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TCW’s Brexit watch


IN his FT Brexit Briefing (an email to subscribers) on Tuesday, Jim Brunsden wrote that Mr Barnier’s ‘ambitious’ offer of tariff-free trade for the UK in the EU single market for goods is an offer that’s too good to refuse. 

Further reading of his article, however, reveals just how bad this ‘ambitious’ offer is in terms of the extent of regulation that the UK would have to accept  as well as the free access to UK fisheries and ECJ jurisdiction over trade dispute and regulation it demands, all detailed by Ruth Lea today in TCW.

In addition these conditions, which would effectively grant us a trade colony status, could be toughened by France before negotiations start. Neither would the ‘offer’ give the UK a deal on financial services. 

It was a great piece of showmanship by Barnier. But the reality is a gruesome colonial arrangement for the UK. 

A Swiss report of a prior meeting in which Barnier met Brussels envoys of the 27 EU countries ‘as part of preparations for looming talks on a new EU-UK deal’ to start after Britain leaves the bloc, reveals even more of Monsieur Barnier’s thinking on the matter. He told them that ‘a loose so-called association agreement like the one the bloc has with Ukraine should serve as the basis for a new relationship with Britain’.

This information came from ‘diplomatic sources’ who told Reuters that Barnier stressed that the bloc would not give ground on its key principles; was ready to hold negotiating rounds with Britain every three weeks on a dozen or so issues in parallel; and that he had identified fisheries and trade areas as carrying the risk of potentially the most damaging rupture in ties should talks not yield an agreement on a new deal by the end of 2020, when a post-Brexit status quo transition period ends.

He was further reported to have said that the EU would assess progress in July. For any dispute-settling mechanisms, Barnier said there must be one governance agreement and rejected a solution modelled on Switzerland, with which the EU has myriad separate deals. He said his team will seek to apply EU state aid rules to the UK even after Brexit and that a thorough implementation of the divorce deal was crucial to build trust for the looming negotiations on a new relationship between the bloc and Britain.

The important point to be made about this concerns his reference to the Ukraine, a country which seeks to gain membership of the EU and which currently has a relationship of a virtual EU colony: under the Ukraine–European Union Association Agreement it has to obey virtually all the EU regulations yet has no say, as it is not yet a member state. Indeed it has been pointed out that the WA resembles the transition period placed on the Ukraine to get it ready to apply for membership. This would be an outrageous imposition on the UK with its almost 50 years of being a member and a squeaky clean record of national life in obedience to the EU.  

This ‘offer too good to refuse’ is a trap. It raises the question of whether we are back to the Theresa May days of fending off EU threats and bad faith, an EU determined to keep its vast trade surplus and give absolutely nothing of a deal for financial services in return – which, again as Ruth Lea explains, is crucial for the UK. 

The worrying part of Brunsden’s article was his observation from Boris Johnson’s speech that he thinks if all fails that trade could be based on the existing Withdrawal Agreement with the EU:

‘We want a comprehensive free trade agreement similar to Canada’s, but in the unlikely event that we do not succeed then our trade will have to be based on our existing withdrawal agreement with the EU,’ the Prime Minister said.

As diplomats in Brussels pointed out, that while this could have made sense in the Theresa May era, given that her Brexit deal foresaw the creation of an EU-UK customs union, it is nonsense now. 

It would also suggest, as the BBC’s Laura Kuenssberg has insisted, that despite Mr Johnson’s commitments, the UK could prolong the ‘status quo’ with the bloc: ‘One former minister suggests waspishly that by suggesting we could leave with a relationship just based on the Withdrawal Agreement, that the Government has already got its capitulation in early. 

‘Under their interpretation, just basing it on the Withdrawal Agreement would mean prolonging the status quo of the transition period, where we pay into the budget and follow the EU rules.’

Does Michael Gove also think that this is where we might end up? He has also said that while he’s ‘confident that we will get a good deal with the EU,’ which he thinks is ‘in both of our interests . . we’ve already got a deal, the withdrawal agreement, to make sure our central interests are protected.’ 

Really so?

The urgency of shaking hands with the USA grows by the day.  Even London’s Mayor, Sadiq Khan, is now urging the dropping of the anti-US digital tax  

Even if the mad Huawei deal has to be kicked into touch for the moment Boris needs to recognise that the EU is planning nothing but harm for the UK. He also needs to know his own power. As Ruth Lea so rightly says, everyone must ‘put the ludicrous notion that we are the weaker partner in these negotiations to bed, once and for all. It quite simply is not true.’ 

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

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