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TCW’s Brexit Watch


THE UK, as polling expert Professor John Curtice reminds us in the Express this week, is still far from a Brexit and in many ways we are in the same sort of position as Theresa May when she was negotiating with Barnier so disastrously. The war is still on and if anything getting fiercer: ‘Very little of what has been decided so far has been settled’. This was due to the Brexit sequencing which the former Brexit secretary David Davis thought was wrong, but which in the end the United Kingdom accepted.  

As we’ve been reporting, our French friends Macron and Barnier are adding more and more outrageous demands and conditions for ‘a deal’ with the EU.

Their aim is to maintain this bombardment and gain political controls over the UK, rather than negotiate a reasonable deal, and this is now acknowledged by a raft of leading economists. Jeremy Warner of the Telegraph, who is not a Leave proponent,  asks why the EU is apparently determined to cut off its nose to spite its face with its conditions and demands that can only be rejected. He thinks that increasing numbers of commercial leaders are beginning to accept that a no-deal outcome becomes more and more likely. Roger Bootle, also in the Telegraph, goes further, likewise arguing that a no-deal Brexit, which would once have caused deep perplexity, now is being greeted with more or less equanimity by the experts. It is dawning on them that the UK would do fine without an EU deal, although it would be preferable to have a fair one. The issue, says Bootle, is the survival of the EU after Brexit, with the core foundation of the Franco-German axis eroding fast, and the euro still having a distorting impact on the bloc with no sign of reform. 

The Telegraph’s Liam Halligan points out that the recent twists, turns and contradictions in Barnier’s demands and the goal of making the UK a unique problem nation to be regulated and ruled as part of any trade agreement are bad faith: 

‘The Prime Minister will today finalise the UK’s negotiating strategy before UK-EU trade talks start next week. Johnson will clearly walk away with no FTA rather than accept European Court of Justice (ECJ) oversight and regulatory alignment. The EU, in contrast, struggled to reach a common position, finally agreeing one last night. Arguments about the Brexit-shaped hole in the EU budget – the UK paid £13.2billion in 2018 – are becoming bitter. And President Emmanuel Macron, lagging Marine Le Pen’s hard Right in the French polls, wants tougher conditions imposed on any UK FTA. Berlin, though, knows that billions of euros of profit and millions of EU jobs rely on the bloc’s €125billion UK trade surplus. If cool minds prevail over political spite, the EU has much to gain from a UK trade deal. That’s why we’ll see a genuine negotiation – in which Britain, free of its anti-Brexit parliament, holds strong cards.’

Britain and the European Union are heading for a bust-up when the talks on a trade agreement begin next week, headlines read on Tuesday, with Barnier insisting that the UK must agree to a ‘level playing field’ on rules and regulations and access to fishing waters ‘or there won’t be any agreement at all’.

The Independent said that the hardened EU negotiating mandate requires the UK to match future regulations in return for access to the single market. It confirms a target date of June for agreement on fishing rights, yet ditches a commitment ‘included in last year’s political declaration at British insistence – to conclude assessment of one another’s financial services regulations by the same date, as well as a deadline for a data equivalency concord’.

Meanwhile a committee of cabinet ministers, chaired by Mr Johnson, agreed their negotiating mandate (due to be published today)which promises to put a clean break from Brussels rules ahead of smooth trading relations. 

According to the Times, the EU’s first ambassador to Britain, João Vale de Almeida of Portugal, has tried to pour diplomatic oil on troubled waters, urging us to pay no attention to the war of words, but saying significantly that both sides will know by July if an extension is needed: ‘Theoretically we can do it in a year, we can do it in more than a year, we will have to decide in July,’ he said. ‘What we know is by July we need to decide in agreement with our British friends or our British friends need to ask or not ask for an extension. I’m sure if the Brits request an extension we will look at it favourably, but according to the government they have no intention of doing so. We’ll see.’ Here we have the essence of the EU battle plan, revealed in Almeida’s smooth attempt to ‘cool down the rhetoric’ following the first threatening noises made by Macron and Barnier, yet no less dangerous for all his diplomacy.

Which is all about getting what they want in a conditional sequencing process, securing fisheries access and defence provision, before negotiating about real trading arrangements. It is about the EU being able to say in July: ‘We have not made the progress needed for a deal at the end of December, so you must seek an extension.’ The question is, will it then be back to Theresa May’s Adventures in Wonderland with the ‘sorry, no cherries’ global mockery, back to Johnson’s promise to leave at the end of October 2019 and never seek an extension, to exactly where we have been before?

Though under excruciatingly difficult circumstances, Johnson has broken his promise to leave before, as he did his promise to the DUP never to accept an Irish Sea border. His promise of an oven-ready deal is also looking remarkably underdone. Instead we have an escalating war of words with much now depending on his psychology and moral courage. Can he hold his nerve and not give way to the EU heavy artillery?

To do so he will need strong political and civil service support. This week the FT saw relations with Whitehall souring and a fight back against briefings that Johnson would be taking them on, not least, as the Mail reported, the Home Office doing all it could to belittle and weaken a (strong Brexiteer) Home Secretary trying to implement policy and stop the civil servants supposedly helping her from blocking and delaying reform (from the Spectator).

Mr Johnson has a lot on his hands. The Environment Department (Defra), the Express reports, is a Blairite, politicised stronghold which detests the new PM and has attempted to sabotage Brexit. The battle with the Treasury has also been fierce, and the MoD continues on its mission to sign the UK military into PESCO, as we’ve reported.  

On Huawei, the Prime Minister is dutifully but inexplicably toeing the Whitehall line, insisting on integrating the Chinese giant into our new 5G telecoms system and rendering the US President apoplectic.

The question remains about the Foreign Office’s failure to pursue a Nordic Baltic nations partnership, countries that have a great expertise in telecommunications, which could be a vastly better alternative to Huawei for 5G. 

The UK’s tardiness in starting trade talks with the USA should be deeply concerning for Brexiteers, as Steven Swinford has reported in the Times.

He writes: ‘Mr Johnson has said repeatedly that he wants to hold negotiations with the EU in parallel with America. Ministers believe that such an approach would give the UK “leverage”. There is mounting fear, however, that the deals will be negotiated by two separate teams. David Frost, who is leading the trade talks with Brussels, is understood to have made clear that he does not want any involvement with the US negotiations. The apparent lack of co-ordination has alarmed Eurosceptics, who fear that the government will “prioritise” talks with Brussels. Steve Baker, chairman of the European Research Group of Tory MPs, said: “We need to be negotiating with the US now. I’m concerned that our negotiating mandate isn’t already out there. Time is running out with our best ally as we head to a presidential election”.’

Subsequent to Swinford’s article the Express broke the news that there are to be trade talks with the USA.  But they do seem to be very secondary to the EU negotiations, and something of a side issue in governmental priority. Steve Baker is reported by the Times as saying: ‘There’s a danger of failing to co-ordinate and excessively prioritising the trade deal with the EU. I am concerned to understand why the prime minister is not there [in the US] already.’ 

Sir Iain Duncan Smith, the former Conservative leader, said: ‘Success requires us to run both EU and US negotiations in lock-step. In that case we will be calling the shots. If we do it separately we will have no leverage, the European Union will hold all the cards. We will end up with no deal. Europe has got to understand and believe that we’ve got somewhere else to go and we don’t need them.’

The concern is clear – that Johnson is not seizing the alternative of a USA future partnership seriously, although talks have been announced. Referring back to the statement of the former EU Ambassador to the UK, July will be crucial for the history of this country. By then we will know if Johnson is caving in to EU pressure, or if he will have the courage to face down the massive Whitehall Rejoiner pressure to remain under EU regulation for good.

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Timothy Bradshaw
Timothy Bradshaw
Timothy Bradshaw is a Theological lecturer and Anglican clergyman

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