Saturday 21 September 2024

UK-EU relations reset

David Henig’s ECIPE (European Centre for International Political Economy) has published a report about the ‘reset’ in UK-EU relations being sought by Kier Starmer. It’s a comprehensive effort and puts into perspective the present state of things and the potential for improvement in the future. He points out that the trade relationship between the UK and the EU is the joint second largest in the world (US - EU being the biggest) alongside the US-Canada one and that simply by dint of geography alone something beyond the basic TCA is required and will almost certainly happen over time.

Henig pleads for both sides to recognise how vital the relationship is for Europe He calls for the EU to "stop treating the UK like any other neighbour" and for the UK to "move into the 2st century."  I fear this will take some time.

He talks about the origins of Brexit and how the momentous decision was made without a plan (or a clear destination) and how officials with a deep understanding of the ways in which the EU worked were excluded from the negotiations, I assume he had Sir Ivan Rogers in mind here.

It's an interesting 20-page report by a person with connections in Brussels and a wide knowledge of trade issues, so well worth a read. 

However, a couple of things stand out for me. In the conclusions, he mentions the Eurostar service:

"Prior to leaving the EU those trains contained many UK officials negotiating different topics with their counterparts from other Member States. What is too rarely considered is that many of the same issues still need to be discussed, but now from the point of view of a third country, neighbour, and significant trade partner. Every regulation adopted or amended by the EU has the potential to affect the UK, and one could argue there is now double the work as every UK measure could also affect trade likewise. Whether it is fishing, data, films, SPS regulations, financial services, Artificial Intelligence, or thousands more topics, crossing a modern regulatory economy with a large neighbourhood relationship inevitably means a huge amount of activity and mutual interest." (my emphasis)

I wonder if this point has been considered very much in this country, if at all. 

The EU is a natural and ever-present forum for common issues to be thrashed out between member states. A problem shared is a problem halved. Getting your national concerns onto the table early is also a powerful thing and helps to ensure Europe-wide policy pans out in your favour. We have lost all that.

When ministers and senior civil servants talk of anything impacting trade or any of the areas Henig lists, the starting point will always be: what is the EU doing on this issue? If we don't know, someone will be charged with finding out. 

Elsewhere in the report, he points to the "relative size and power" of the two sides which gave Brussels the upper hand in the withdrawal and trade talks. With 48% of our trade at stake, it was always pretty clear who held all the cards in 2017 and who holds all the cards now. Like geography, these are not issues which are likely to change in future

He says: "Any evolution of attitudes will take time, maybe years, and there must continue to be engagement in this time, given pressing issues. There is considerable room for improvement even without a full agreement of the context. What was previously a negotiation between a government without clear objectives and an EU with a rigid desire for order could usefully see flexibility on both sides in deepening relations. In the first instance, implementing a regular programme of summits supported by senior meetings can provide a shared sense of short-term direction, to be supported by regular dialogue between respective coordinating team

"Commentators and stakeholders have their part to play to support a much more informed public debate recognising a relationship evolving, but where progress is possible. Equally, we need to ditch the idea that this can all be fixed with the UK joining something like the Customs Union, Single Market, or the EU since all of these will be difficult and lengthy negotiations requiring strong political support which is not currently present on either side. For stakeholders, it also means focusing on the practical."

I am not sure Starmer has any 'clear objectives' even now and is just trying to 'get what he can.'

This is how you operate if you are a small company competing in the wake of a market leader. You need a constant weather eye on what they are doing in case you suddenly get wiped out with something unforeseen and unexpected.

Ministers won't be able to make any hard decisions on data handling, AI, food safety, financial regulation and a whole host of other matters without considering first what Brussels is planning. Move too quickly in the wrong direction and you risk damaging an entire industry. Delay things too long and you hand your competitor a big advantage. 

It's likely to be a problem for years to come, until the UK joins the EU again.