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British officials close to the Brexit negotiations had said Downing Street would be mindful of the “atmosphere” at last Friday’s EU summit when deciding next steps. It was, apparently, a sniff test. The leaders meeting in Brussels apparently failed.
The result was a kind of strike by the prime minister, which was only resolved once Michel Barnier, the EU’s chief negotiator, publicly acknowledged that British flexibility in the talks would have to be reciprocal. Negotiating resumed on Thursday.
Since then, Downing Street has talked a lot about a victory – the EU agreed to a 10-point plan on how things would work from now on. There would be daily conversations, a centralized legal text to work on, and chief negotiators or their deputies would be in contact every 24 hours to keep the focus on progress.
Perhaps he needed to sulk to get to that point, but the EU wants a deal and a pickup in the speed of the talks could have been expected.
What is clear is that Downing Street has always been very concerned about these environments. “How [Barnier] He made it clear, ‘any future agreement will be made with regard to the decision-making autonomy of the European Union and with respect to British sovereignty,’ “said the 10th spokesman.
The hope in Brussels is that background music is important to Downing Street, because the prime minister is ready to step out of his comfort zone. He was just baffled by the dominant public narrative that the UK had to be the one to concede. That narrative was not true. The bloc has dropped its initial demand that the UK follow Brussels’ state aid laws to begin with. But all that was some time ago. A corrective in the public conscience may have been necessary.
That’s fine. Bringing together and promoting complicated compromises to keep national electorates happy or blissfully unaware is what Brussels does.
What is more concerning, however, is that despite all the hoopla this week, the gaps between the parties remain significant and agreement in the end remains slim. Johnson’s Brexit deal will leave the UK £ 70bn worse off than if it had remained in the EU. GDP is expected to be 3.5% lower 10 years from now.
A no-deal result would inflict roughly twice that amount of damage, so there is certainly one big advantage Johnson must secure. But the external possibility remains, and it is largely an external possibility, of disaster if the EU side does not set the entirely correct price for its “zero fee, zero fee” deal. And for every issue, there are potentially destabilizing conflicts of principle to come.
Regarding the control of internal subsidies, the UK has started working with the EU on the rules to be included in the trade agreement that the state aid systems of both parties will have to respect. It is about striking the right balance, allowing diversion by the UK, and at the same time assuring the EU that there are means of compensation when trade is distorted.
But there is a thornier ideological principle at stake. The UK has said it will include in the deal a reference to the continued role of the competition and merger authority in maintaining fair trade. But he did not say that this body ex-ante approve internal grants. Such a body is essential for the EU. Yet it’s hard to imagine that a hard and fast set of rules, governed by a new part of the Whitehall bureaucracy, would be part of the hard-light vision of Johnson’s senior adviser Dominic Cummings.
When it comes to fishing, France advises its fishermen to prepare for the change and the UK is open to talking numbers. But there will be winners and losers. Again, there are some principled positions to grapple with.
Paris insists that the English Channel fishermen are in a different situation. They have been fishing in the waters of La Manche for centuries and nothing should change in their quotas. The UK is convinced that they will change and insists that it must be able to decide annually whether or not to grant access to foreign fishing fleets, a right that Norway already enjoys. While it would become a proforma decision, it would be disconcerting for European fishing communities.
Finally, there is the question of governance, which is as important as it is technical. The EU says it needs a system in which binding decisions can be made quickly on whether any party has violated the comprehensive free trade agreement. And there needs to be the power to hit the other side with a sanction in a part of the economy where it will hurt.
For the UK, this feels too close to being a partnership agreement, as the one that may be more suitable for a country looking to be involved in the EU sphere rather than away from it. A breach of property must be dealt with by a sanction within that chapter of the agreement.
It is complicated and it is legalistic. But we have had the theatricality, for better or for worse. The fate of the deal now lies squarely in the details and the negotiating room.
