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Movie franchises do not, as a rule, get better with each additional film. Police Academy did not. And there is little reason to expect more from Brexit: A New Dawn than we got from the original Brexit and the sequel Brexit: The Return.
For seasoned Brexit watchers, the speeches and presentations that this week kicked off the next phase of relationship talks between the UK and the EU really did feel like a movie we have seen before. There was lofty rhetoric about free trade and sovereignty from UK prime minister Boris Johnson. There were consistent reiterations of long-stated principles and their consequences from the EU. There were no big surprises in the details of either Johnson’s speech or his more useful written statement to parliament, or of the European Commission’s rather more elaborate proposal for a negotiation mandate. The UK wants as much autonomy as possible, while maintaining tariff- and quota-free trade. The EU is willing to offer zero tariffs and zero quotas if it can be legally assured of “zero dumping” (unfairly undercutting EU companies with subsidies or lax environmental or social rules).
The question other Europeans mostly wanted to be answered by Johnson’s speech was whether he would choose rhetoric to make the talks harder or easier politically. They will not have been impressed by his flamboyance, which was the opposite of the strategy of making the talks as technical, pragmatic and boring as possible. But to judge what is behind the defiant facade, it is worth looking back at the two previous iterations of British tough talk.
The first was Theresa May’s Lancaster House speech, where she drew up the red lines of leaving the EU’s single market and customs union. In the end, she signed a provisional customs union, and aimed to permanently align with EU rules on goods production.
The second was Johnson’s approach to the withdrawal agreement, specifically the arrangements for Northern Ireland (on other withdrawal issues, he adopted May’s deal without any change). That drama ended with him turning the maligned “backstop” into the permanent regime, putting the UK-EU economic border down the Irish Sea as the default rather than the fallback if no other way could be found to avoid border checks on the island of Ireland. In other words, he surrendered while declaring victory.
If in doubt about what someone will do next, take their past actions as a guide. That rule suggests that this time, too, Johnson will do something quite different from what he seems to be saying, and ultimately accept the EU’s “zero dumping” terms for a zero-tariff, zero-quota trade agreement.
The rhetorical bluster certainly fits the pattern of the previous episodes. Johnson’s new talking point that the UK could settle for an Australia-style relationship, which means no free trade agreement at all, is just a paraphrase of May’s “no deal is better than a bad deal”. And don’t forget the aggressive talk in the days before the secret Anglo-Irish summit in October, which we predicted then was designed to camouflage the volte-face about to be made.
What would be the motivation for this? The same as the previous two times: the reality of the economic cost for successful UK businesses of a serious rupture with the EU market — and, above all, the political cost of even a temporary impression in broad public opinion that the government is economically incompetent.
If our expectation is right, how will the manoeuvre be carried out this time? Again, take a leaf from the Northern Ireland solution, which turned on the region staying de jure inside the UK customs territory but de facto in the EU’s. Expect similar de jure solutions that let Johnson claim the agreement satisfies his demands that the UK be a “sovereign equal” whose autonomy is not constrained by EU law or courts — even as, de facto, the EU gets its way on “zero dumping” and stable fishing quotas. Trade expert Dmitry Grozoubinski and my colleague Chris Giles have both taken a good look at how a deal can be reached.
I would point to the governance discussion — what sort of structure is set up to manage the relationships and any disagreements down the line — as a crucial part of the solution. A lot of alignment can be hidden from plain view (which matters to the UK side) but nonetheless be legally watertight if the governance structure is set up right. That is why the EU will insist on a joint committee — the structure that has worked to keep European Free Trade Association states in the European Economic Area aligned with the single market. One such committee is already included in the withdrawal agreement and needs to be up and running soon — how successful that is seen to be will be very important for how the bigger talks develop. As you follow the new Brexit talks, keep an eye on both: the governance aspect of the current negotiations, and the functioning of the already agreed joint committee in practice.
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Source: Economy - ft.com
