Friday 4 December 2020

The rollercoaster sets off

Yesterday was a rollercoaster. Mid-afternoon saw a surge of optimism with various leaks suggesting a deal was close and might be announced as early as today. Then, late in the evening, a setback with the British side claiming the EU were introducing new obstacles, something the EU denied. There was obviously a problem, and it seemed to revolve around how the LPF conditions were to be enforced and it now seems a deal will not be announced today.  Mujtaba Rahman tweeted:

There was some surprise on Twitter that at this late stage we were only at the point of agreeing "definition & bindng principles" and I think it is this sort of thing making some EU27 capitals uneasy with Barnier.

It should not be forgotten that every member state has a veto over the trade deal and if it's a mixed deal, then all national and regional parliaments will also have a veto. This is the moment of maximum leverage for both sides. If the UK leaves without a deal the threat of doing so again is defused. I am sure Frost and Johnson know this. 

By giving the impression that a no deal outcome doesn't worry them, the EU are upping the ante and daring the UK to walk away. If Johnson does not quit the talks, and I am quite sure he will not, it will encourage the other side to push a bit more.

Barnier is said to be returning to Brussels later today.

Macron personally led a high-level delegation to Boulogne-sur-mer in Brittany yesterday to show solidarity with the fishing community and reassure them he will not sell the fishermen out.  There are also noises coming out of some EU countries that a no deal outcome is preferable to signing a deal that gives Britain a permanent competitive advantage with the EU powerless to stop it.

The fact that Britain appears to have resisted even "binding principles" up until recently is itself cause for concern. Now a reluctance to commit to meaningful enforcement measures to ensure we do stick to them, will only fuel concerns that we are willing to forget what we have signed up to as soon as the ink is dry.

The British government might soon be regretting the clauses in the UKIM Bill that allowed them to break the WA. This comes back to the Commons on Monday and another bill, on taxation this time, which the Lords have less power to block, comes out on Wednesday. I see some commentators are suggesting that unless a deal is agree before that, the whole thing could blow up through a lack of trust.

Barnier has no wriggle room. He was reminded on Wednesday during a video conference with some MEPs and EU diplomats that he must stick to the mandate he was given. 

As others have pointed out, both sides seem now to be claiming that a breakdown of the talks may not be a bad thing and leaving without a deal is politically survivable.  Success or failure may depend on who believes their own rhetoric. I think it's clear which side is really prepared.

This tweet from trade expert David Henig may help to explain why we have got to this stage.

The UK side has apparently been negotiating under a misapprehension that the LPF conditions were somehow not important or mandatory for the EU. If so, I am surprised since it was always clear right from the beginning. This is from the EU mandate published in April 2017:

20. Any free trade agreement should be balanced, ambitious and wide-ranging. It cannot, however, amount to participation in the Single Market or parts thereof, as this would undermine its integrity and proper functioning. It must ensure a level playing field, notably in terms of competition and state aid, and in this regard encompass safeguards against unfair competitive advantages through, inter alia, tax, social, environmental and regulatory measures and practices.

And this from the political declaration that Johnson himself signed:

Given the Union and the United Kingdom's geographic proximity and economic interdependence, the future relationship must ensure open and fair competition, encompassing robust commitments to ensure a level playing field. The precise nature of commitments should be commensurate with the scope and depth of the future relationship and the economic connectedness of the Parties. These commitments should prevent distortions of trade and unfair competitive advantages. 

We are coming to the end of a circular process, having rejected membership of the EU with it's balance of rights and obligations, we have spent the last few months trying to negotiate back most if not all the rights and each time we find the EU restores the balance by demanding we meet obligations, too.

Instead of tilting the LPF in our favour we are finding because of the EU's superior strength and power, they are tilting it back against us. From next year we will be playing uphill. This is distinct from all the extra friction and paperwork to cross the border as well.

Now a few other things. First, Robert Shrimsley had a nice article in the FT recently about "betrayalism" and how the Tory Party always undermines its own leaders, something that Johnson helped to foment and benefitted from. Now it threatens him. This paragraph was key:

"From Brexit to Covid-19 lockdowns, the betrayalists’ defining conviction is that leaders let you down or sell you out. It sets them up to fail while preserving the purity of those untainted by the compromises demanded by political reality"

Backbenchers can demand all sorts of unrealistic stuff but when they get into the hot seat they find it all impossible to deliver. And if you take it further, journalists are even worse, They write columns which are from the realms of ignorance and fantasy. Johnson has been both backbencher and journalist but learned nothing from the experience. Whatever he agrees will be found to be a sell out, mark my words.

Next, I noted a tweet, almost certainly erroneous, but it is so delicious I couldn't help but post it:

And finally, a tweet from former Labour MEP Richard Corbett about recent queues of HGV's outside Calais waiting to cross into the UK:

I wonder if this isn't a sign of stockpiling?

It all points to a rocky end of 2020 and bad start to the New Year.

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