Article 132 of Theresa May's draft Withdrawal Agreement you might recall, had a possible extension to the transition period up to '31 December 20XX'. This had to be requested by 1st July this year. The undefined date, up to 2099, caused quite a stir. Johnson's deal makes this a more certain 'one or two years'. However, he now says he won't extend it anyway. Whoever drafted the article was rather clever in giving at least six months notice that a WTO deal was coming down the track.
In that sense we may not be facing a cliff edge, more an extremely steep slope.
The slope will be much steeper on our side because Brexit Johnson, in order to further weaken his already weak hand, has ordered all no-deal planning to be stopped. The EU have not. They continue to prepare for all eventualities. Barnier said in Sweden only this week "..everyone must continue to prepare for" the talks failing. All except the UK that is.
This rush for the exit is driven principally (according to BJ himself) by the need to avoid paying any more into EU coffers, even though Bloomberg put the cost of Brexit to the UK at £130 billion so far and £200 billion by the year end. Our annual EU budget payments are starting to look like chicken feed.
So, by June 30th we and the EU will need to be absolutely certain that a deal can be agreed, signed off and ratified with all necessary systems in place and tested by the end of the year. One would think Brexit Johnson is trying his hardest to get a bad deal by time limiting the talks. As Anand Menon points out in The inews a deal can be done but it really won't be much of a deal. It cannot be a comprehensive or 'mixed' agreement otherwise national and regional parliaments get involved in ratification.
If by mid-summer, there is not utter certainty about concluding a deal, both sides will need to step up planning and possibly even abandon the idea of a trade deal completely in order to focus on what needs to be done for the inevitable WTO terms. Time is tight even for temporary infrastructure and systems to be put in place so the tendency will be to err on the side of caution. The bare-bones deal will have to be the barest of all to give as much certainty as possible.
So, crunch time will be in June, and probably earlier than that. The big stumbling block will be the level playing field measures.
In his speech in Sweden this week Barnier said this:
"If we want to agree on each and every point of this Political Declaration – which would lead to an unprecedented relationship – it will take more than 11 months
"That is why we will insist on making our economic partnership subject to a level playing field on environmental and social standards, state aid and tax matters."
"So we will insist on a trade partnership with zero tariffs, zero quotas, but also zero dumping."
Having worked with the French for more than ten years, I know they are careful about the use of words. To them every word has a precise meaning and using 'insist' was not a casual thing I'm sure. If I look up the meaning of insist, it's this:
Insist, verb:
"demand something forcefully, not accepting refusal."
If Brexit Johnson believes there will be any sort of trade deal without regulatory alignment he is sadly mistaken. I read someone recently ruminating on whether we might be able to fudge it and accept it 'in principle' but not in practice. This again is a delusion. The Europeans prefer their arguments up front and won't agree anything nebulous on so important an issue for them, not when they know they have the strongest hand. Also the ERG will be watching hawk like for any backsliding.
Barnier again:
"I will approach the negotiations of this next phase with the same respect, the same objectivity, the same calm and the same patience. Brexit is a school of patience.
"At the same time, nobody should doubt the determination of the Commission – and my determination – to continue to defend the interests of the EU 27's citizens and businesses and to defend the integrity of the Single Market. The Single Market is much more that a free trade zone. It is an ecosystem, with common laws, common standards for the environment, rights for workers and consumers, common regulations, common supervisions, and on the top of this, a common jurisdiction: the Court of Justice. This is the ecosystem we have built together, with Sweden, and also with the UK for the last 45 years.
"To be clear, the integrity of the Single Market – the four freedoms – has never been, and will never be, negotiable."
In any case the whole question of the December deadline has been thrown into doubt by the French EU Minister Amelie de Montchalin who said EU member states would bide their time even if that risks causing a chaotic no-deal transition at the end of the year.
"If Boris Johnson says it must end in 11 months from now and we need 15, 24 or 36 months, the 27 will take their time," she said.
The French and the EU in general, are not going to let the tail wag the dog. Ursula von der Leyen's quiet diplomacy should not be taken as a weakness.
The setting of deadlines is self defeating, everybody agrees. But it's something Brexit Johnson can do to appear strong, as if he is setting the agenda, controlling events, so he does it even though it damages him and us. He is like a prisoner banging his enameled mug on the bars. It makes a lot of noise, but he's still a prisoner.
Brussels is happy for him to do it - for now. But after January 31st we will no longer be an EU member and our relationship will be set by the Withdrawal Agreement alone. They will use it to the full.
John Peet has a piece in The Economist this week which he tweeted about yesterday in a longish thread:
A few examples:What we have learnt about Brexit’s next stage, short thread based on my Economist piece this week. 1/— John Peet (@JohnGPeet) January 10, 2020
Changes to the WAB and No 10 language underline the Johnson view that if we are only determined about what we want then a disunited EU that needs the British market more than the other way round will fold and accept a generous FTA on our terms.
Yet as a steely von der Leyen confirmed, this is not how it will actually work. Third countries have worse access, zero tariffs and zero quotas requires zero dumping, Brussels and member states mean what they say when they demand a level playing-field and no cherry-picking.
Johnson is thus repeating the mistake from round one of assuming that Britain has all the cards. In fact his bargaining position is weak, not least because the WA has settled such awkward issues as money and the NI border. The EU also has the experienced trade negotiators.
It's a nice thread, very logical and well worth a few minutes.
All of this stuff will come to a head very quickly. There is only 100 or so days between the start of the trade talks and the need for a decision on the transition. My guess is things will get quite exciting and difficult for the PM.
All of the raised hopes are going to be dashed this year.
All of this stuff will come to a head very quickly. There is only 100 or so days between the start of the trade talks and the need for a decision on the transition. My guess is things will get quite exciting and difficult for the PM.
All of the raised hopes are going to be dashed this year.
