Richard North, 18/09/2020  
 


I should think by now that everybody is bored silly by the posturing, plotting and pontificating over the EU-UK trade negotiations. There was a taste of that in yesterday's piece, but things don't get better.

Currently, the Financial Times is trying to put things together, having Commission President, Ursula von der Leyen, telling us that she was convinced a trade deal with the UK was still possible, despite the "distraction" of Johnson's UK Internal Market Bill.

She concedes that the Bill came as a "very unpleasant surprise" to the EU and it was now necessary for London to restore trust and remove the question mark it had put over the treaty. But, she says, the EU-UK talks should continue, with the dispute kept at arm's length.

This fits with the more general understanding (or view) that the EU intends to adopt a "keep calm and carry on" policy, not allowing Johnson's tactics to lead them to take their eyes off the ball.

This, it is a calm, emollient von der Leyen who says, "I am still convinced it [the trade deal] can be done". She adds: "It is better not to have this distraction questioning an existing international agreement that we have, but to focus on getting this deal done, this agreement done — and time is short".

This now seems to be firming up into a defined strategy, where – in medical terms – Johnson is treated as an abscess, encapsulated and confined, and not allowed to interfere with the main body of the talks.

These wonderful creatures, the anonymous EU diplomats, are therefore wheeled into position to say that the EU will not take decisions on whether to initiate legal action against the UK over the Internal Market Bill until after the next formal round of trade talks. These are scheduled to take place at the end of this month.

These same diplomats, apparently, are suggesting that the EU wants to channel the dispute over the Bill into the EU-UK Joint Committee, although this seems less than plausible, as there is hardly time for dispute settlement proceeding to take place.

However, on the Churchillian premise that jaw-jaw is better than war-war, if the UK could be prevailed upon to raise its concerns with the Joint Committee, then this would be progress, of a sort.

However, Maros Sefcovic, the EU's co-chair on the Joint Committee, has written to his UK counterpart, Michael Gove, formally in inform him of the EU's view that the bill would breach the Withdrawal Agreement, "if adopted as proposed".

In the letter, dated 11 September, Sefcovic has reiterated Brussels' call for the UK to withdraw from the Bill by the end of this month those measures that would override the treaty by the end of September.

The language, though, has been carefully chosen to give the UK room to back down. Brussels is thus not demanding that the legislation is scrapped in its entirety. Amendments would be sufficient.

For all that, there is no sign that Johnson is willing to make even the slightest of changes to the Bill, but if his idea was to get the EU throwing its toys out of the pram, then it's not working.

From our anonymous EU diplomat, we learn that the EU is determined not to "overreact". The negotiations are being conducted on two separate tracks: "one is the one which the UK has decided to violate, and the other is the future relationship".

It is also claimed that there has been some progress in last week's round of future relationship talks, despite the dispute over the Internal Market Bill, with some movement on "the vexed issue of access to British fishing waters". Whether that is real remains to be seen.

That apart, the stalemate continues, with EU officials noting that, while trade talks will continue, an agreement cannot be signed off until the dispute over the Bill is resolved. And if representatives of the European Parliament are to be believed, any deal would not be ratified.

All of this, though, is taking eyes off a quite different ball – the state of UK preparedness for the end of the transition period, with or without a trade deal. The Road Haulage Association, for instance, is complaining that a recent meeting with Michael Gove – he of the Joint Committee – on post-TransEnd arrangements – has been a "washout".

The Association says there as been "no clarity" from the senior minister on how border checks will operate when the transition period ends.

This comes after Logistics UK, formerly the Freight Transport Association, last Wednesday warned that businesses were facing a "massive blow" after discovering that the Government’s Smart Freight system would not be out of testing mode by January when British exports face new border regulations.

Of more recent concern is an impassioned plea from the British Meat Producer's Association, about the lack of preparation of the administrative systems needed to facilitate meat exports to EU Member States.

For a while, the focus has been on the EU's third country listing but, as I have pointed out, this is only the first part of a three-tier system. Now it transpires that even if the listing is in place, there are other major issues which need attention..

Firstly, there is the problem of Export Health Certificates, which will now be required for exports to EU Member States. Currently only required for third country exports, a massive increase in volume is expected, for which the government is proposing a new, online issue system. However, that system is still in the development stage and has not been stress tested to find out if it will work.

Then, before an Export Health Certificate can be issued for a consignment, it has to be inspected and signed off by an Official Veterinarian. Currently that work is only undertaken on a small number of large consignments, but after 31 December all meat exports will need to be inspected prior to dispatch.

This will require an army of new vets, trained for the work, when there are already too few vets and some of those will be drafted-in to administer millions of Covid-19 vaccinations along with pharmacists, dentists and student doctors.

Next in the litany of woes is the absence of agreed Health and ID Marks, which must be affixed to carcases and meat packages, before they can be sold in EU Member States. It may be that existing marks can be used, but the industry needs definitive confirmation.

Here, December is too late for this to be sorted. British meat companies risk losing orders from EU customers from September onwards. This is because orders, particularly from European retailers, are planned 3-4 months in advance to allow for pricing, barcoding and any promotions that need to go on the packaging.

Finally, there is an issue with "groupage" - mixed loads of products. As it stands, much of the meat exported is grouped together with other products, to make complete loads, reducing transport costs.

But the existing guidance from government on groupage only applies to pre-packed products destined for retail. It excludes fresh and frozen meat which accounts for a large proportion of the product British meat processors currently send to Europe.

The industry, therefore, needs assurance that a workable scheme will be in place which allows groupage and mixed loads to continue to be sent to the EU. Importantly, the industry needs advanced knowledge of the new arrangements so companies can adapt in good time.

It is the "nuts and bolt" issues such as these which are being neglected, many of which require the broader "big picture" agreements to be concluded before the details can be settled. And if customers are lost for want of such details being settled, they may never be regained.

And this is just one industry. Each sector has its own problems and concerns, largely ignored by a technically illiterate media, but they are not going to go away. Unless this government gets its act together – which hardly seems likely, given its track record – the shitstorm we are about to experience will make Covid look like a walk in the park.

Also published on Turbulent Times.






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