The fourth round of talks ended yesterday as expected without any progress and with Michel Barnier taking an extra hard line saying there has been no substantial progress since the beginning and that it cannot go on forever. The usual areas were named as the LPF, governance, judicial cooperation and nuclear safety. It seems frustration with Britain's position is growing but David Frost issued his usual written statement which gave nothing away. If the UK's intention is simply to rub the EU27 up the wrong way it seems to have been extremely successful.
Amid all the commentary I noted this tweet from Mutjaba Rahman of the Eurasia group who seems well connected in the EU.
EU idea is a bit different. There's no time to agree FTA w/tariffs this year. Discussion among EU27 would be too hard. Instead, agree to a zero/zero deal now - & then *subtract* from it over time. Will avoid the cliff; allow more UK freedom from LPF, give EU time to agree tariffs https://t.co/w9axDKTjz3— Mujtaba Rahman (@Mij_Europe) June 5, 2020
He seems to be suggesting that the EU are discussing an idea known as 'managed divergence; where we stay aligned in January and gradually diverge over time, with the risk that when we choose to do something differently we lose access to the single market or face tariffs or whatever.
Jill Rutter of the Institute for Government tweeted that it was one idea they had proposed way back in December 2017:
yay - its back to managed divergence.. agree to start off aligned - but UK pays a price in terms of market access if it decides to diverge down the line ... @instituteforgov from Dec 2017 - model 3... https://t.co/B84jEgW68v— Jill Rutter (@jillongovt) June 5, 2020
The option she is talking about is actually model 4 (not 3 as she said) and is about managing regulatory divergence over time. Note by the way the IfG say in the foreword that we don't have much time - this was in December 2017!!
The key features of the IfG plan are these:
- Recognises the unique starting point of convergence with the EU,and allows for a different approach to negotiation focused on designing a process to manage divergence.
- Three-tier approach to regulatory alignment, which would keep the UK aligned to EU rules in a core set of areas (‘core tier’) that would provide an enforceable level playing field for UK-EU trade, but it would give it the freedom to diverge in other areas.
- Robust institutions to manage divergence.
- Allows the future relationship to evolve over time under a managed process
The starting point of this model is that the UK is completely aligned with the rules of the Single Market and has complete access. The process it establishes is one that allows the UK to choose to diverge – but at the price of loss of market access if that divergence is shown to have significant impacts on the Single Market. The process would need to manage three routes to potential divergence.
It talks of a three tiered approach to regulatory alignment
‘Core tier’: areas of regulation where the UK continues to achieve the same goals as the EU and continues to meet them in the same ways.
‘Mid tier’: areas of regulation where the UK could diverge from EU rules to achieve the same regulatory goals or outcomes by different means.
‘Outer tier’: areas of regulation where the UK would be free to diverge from EU rules from the start with no consequences for market access.
Divergence would be managed through an expert-led process There would be a specific ‘test for regulatory parity’ defined by a committee independent of the EU and the UK. The two parties would have to notify each other of potential divergence and begin discussions on whether we are 'equivalent' or not and if so "address the consequences of divergence".
It says free movement and budgetary contributions would continue unless the UK decides to diverge.
I have no idea if (a) this or something like it is what the EU are considering and (b) if the UK government and the hard liners would accept anything close to it. My guess is probably not but it does have some attractions perhaps in that we get a gentle slope to roll down rather than a cliff edge.
Looking at it, it seems to me immensely complicated and a recipe for virtually continuous rows about whether we are equivalent or not so I'm not sure it's a good idea.
Sam Lowe at the Centre for European Reform, an expert in these matters who tweets a lot on Brexit, has said several times he can't see the point in the government taking the big economic hit immediately in January simply in case they might want to diverge from EU rules at some distant point in the future. But there is no logic in Brexit anyway is there?
The whole Brexit thing is designed to please a certain section of the population who are convinced the EU is responsible for all our ills. It may take a few years for that myth, perhaps the only genuine one of all the myths perpetrated about the EU, to be disproved and we can get back to becoming a member.
