As far as I can tell this morning nobody outside of the tunnel has any idea what's going on inside it, although as ever with Brexit there is no shortage of speculation. The deadlines - which started last October if you remember - keep being pushed back and the balance of opinion seems to be that this one will be too. The Finnish PM said “I think there is no time in a practical or legal way to find an agreement before the EU Council meeting. We need more time.”
I suspect that's what will happen. Neither side wants to collapse the talks and take the blame and a delay seems inevitable - there is no way a legally operable text is going to come out of these present talks by tomorrow night. By common consent these are very complex issues and should be considered carefully not cobbled together and rushed through at the last minute.
To understand the difficulties faced by our negotiators we might go back to the statement made by M Barnier to the EU parliament last Wednesday when he first outlined the problems with new British proposals. He said there were three major problems - to differentiate I assume from a host of minor ones. They look pretty insoluble to me.
Our customs proposals, according to Barnier, required:
- Exemptions and derogations from the Union Customs Code,
- Technology which remains to be developed,
- Changes to international law under the Common Transit Convention,
- A new system of compliance, without the guarantees included in the Protocol.
They do not look to me like easily resolvable technicalities. The next issue was our plan "to remove this safety net [the backstop] and find alternative solutions during the transition period, i.e. later, the UK's proposal does not provide the same security as the backstop.
"An example : there is no real solution in the UK's proposal for small and medium-size enterprises (SMEs), except for proposing a general derogation.
"Second example: what would happen if the Joint Committee – the place where the UK wants to send all unanswered questions for the moment – cannot find an agreement during the transition? According to the UK, the solution would then depend on unilateral measures to be taken by the UK and the EU.
"There would be a significant risk for the integrity of the Single Market, because the UK's proposals would commit us to never having checks at the border between Ireland and Northern Ireland, which become two different jurisdictions."
In other words we just want to muddle on and find solutions later, during the transition period, if and when they become necessary. Do not forget that Johnson has already said he will not extend the transition period either. This ends on December 31st 2020, so we have barely 12 months to agree what will probably be the most difficult trade deal of all time and at the same time, resolve any problems that arise on the Irish border. The EU have not even developed a mandate for trade talks yet - a process which will itself take months.
I suspect when Northern Irish businesses and businesses in Britain with whom they trade see the massive bureaucratic hoops and the mountains of red tape being proposed to track goods of all kinds shipped to the province they will not be happy.
Next, is the problem of consent in NI:
"But today, the UK's proposition consists of making the application of the Protocol conditional on a unilateral decision by the Northern Irish institutions to decide:
"Today, Mr. Johnson has asked us to focus our future economic relationship only on a basic free trade deal, and not on the other options that we left open in the Political Declaration. He has asked us to remove the reference to a level playing field – a very important point –, which we agreed with Theresa May. These are the ground rules, a foundation of rules in the area of tax, state aid, social rights, environmental rights and consumer rights.
"And therefore, we are faced with this request for a basic free trade deal, which runs the risk of regulatory competition, even fiscal, social or environmental dumping. We will not accept this.
"That is why I have said that the ambition and level of our future free trade agreement with the UK will be proportional to the level of long-lasting commitments taken by the UK authorities regarding common ground rules."
In other words we just want to muddle on and find solutions later, during the transition period, if and when they become necessary. Do not forget that Johnson has already said he will not extend the transition period either. This ends on December 31st 2020, so we have barely 12 months to agree what will probably be the most difficult trade deal of all time and at the same time, resolve any problems that arise on the Irish border. The EU have not even developed a mandate for trade talks yet - a process which will itself take months.
I suspect when Northern Irish businesses and businesses in Britain with whom they trade see the massive bureaucratic hoops and the mountains of red tape being proposed to track goods of all kinds shipped to the province they will not be happy.
Next, is the problem of consent in NI:
"But today, the UK's proposition consists of making the application of the Protocol conditional on a unilateral decision by the Northern Irish institutions to decide:
- From the beginning, from the day after the ratification of the Withdrawal Agreement, not to activate the proposed solution for Northern Ireland.
- And, if the Protocol entered into force, this solution would be brought into question again every four years.
We want the new protocol, from day one, to be dependent on the approval of a Stormont assembly that hasn't sat for two and a half years.
But perhaps the biggest problem, which will impact present EU thinking as well as future trade talks, is the change Johnson wants to the political declaration. Listen to this:
"Today, Mr. Johnson has asked us to focus our future economic relationship only on a basic free trade deal, and not on the other options that we left open in the Political Declaration. He has asked us to remove the reference to a level playing field – a very important point –, which we agreed with Theresa May. These are the ground rules, a foundation of rules in the area of tax, state aid, social rights, environmental rights and consumer rights.
"And therefore, we are faced with this request for a basic free trade deal, which runs the risk of regulatory competition, even fiscal, social or environmental dumping. We will not accept this.
"That is why I have said that the ambition and level of our future free trade agreement with the UK will be proportional to the level of long-lasting commitments taken by the UK authorities regarding common ground rules."
If we don't accept the EU's common ground rules, something that five core industry trade bodies said last week was vital to retain manufacturing competitiveness, we may well not get a trade deal at all.
In any case, if a Withdrawal Agreement is settled in the next few days or weeks, industry faces another year of uncertainty and will not know what the terms of trade with their biggest export market will be as of January 1st 2021.
Parliament will be crucial in the next two weeks. There are all sorts of possibilities and the opposition shouldn't forget they have a 43 seat majority at the moment. Johnson is their hostage and a second referendum should be possible IF they work together. A big IF I know. We can only pray.
In any case, if a Withdrawal Agreement is settled in the next few days or weeks, industry faces another year of uncertainty and will not know what the terms of trade with their biggest export market will be as of January 1st 2021.
Parliament will be crucial in the next two weeks. There are all sorts of possibilities and the opposition shouldn't forget they have a 43 seat majority at the moment. Johnson is their hostage and a second referendum should be possible IF they work together. A big IF I know. We can only pray.
