Thursday 3 September 2020

Barnier and the EU stand firm

Yesterday I joined a webinar arranged by the Institute of International and European Affairs (IIEA) in Dublin along with 1500 others across Europe and listened to Michel Barnier spend a good 90 minutes explaining where the current talks are and answering questions. This was just after one o'clock and followed PMQs. The contrast in performance between Johnson and Barnier could hardly be wider.

The EU chief negotiator was calm, measured and set out the EU position with clarity and logic and answered questions from the audience openly and with confidence. Bear in mind he was speaking in a foreign language too. It was his usual model performance.

You can see the whole thing HERE.

Did we learn much that was new? Not really, he didn't say anything that came as a surprise to me. What it showed was the determination on the EU side to stick to the mandate. He was asked specifically if he had sufficient flexibility or if he wanted his mandate changed and he was emphatic that he did not want or need any changes.

He began by saying everyone, everywhere had to prepare for Brexit. It will have "negative consequences, many negative consequences" but if we all "act responsibly we can contain some of the negative consequences."  The difference between the EU and the UK sides is that they can be honest about Brexit whereas we cannot.  This won't change until we get a new government.

He was asked if anything had changed after his meeting with Frost in London yesterday morning (39:24 in) and while he did not want to go into details, he said the EU has not seen any change in the UK's position and this was why he was "worried and disappointed."  He said if the UK does not 'move' on issues of importance to the EU it will "take on itself the risk of a no deal" exit.

Barnier said from the beginning Britain has refused to engage on "credible" terms for open and fair competition, which he said was the ONLY way to start a new relationship and it was in any case what Boris Johnson had agreed to in the political declaration. He drew our attention to the proximity of the UK and EU markets and the volume of trade and basically said a level playing field was the ONLY way to ensure there was no distortion on trade.

Next, he said we have shown no willingness to compromise on fishing matters and contrary to media reports, the UK position has not evolved.  No new legal text has been tabled by the UK.  He said Britain's position would not allow (for example) Irish fishermen to work waters they have fished in for years - even before Ireland and the UK joined the EU.

Thirdly, Britain has been "extremely reluctant" to include what he called "horizontal dispute settlement mechanisms" which is code for an over-arching agreement that allows each side to apply penalties in one area for alleged transgressions in another area, For example, the EU could apply defensive measures against the UK on financial services if we break the rules on fishing.

Although Barnier didn't say it, any reasonable observer must conclude that refusing to agree a level playing field or an over arching dispute settlement mechanism must be because we intend to diverge, to reduce standards in order to gain a competitive advantage and avoid serious punishment. That is the only conclusion you can draw isn't it?

He repeated that all the EU is trying to achieve is the translation of the political declaration into a legal text.  It must be terribly frustrating and he said the EU side continues to "disappoint."

The EU negotiator poured scorn on the idea that the EU just wanted a sinple FTA or a clean break and said the UK was seeking to retain many of the advantages of EU membership - in other words we want to have our cake and eat it, Johnson being famously pro-cake and pro-eating it.

As a for instance he said UK proposals on Rules of Origin would allow the UK to become an "assembly 'ub" for the EU, allowing British companies to source parts from around the world and to sell then to the EU with very little alteration as British goods, tariff and quota free.  Truckers from the UK would be able to drive on EU roads without complying with EU rules, the same with British airlines in EU airspace.

On energy, we want our electricity suppliers to have access to the EU market via the undersea inter connectors without committing to the same level of carbon pricing.  I assume there are other areas too.

One can see none of this would ever work and the EU will never agree to it.

While we regard the single market in purely mercantile terms, the EU see millions of people in thousands of communities being exposed to unfair competition, losing jobs because of it and being decimated.

In free trade agreements job losses are unavoidable. That is why they are so politically sensitive. To expose a weak sector in your own country will lose jobs. But sectors where you are strong will gain and jobs will be added. Over time both sides see a benefit but with serious short term pain.  But the problem is easier to explain politically and to manage if the playing field is a level one.

Competing fairly, by innovation and efficiency, is what drives wealth creation. To do it by allowing one side to cut labour, welfare or environmental standards is only a recipe for argument stretching on until the playing field is levelled again.

I must say it was a pleasure to listen to Barnier give a master class in presenting a clear case for sticking to common rules. There was no sign of any 'give' on his side on these important issues.