Once Britain’s Conservative government decided that Brexit also meant leaving the EU single market it was inevitable that trade between the two would fall. Outside the legal and regulatory order of the trade bloc, businesses on both sides of the channel would face checks and so higher costs when crossing the newly created trade border; in response, some buyers and sellers would inevitably curtail cross-border commerce. Customs data from France, Italy and Germany showing double-digit falls in trade volumes with the UK in January were probably made worse by coronavirus checks and unfamiliarity with the new rules. But they are a first taste of the new normal.
It was not inevitable, however, that the diplomatic relationship between Britain and the EU should deteriorate so quickly. The UK government made an understandable, if regrettable, choice that higher border frictions were a price worth paying for the freedom to chart its own course on regulation, migration and trade policy. Yet pursuing an apparent strategy of antagonising its nearest neighbour over issues both large, such as the treatment of Northern Ireland, and small — the status of the EU’s ambassador to London — has little upside.
Business groups complain that Lord David Frost, the UK minister responsible for relations with the EU, is too abrasive. Brussels officials are aware all politicians must be seen to fight for domestic interests. But an article in which Frost urged the EU to drop its “remaining ill will” and build a “friendly relationship between sovereign equals” sits uneasily with the decision to unilaterally extend grace periods for Northern Ireland to accustom itself to checks on goods moving across the Irish Sea. Though it might otherwise have been possible to negotiate an extension, EU nations on Tuesday night threw their weight behind Brussels’ plan to launch legal action against the UK over its unilateral move.
As the smaller partner, the UK’s relationship with the EU will always be unequal. For the UK, difficulties in the trade relationship can be existential; for the EU they are a mere annoyance. Eventually Britain should learn from Canada’s pragmatic approach to its much larger neighbour. Antagonism and mistrust make it easy for EU member states to unite even if some, such as Ireland, would agree that implementing the Northern Irish protocol needs to be made smoother. Defter diplomacy is called for.
The departure of former “Vote Leave” aides seems not to have lessened prime minister Boris Johnson’s belief in confrontation and brinkmanship. Downing Street thinks UK threats to leave the EU without a deal unlocked a withdrawal agreement, and preparations a year later to break international law over the Northern Irish protocol produced a trade accord. Neither reading is accurate. Both deals favour the EU, and distrust over the UK’s commitment to implementing what was agreed reduces the prospect of greater forbearance from Brussels.
The EU is far from blameless. It had to reverse a rushed decision in January that would have introduced checks on the Irish border to prevent vaccine shipments entering the UK. Its allegation that London had imposed an export ban on vaccines, amid rising tensions over supplies, led on Tuesday to furious UK denials. But December’s trade agreement should have been the foundation for a new UK-EU relationship. With controversies over the Brexit process out of the way, both sides could have found room to conclude add-on deals, for example on finance, that could offset the fall in trade. If the UK continues with its current approach, that agreement may instead prove a high water mark for relations.
Source: Economy - ft.com
