, it will maintain its already high standards. The UK exceeds EU requirements on minimum wage, holiday rights, maternity leave and more. On the environment, our pledge to hit ‘net zero’ by 2050 was made months before the EU said it would do the same. Britain could pledge not to backtrack on any of this — and agree that if it does, the EU could respond by imposing tariffs and quotas.

But when Tory ministers talk about the opportunities of Brexit, they talk about the ability to diverge from EU rules. The UK desire to make itself into a hi-tech hub means that when it comes to data protection, for instance, it is likely to want to diverge from the EU’s cumbersome GDPR regime.

No country has ever left the EU before. No trade deal in recent times has been about where to put up barriers rather than take them down. So it is unsurprising that the negotiations are off to such an uncertain — and emotional — start. But realpolitik faces both sides. If talks fail, there will be serious and avoidable consequences — and not just for trade. An EU-UK alliance makes sense for both sides. It is simply not realistic to think that two sides involved in an economic standoff could continue to be the closest of allies on foreign and security matters.

A UK government that knows its own mind, believes in the benefits of divergence and has a stable parliamentary majority is going to take a far more robust approach to these negotiations than the May government ever did. The EU — which has understandably come to view a lot of British tough talk as bluster — should appreciate that. But above all, both sides should remember that a failure to reach a deal would be an epic failure of statecraft.


Source:Ocnus.net 2020

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