Talks on a UK Japan trade deal are making good progress according to Liz Truss with the whole thing being settled by the end of August although the original intention was to have it all complete by July. This will apparently add 0.07% to UK GDP after a few years and as someone pointed out on Twitter we only have to negotiate another 70 of these and we will have made up for what we are losing by leaving the EU.
Ms Truss claims her deal is significantly better in some areas than the EU Japan deal agreed in 2019. Others are doubtful and think it may show that we are prepared to sign up to conditions that the EU would not. We shall see.
Positive negotiations with @moteging on 🇬🇧🇯🇵 trade deal.
Reached consensus on major elements of deal inc. ambitious provisions in digital, data and financial services that go significantly beyond EU-Japan deal.
Shared aim to reach formal agreement in principle by end August. pic.twitter.com/radOOVc8Be— Liz Truss (@trussliz) August 7, 2020
What I do think is that the Japanese will make more of the deal than British industry will.
In my experience of continental companies, I think the government has consistently over estimated Britain's manufacturing capability. All this talk of world-beating this and world leading that is all too often completely overblown. We talk the talk but usually stumble when walking the walk.
And while German industry seems downbeat according to this from Bloomberg: German Industry Says Brexit Talks Failure Is ‘Almost Inevitable’ I am certain there will be an agreement and, knowing the Germans as I do, they will quickly adapt to the new circumstances and they too will make more of the deal than we do.
"There are too many outstanding issues for them to be resolved in time and companies on both sides of the English Channel should 'prepare for bilateral trade without an agreement under WTO rules,' Joachim Lang, managing director of Germany’s BDI industry lobby, said in a statement Friday."
Apparently Lang says German industry does not expect the U.K. to complete the infrastructure for cross-border trade in time and believes companies "face the threat of new tariffs, additional bureaucracy and an economic disaster.”
"There are too many outstanding issues for them to be resolved in time and companies on both sides of the English Channel should 'prepare for bilateral trade without an agreement under WTO rules,' Joachim Lang, managing director of Germany’s BDI industry lobby, said in a statement Friday."
Apparently Lang says German industry does not expect the U.K. to complete the infrastructure for cross-border trade in time and believes companies "face the threat of new tariffs, additional bureaucracy and an economic disaster.”
This is too important and serious and it will never happen. Britain will capitulate - and very soon in my opinion as time runs out.
Charles Grant, director of the Centre for European Reform, and well connected in Brussels, thinks the key to unlocking a deal is for the UK to publish its proposals for a state aid scheme that might form the basis for an agreement with Brussels. He seems to think the LPF issues are virtually solved in this Twitter thread:
Having spoken to senior people in Brussels on #Brexit, a short thread. They expect the crunch in late Sep or Oct. For now they think @DavidGHFrost lacks a mandate to make the compromises that wd advance the talks. They think HMG divided on whether it wants a deal. @CER_EU /1— Charles Grant (@CER_Grant) August 6, 2020
Grant says, "Everyone knows what the LPF compromise will be: UK will promise not to lower standards, EU'll have right to punish UK if it does. EU side - even France - can envisage compromises on financial services equivalence & data adequacy (though recent ECJ ruling makes latter harder)"
This may well be a compromise although not much of one from the EU and given the ERG's thinking on the Withdrawal Agreement (needs scrapping and replacing) it has the potential to split the Tory party from top to bottom. The legal draftsmen will have some difficulty presenting that as a negotiating triumph but since Brexiteers don't read the small print, that's where it will be buried.
It will also be a permanent Sword of Damocles hanging over this country with no sector, be it agriculture of finance, ever sure what the next year will hold. At best we are going to be constantly negotiating with the EU whenever we (or they) introduce new rules and regulations. If our membership was slightly fractious the future will look like permanent guerilla warfare.
A few days ago, Matthew Lynn, writing in The Daily Telegraph, suggested Michel Barnier was the problem and to get a deal over the line, EU leaders should sack him. Lynn says Barnier has been "high-handed, patronising and provocative and thinks the Frenchman has been "a complete failure over three years." I think the piece actually demonstrates how successful he has been.
Anyway, Grant thinks the opposite is true and Barnier may actually be too flexible:
"A few EU governments, including France, have some concerns about @MichelBarnier. They say they are unsure of his strategy; and think he is so keen to strike a deal that he may be too willing to compromise with the UK. They have told him not to lean too far to the British. /ENDS"
If Brexiteers believe Barnier should be replaced by someone else, someone more malleable, I think they may be sadly disappointed.
