Tuesday 20 October 2020

Stand-off in the trade talks

Johnson is playing a dangerous game which is bound to end badly. After the weekends demand from Lord Frost that Michel Barnier needn't bother coming over unless he was prepared to discuss legal text on all subjects and compromise, he tweeted (below) a message confirming he and his team are ready to travel to London this week. It seemed to me a reasonable message  - but crucially he did not mention compromise. Legal text OK, all subjects OK too, but compromise?  Nothing.

Here is the tweet:

David (Lord) Frost later rejected it with his own tweet:

I do not believe the EU has ever been treated like that by another country, let alone a mere special adviser - Frost is neither politician or civil servant. We have had no response yet but I am sure it will have been seen by all the EU27 capitals and a lot of thought will be given to the next crucial step. Frost seems to be asking for nothing less than a surrender document in what looks like diplomacy by Twitter.

The EU has a choice now. Give in and meekly confirm they (or perhaps both parties) need to compromise. Do nothing, at least for a few days and let Frost stew.  Double down and repeat that it is for us to compromise. Or call off the talks altogether.

I don't believe it will be the latter. They may just wait and see.  But I do not expect a soft response. Someone tweeted that the EU has finally twigged that the UK wants no deal and also wants to blame it all on the EU. Politically, it sounds attractive doesn't it?  Britain alone as in 1940, battling against a brutal continental regime and asking for sacrifices from us all - belt tightening, digging for victory, rationing and so on.

If that is the calculation I think it's a huge mistake.  I have always maintained there will be a deal. Johnson, Cummings and Gove cannot afford to let the population have a taste of no deal or see for themselves the lack of government preparation. Support for Brexit is falling among leavers already, according to an article in the FT (behind a paywall but the gist is in this tweet):

Brexit is about retaining the benefits of the single market while being outside it and free to do whatever Britain likes. This is and always was impossible. The UK government has cleverly controlled the narrative that we are only asking for what the EU gave Canada. It's a simple message that people can understand - but as I posted yesterday it isn't true. We want the benefits of membership in many areas, something the EU cannot under any circumstances concede.

Apart from the UK demanding the impossible, what we are seeing is the problem of negotiating a trade deal against the clock. Each side is holding back on making any concession on issues vital to them and are now concerned they will find themselves at the last minute having to decide to walk away or swallow something very unpleasant. It was always destined to end in acrimony.

Joe Mayes at Bloomberg has a report which makes interesting reading. He has spoken to some EU officials who seem to think all we want is a fig leaf:

"EU officials are paying particular attention to Frost’s comment that the bloc 'needs to make clear' it has moved. That could mean an EU leader, or senior official, giving a public statement to make it look like the bloc is conceding, drafting new texts, or emphasizing that the two sides are sovereign equals, they said."

I read somewhere that a government spokesman has said if the talks breakdown the EU is not to expect the UK to return to the table in the New Year - but it may be necessary for the EU to test that. Also I read that Macron is prepared to cut us off from the EU energy market which is worth five times what the fishing industry in the UK earns.  We sell billions of pounds each year when we have an excess of power but overall import 5 per cent of our needs. It would be a double whammy.

Yesterdays provocative text by Frost has not helped matters. We are like a Jack Russel making a lot of noise and antagonising the neighbour's Rottweiler.   You know who is going to win in the end.