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Brexit hostilities are back. This time it is over . . . PowerPoint slides.
Late on Tuesday evening, the Downing Street press office tweeted a 2017 European Commission chart on the options for the UK’s future relationship, suggesting the EU was being disingenuous in previously offering a Canada-esque free trade agreement and demanding much more onerous commitments. “Michel Barnier, what’s changed?” Downing Street asked.
The answer is: nothing. Arguably it is Downing Street that is being disingenuous about what kind of trade deal can be struck with the bloc.
First, that Barnier slide was setting the options for access to the single market, not the overall trade deal. That is only one element of the agreement both sides will attempt to negotiate this year, and the slide shows what kind of relationship Brexit Britain will have with the single market.
Second, the EU has always been clear that the UK cannot be treated exactly the same as Canada because of geography. The size of its economy, its proximity to the bloc and the interconnectivity of economies means that a loose level-playing field of the sort in Canada’s free trade agreement will not be acceptable to the commission or member states. After all, one of the EU’s aims from the talks is to ensure it does not allow an economic threat to emerge on its doorstep.
To clarify this point, a new slide emerged from the commission on Wednesday showing where the UK is compared with Canada on trade intensity and geography. The big blob on the bottom left-hand corner representing Britain will underpin the EU’s arguments for ensuring fair competition clauses in any trade deal. Downing Street’s tweet and rhetoric suggests it rejects this argument.
It’s worth noting that the UK and the EU have notionally already agreed to firm commitments on a level playing field. The revised political declaration, which Boris Johnson signed up to in October, stated: “Given the Union and the United Kingdom’s geographic proximity and economic interdependence, the future relationship must ensure open and fair competition, encompassing robust commitments to ensure a level playing field.”
That document, which is non-binding but produced in good faith, said that both sides would seek “common high standards” on state aid, competition, social and employment standards, environment, climate change, and relevant tax matters. It explicitly said that the future relationship would need to include a “robust and comprehensive framework for competition and state aid control that prevents undue distortion of trade and competition.”
Has anything changed on the Brussels side? Some member states are pushing for even tougher provisions in a trade deal on a level playing field, which go further than the political declaration. Mr Barnier has also talked in the past about a “Canada plus” trade deal. That rhetoric was used by Theresa May’s government but has been dropped by her successor. Mr Johnson and his team say all they want is a “standard” Canada-style deal.
Why is Downing Street starting an argument on a matter that is already agreed? It could be that Mr Johnson’s thumping election majority has changed its stance and it wishes to renege on what was in the political declaration and go for a looser deal. If so, No 10 should say so.
Or it could be that the political declaration was signed in bad faith and the prime minister never intended to go along with it. Or that nothing has changed and No 10 will still sign up to those commitments — acting tough now to win favour among Mr Johnson’s Brexit-supporting base in the Tory party, before ultimately accepting some form of alignment they will not be unhappy with.
With the real negotiations commencing in two weeks, we won’t have long to see if the war of the slides turns into something bigger that could cause the whole trade talks to collapse.
Further reading
The compelling case to refocus the EU’s spending
“ . . . These negotiations are proving to be particularly fraught. The exit of the UK, one of the EU’s main net contributors, has left the remaining 27 member states with the task of filling an annual budget hole of about €10bn. At the same time, the spread of militant nationalism and anti-establishment populism in both western and eastern Europe has put mainstream, pro-EU political leaders and parties on the defensive.” (FT View)
The agricultural sector currently brings in around 70,000 workers each year for seasonal work such as fruit-picking © Reuters
Priti Patel dismisses concern over UK immigration reforms
Priti Patel, Britain’s home secretary, has insisted that any labour shortages could be filled by recruiting “economically inactive” people or through new routes for high-skilled migrants. (Robert Wright, FT)
Rising UK inflation reduces chance of interest rate cut. (Bethan Staton, FT
Hard numbers
Britain considers bringing China on board with HS2
Source: Economy - ft.com
