Wednesday 5 February 2020

Looking ahead

Johnson's address on Monday got a bit of a battering on social media yesterday. Not surprising since it really was a ridiculous 'speech' for any politician to make, let alone a prime minister. It was more akin to the kind of thing delivered by a fired-up management guru or someone behind one of those get-rich-quick ponzi schemes. You come out thinking everything is great but as soon as you get back to the street you begin to see it was all nonsense.

A few tweets about it:
Yes, it really was that bad.

Norbert Röttgen, a member of the German Bundestag and former minister in Merkel's government was interviewed on Channel 4 on Monday night and said something quite intriguing about the coming trade talks. He thinks there will be some common ground between the level playing field conditions demanded by the EU and Brexit Johnson's own red line about not following EU rules and regulations. He does not believe the two things are as incompatible as some think.

And to be clear, several people made the point that LPF and regulatory alignment are not the same thing.  LPF is about environmental. employment and state aid rules.

Given enough time I suppose it is conceivable that the two negotiating teams might be able to agree a legal text which satisfies both sides. The EU could be persuaded that Britain won't go full Singapore on Thames and Brexit Johnson could be similarly persuaded that we aren't going to be locked in to the EUs regulatory orbit.

The problem will be the time and on the EU side, the lack of trust in Johnson. He has done himself no favours by his rapid switching of positions and apparent resiling from agreements already reached - the Irish sea border being the most obvious example.

In questions after his speech he denied that leaving the EU without a deal would cost jobs, something the nobody who actually understands these matter believes. 

To give us a clue about Johnson's 'strategy' what about this tit-bit from Tom Newton-Dunn at The Sun?

It's possible Johnson's speech on Monday was part of this plan to make the EU think he is actually mad, mad enough to actually leave without a deal. Who knows?  It won't work though. The EU know that no one in the British government, for all the brave talk, is willing to do the unthinkable.

Polling

UK in a Changing Europe published a report yesterday: Brexit, what comes next? Professor John Curtice has a couple of pages in it (46 and 47) about the public's attitude to free trade with Europe. It appears ordinary people are perfectly happy with three of the four freedoms (goods, services and capital) but not the fourth (people). Curtice says support for a close relationship, always pretty high is still rising, while opposition to the free movement of people is falling (74% in 2016 to 58% at the last election).

The government, assuming it persists with the "we don't need a trade deal" attitude is going to find itself on the opposite side of the argument to business and most of the electorate. It would not be a popular thing to do.  Curtice says:

"Throughout the Brexit process, never have less than 86 per cent said they were in favour of ‘allowing companies based in the EU to sell goods and services freely in Britain in return for allowing British companies to sell goods and services freely in the EU’.

"In the autumn of 2016, not long after the EU referendum, nearly three-quarters (74 per cent) of all voters – including nearly two-thirds (62 per cent) of those who voted Remain – said they were in favour of ‘requiring people from the EU who want to come to live here to apply to do so in the same way as people from outside the EU’. In contrast, during the recent election campaign the figure stood at a little under three-fifths (58 per cent), though even among those who voted Remain, supporters still outnumber opponents."

Public opinion is definitely moving our way.

EU Commission Q & A

The EU Commission released a Q & A document yesterday, answering some of most obvious questions about the forthcoming talks.  As usual it is a model of transparency. Our own government looks totally incompetent, secretive and devious but that's par for the course isn't it?

Note these points:

Have you agreed with the United Kingdom yet about practical arrangements for the negotiations, such as language regime?

Practical issues, such as language regime and negotiation structure, will be agreed jointly between the EU and UK negotiators.

 Look well if the EU insist on some or most of the talks being conducted in French.

Will the new partnership be an ‘association agreement' and how will such an agreement be ratified?

Whether the future partnership must be ratified by national parliaments depends on its final content and can only be determined at the end of the negotiations.

If the talks get into any areas which could turn it into a mixed agreement there is zero chance of it being ready by December 31st.

What is the purpose of the High-Level Conference between the EU and the UK in June 2020?

The High-Level Conference in June, as foreseen by the Withdrawal Agreement, aims to take stock of the progress in negotiations. The Commission will also use the Conference to take stock of the state of implementation of the Withdrawal Agreement, in particular when it comes to citizens' rights and the Protocol on Ireland and Northern Ireland.

What does “level playing-field” mean?

The EU is ready to offer a high-ambition trade deal, with zero tariffs and zero quotas on all goods entering our single market of 450 million people. However, because of our high levels of economic inter-connectedness, the value of trade and geographical proximity, the draft negotiating directives also make clear that this exceptional offer is conditional on robust level playing field safeguards to avoid unfair competitive advantages the UK could derive from regulatory divergence (lowering of standards) or subsidisation of UK operators. In the Political Declaration, the EU and the UK already agreed that they would avoid unfair competitive advantages. We must now agree on effective assurances to guarantee high standards on social, environmental, tax and state aid matters.

What if the UK will not commit to any level playing field guarantees?

We agreed in the Political Declaration that the scope and depth of the future relationship will depend on the level playing field commitments that the UK is willing to undertake. The EU will not agree on an FTA without solid level playing field guarantees and an agreement on fisheries. Our geographic proximity and economic interconnectedness are such that it is in our mutual interest to agree on fair competition standards between us, as well as on their effective enforcement. Given the current very close integration of British companies with the Single Market and the UK's desire for zero tariffs and zero quotas for goods, it is only fair that the EU requires commensurately strong level playing field guarantees. This will also be in the interest of British consumers and businesses. The EU is by far the greatest export market for UK businesses and most UK imports are from the EU

Will the EU allow for mutual recognition of rules and standards?

By choosing to leave the Single Market, the UK has opted to have the status of a third country regarding EU law. The EU and UK will therefore form separate markets and distinct legal orders, after the end of the transition period. The future relationship will therefore result in a lower level of integration than is the case today. The future economic partnership on goods will seek to facilitate trade as far as possible but this cannot be expected to replicate the same frictionless conditions of trade that exist between EU Member States. Such conditions are based on adherence, by Member States, to a full ‘ecosystem' of rules, including the Treaties, and their supervision and enforcement, including the jurisdictional system under the Court of Justice of the EU. Mutual recognition can only be granted between participants to that ecosystem.

I see a few arguments developing quite soon. Arguments that we will not win.
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