Brexit Reversal or Tough Talks?
European Union President Donald Tusk wants Britain to know that the EU’s “hearts are still open to you,” repeating his sentiment that it isn’t too late to reverse Brexit. Speaking before the European parliamentary plenary in Strasbourg, France today, Tusk concluded his remarks on Brexit, by saying: “Wasn’t it David Davis himself who said: If a democracy cannot change its mind, it ceases to be a democracy?”
Tusk’s statement about the UK being welcome to stay in the EU was reaffirmed by other MEPs at the debate, who also repeated Tusk’s statement that the EU wants to hear more about the UK’s vision for its future relationship with the Eurozone. This was simply an echo of what Chancellor Philip Hammond had said the UK wanted from Europe, when he was lobbying for support in Germany.
Naturally, prior to any negotiation, both sides want a glance at the cards that will be later be hidden across the table. While the EU president’s tone was reconciliatory, he also noted the negative consequences Britain faces by not reversing the decision to leave the EU. “If the UK government sticks to its decision to leave, Brexit will become a reality—with all its negative consequences—in March next year,” he said.
Biggest challenge since the war
Ministers are frantically hiring in preparation for the looming complex Brexit negotiations on the transition period. So, perhaps it’s good that recently leaked documents reveal the prime minister is up against a tough transition and trade stance from EU. Isn’t it better to go into battle knowing more about your opponent’s cunning plan?
Yesterday, we heard that Brexit is the most difficult challenge the civil service has faced since WWII. It’s a challenge that requires hiring an extra 3,000 civil servants, with an undetermined more needed, depending on what type of Brexit the UK ends up with. Cabinet secretary Sir Jeremy Heywood told the Commons public administration committee that “a large chunk of the challenge” is still ahead, assuring them that, although he’s facing a difficult task, he’s “on it.”
Of course, the government is preparing strategies that are the UK government’s best responses to what they guess the EU’s positions are. The government is not able to demand a certain deal, such a not paying a divorce bill, or insist on any conditions, as we found out in the first round of talks. Is the person in Brussels who is leaking this information to The Guardian trying to provide the UK negotiations team with a preview of exactly what the EU’s red lines are going to be to help facilitate the next phase of talks?
Tougher transition deal
The Guardian has seen the EU’s newest negotiating draft guidelines, which show the EU will demand that the rights of free movement and inclusion of people from Europe coming to the UK continues until 31 December 2020 in any agreement to be made on citizen’s rights.
Theresa May had wanted the conclusion of the agreement on citizens to include only those who came to the UK before she triggered article 50 on 29 March 2017, but she is expected to yield to the EU on free movement in order to prioritise later trade deals. May also wanted to settle the terms of a transition deal by March, pressing on to trade talks. The EU is not willing to commit to this, with an EU official saying they felt cautiously hopeful of reaching a transition agreement in “the first half of the year—if we don’t run into substantive difficulties.” And, the European parliament stressed that “The UK government should not take a Brexit transition deal for granted.”
The tone of these statements underscores the argument that Theresa May should not have triggered article 50 until after she had negotiated the basic structure of the trade deal. The EU had said they were unwilling to any pre-negotiations, but that was simply political pressure employed to their advantage. The minute the prime minister pulled the trigger on article 50, the clock has been racing and the EU has been unwilling to be hurried along to suit the UK’s desired timelines.
Now, there is the spectre of no deal by the negotiation deadline of March 2019—or a keen possibility that, as in the leaked transition scenario EU envisages—a Brexit deal that bears no resemblance to the fundamental reasons people voted for Brexit. Clearly, much of what the EU will insist on is designed only to suit the EU27, which puts the government in the weak position of accepting less than we have at present.
No way, says Norway
Norway is keenly following any progress the UK makes on securing trade deals to make certain the deal isn’t “overly favourable.” Norway’s Eurosceptic Centre Party doubled its vote last year, indicating the strengthening support for pulling the country out of the European Economic Area and renegotiating trade deals. Norway doesn’t have a vote in Brussels, but the country does financially contribute more per capita to the EU than the UK does and it also accepts the principle of free movement which gives them free access to the single market.
If the UK negotiates a generous deal with the EU, officials in Oslo have warned that they will renegotiate their own trade agreements with the Eurozone. One of EU’s concerns is that Norway will become more determined in discussions about access to seas and quota sizes after the UK leaves the common fisheries policy and tri-lateral negotiations. This makes it very unlikely the UK can hope that certain sectors can retain access to the single market, unless, perhaps, more financial contributions are made and the UK accepts the free movement principle. So much for the extra £438m the UK would gross weekly after Brexit, according to foreign secretary, Boris Johnson’s most recent and highly disputed, calculation.
Stop complaining, London
The UK has ideas about creating a unique post-Brexit relationship with Europe, however, the EU has the upper hand and appears determined to let the UK know that, in this next round, it will simply swat these British trade relationship ideas away. Manfred Weber, the leader of the European People’s party in the European parliament said: “My message to London is please stop complaining, please deliver. Give us an outlook about what you want to achieve for the future relationships.”
Actually, the UK made their trade goals crystal clear when Olly Robbins, Theresa May’s Brexit advisor, recently suggested at a cabinet meeting that, after Brexit, the UK could work on three different levels of regulation with the EU. Certain sectors could be utterly free of EU regulation while others, such as financial sectors, would be fully converged, permitting frictionless trade. He noted a third number of sectors would achieve the same outcomes “through different means.”
A senior EU official told The Guardian that this is what they had “always” expected the UK would want, “and that’s why we have been quite clear that we don’t think that is on.” So, we know the EU won’t agree to that and we also know that the UK crashing out without a deal will be very costly for all concerned. According to consultancy Oxford Economics, a no-deal Brexit would cost the EU27 €112bn by 2020. The UK would fare even worse, with a loss of £125bn over the same period of time if it became necessary to fall back to World Trade Organisation rules. Given this reality, the UK cannot hope to use a threat of no-deal to strike a better agreement. You simply have to cross your fingers for the best deal possible, unless you harbour some hope for another election, a Brexit reversal and a big welcome back hug from Donald Tusk.