Friday 10 January 2020

Trade talks: the scene is set

Yesterday, on the day the Withdrawal Agreement Bill was voted through its third reading with a majority of 99, the NHS released figures showing the worst waiting times for A&E in December since records began, and the third month in a row to hit new lows, while Mark Francois complained that big Ben would not chime on January 31st. At least we know where his priorities are. Are these events connected?  Depending on your point of view, perhaps they are.

We also learned that Liberty Steel is axing 250 jobs at their Stocksbridge plant, and 282 jobs altogether in South Yorkshire, an area which voted to leave the EU in 2016 by almost a two thirds majority.

Are these events a symptom of Brexit?  I don't know for sure but I don't believe Brexit is innocent either. I expect to be reading a lot of these stories going forward and remainers must make sure we use them wisely.  Without being patronising, we must show the link - wherever it exists.

Last October, when Brexit Johnson was struggling to extricate himself from his first self-imposed deadline and the EU were showing no signs of crumbling, Cummings decided to send an 800 word text message to James Forsyth who writes for The Spectator. He published it verbatim. It was macho stuff and threatened all kinds of dire consequences for EU27 countries which didn't help us to leave on October 31st with or without a deal. Varadkar came in for a lot of opprobrium. The message was clear, the UK were not going to be pushed around. This is a sample:

"As things stand, Dublin will do nothing, hoping we offer more, then at the end of this week they may say ‘OK, let’s do a Northern Ireland only backstop with a time limit’, which is what various players have been hinting at, then we’ll say No, and that will probably be the end."

It all looks extremely silly now.  The EU took no notice and Brexit Johnson quickly capitulated - accepted the NI only backstop even without the time limit! - and the deal which was 'dead' was resurrected but on EU terms. We were pushed around.

Well, Cummings has I think done exactly the same thing again on the eve of von der Leyen's visit to London and through the Forsyth conduit once more. His article is titled: Revealed: Boris’s blueprint for Brexit.  Although he is referred to as a 'senior government figure', I would be surprised if this was the work of anyone other than Cummings. The article, not verbatim this time, has his fingerprints all over it.  Example:

"Now, the government knows what it wants: to break free from EU rules and regulations and chart its own course. This was made clear in Monday’s meeting of the cabinet’s Brexit strategy committee. There is the understanding that this will not mean things carrying on as before. The government accepts that trade will not flow as seamlessly across the Channel after Brexit. ‘There is going to be some friction,’ says one senior figure."

It is full of swagger and pugnacity, threatening and intimidating.  The cabinet is united, we know what we want and you're going to give it to us, verstehen?  Comprendre?

The key paragraph is this one:

"I am told [by Cummings?] that there is ‘no way’ the government will go for a high alignment model to prevent friction at the border. If we have heard little about the advantages (i.e. the point) of Brexit, that’s because, under May, government departments learned to say little or nothing about the potential upsides. They worried that these upsides might not end up existing: why trumpet how leaving the EU will allow you to do something if the eventual trade deal required compromise on that point? But the word has now gone forth from Downing Street that departments should look at opportunities, and not worry about pre-empting the negotiations. A crucial shift has taken place. As one cabinet minister says, the government is now ‘more open to exploring the opportunities of divergence than the constraints of alignment’."

It will be fascinating to see how his new MPs from the north east and the west midlands behave as the trade talks progress with the government deliberately working towards creating friction at the borders. Friction = cost and cost = job losses. Job losses = revenue losses and ... well, you get the picture. 

As for government departments looking at the "opportunites" of Brexit, words fail. We are three years on and they haven't found any opportunities out of the greatest self-imposed upheaval for seventy years!  For Heavens' sake!  You would have thought Cummings and Brexit Johnson would have discovered some opportunities themselves by now instead of belatedly exhorting departments to try and find them. Isn't it clear? What if there aren't any?  We are so far down the line now they will probably have to be invented whether they exist or not. 

 I don't expect any different outcome to Cummings' previous effort.

To me it is another pathetic attempt to pressurise the EU into folding and making concessions while reassuring the ERG that we are indeed returning to the 18th century to relive the industrial revolution. Britain was booming then, workers were doing 16 hour days, seven days a week in dreadful conditions for a pittance. Rees-Mogg will be in his element.

This will be a test of Johnson's resolve. The article claims he is prepared to walk away, that it was previously only parliament's threat to block his withdrawal deal last year that caused him to capitulate and make concessions. We shall see.

The Gulf Times (the best articles are always published overseas for some reason) carries an item about the reaction of business and business groups to Brexit Johnson's 'strategy' and they are not at all happy with it:

"This is going to be a crazy rush, said Anna Jerzewska, an independent customs expert and consultant for the British Chambers of Commerce. "I don’t think people understand how much we need to do in such a short period of time."

Jerzewska said Britain will want to conduct a thorough impact assessment of UK-EU trade before the talks begin so it knows its red lines in the negotiations. That exercise is yet to happen and the UK lacks the capacity to do it quickly, she said.

The Week Magazine also has some excellent links to other recent articles about the trade talks:

In a meeting with the prime minister in Downing Street on Wednesday European Commission President Ursula von der Leyen said that the issues to be resolved would have to be prioritised, “setting the scene for an early confrontation between the two sides in deciding which areas of future co-operation to tackle first”, says The Times.

One major area of tension already emerging appears to be over fishing. George Parker in the Financial Times reports that Johnson told von der Leyen that Britain would insist on “maintaining control of UK fishing waters” after it leaves the EU, “setting up a big clash with Brussels as the two sides prepare for testing negotiations after Brexit”.

“Even if a ‘basic’ deal is cut, covering some sectors in time,” says The Independent, “any businesses not covered by it would be hit.”

And finally, echoing what some have already pointed out, Alex Dean in Prospect Magazine, explains that a free trade deal, especially a quick one will be bare-bones for goods and will not even cover services at all.

What a mess.