Brexit: the price we pay

14/10/2020

Yesterday was a crucial day in the ongoing saga of the EU-UK talks, with the meeting of the General Affairs Council in preparation for Thursday's European Council.

As expected, Michel Barnier, informed ministers of the state of play of the negotiations, the implementation of the Withdrawal Agreement and the EU's readiness efforts. In turn, the Ministers went through the ritual of reaffirming their support for Barnier and his mandate, and expressing "their trust that further progress can be achieved".

The official communiqué also stresses that the EU "remains committed" to concluding an ambitious agreement for the future relations. Nevertheless, the Ministers underlined the need for businesses and countries to prepare for all scenarios.

Statements and private briefings then make up the bulk of agency copy, which has the EU demanding "substantive" movement from Britain on "fisheries, dispute settlement and guarantees of fair competition".

In other words, we're looking at the same old, same old, with no discernible movement, spiced up by Germany saying the talks are at a "critical stage", while France is calling for the EU to hold fast on fishing rights. Ireland, meanwhile, comes up with a statement of the bleedin' obvious, saying that Britain is "running out of time" to seal the terms of a deal.

The European affairs minister of Germany - current holder of the EU's rotating presidency – says the EU is ready if necessary to trade from 2021 without an agreement, confirming our general understanding of the state of play, that, "In terms of substance we have not really made progress".

The corollary of that, of course, is that for a deal to be concluded, "substantial progress" must be made in the key areas. But Johnson's spokesman is offering nothing of that substance, simply reiterating Britain's stance that it wants a deal "on the right terms", with the usual issue-illiterate mouthing that, "... if we can't get there we are ready and willing to move forward with an Australian-style outcome which holds no fear".

Several EU ministers stated their governments had stepped up planning for the possibility a deal may not be found, the Irish Times reports, having France's European affairs minister, Clément Beaune, saying the cabinet had met to discuss the matter. "As things currently stand, the hypothesis of a 'no deal' is a very real one, and also one that is unfortunately very likely today", he says. "We know the British skill in tactics . . . but today is not the time for tactics. We have finished playing, we are coming to the end of the game", adding: "We are prepared for all eventualities".

Barnier, it appears, was also forthright, mocking the fatuous Johnson for issuing a "third unilateral deadline". He noted that Johnson had twice previously suggested that the UK needed the certainty of a deal by a specific date, only to later backtrack. "It is the third unilateral deadline that Johnson has imposed without agreement", Barnier was said to have remarked. "We still have time".

With 48 hours remaining before the European Council, for which Johnson has demanded a "breakthrough moment", a laid-back Barnier observes that a deal is “very difficult but still possible". Putting a damper on UK expectations, he says that there is "little prospect" of the two sides entering a decisive "tunnel" negotiation.

Responding specifically to Barnier, a UK government source complains that, "The EU have been using the old playbook in which they thought running down the clock would work against the UK". They have assumed, the source adds, "that the UK would be more willing to compromise the longer the process ran, but in fact all these tactics have achieved is to get us to the middle of October with lots of work that could have been done left undone".

He concludes: "This is all the more frustrating because it is clear that we have come a long way since the beginning of the year. We have approached the negotiations constructively and reasonably but time is now extraordinarily short. We need the EU to urgently up the pace and inject some creativity".

That the UK is expecting the EU to make the moves has been the story of these negotiations, right from the point when Mrs May sent the Article 50 letter in March 2017, triggering the withdrawal negotiations. And another feature of the talks has been the constant attempts by the EU to by-pass Barnier.

Another of those attempts seems to be in hand, with Johnson planning to meet Ursula von der Leyen today, in what is described as a "crunch meeting". However, von der Leyen is unlikely to allow Johnson to undermine Barnier, or step outside his mandate, so there is little that can come of this meeting.

Meanwhile, back in the UK, there has been an ungainly little spat, with Treasury and Cabinet Office Minister Lord Agnew accusing businesses of taking a "head in the sand approach" when preparing for trade once the transition period has ended. He says that traders "really must engage in a more energetic way" to be ready for 31 December.

"Ultimately, the government can only do so much", he said. "If businesses haven’t engaged in the process and understood the processes from 1 January, that has to be their responsibility".

This provoked angry reactions from business associations, which said that they have been seeking clarity on border process and IT systems for months, many of which are still not in place.

"A 'head in the sand approach by traders'? That'll go down well", said Tim Rycroft, chief operating officer of the Food and Drink Federation, in a sarcastic response posted on Twitter.

Labour peer Stewart Wood, a member of the Lords' EU committee, said Agnew had provided a "spectacularly unfair characterisation" of business preparations, noting that many had been "pleading for guidance, clarity and timelines for months".

However, the criticism is not entirely without merit. Alex Chisholm, permanent secretary of the Cabinet Office, told MPs last week that about one-third of businesses still believed there would be an extension to the transition period, and were thus holding off making any preparations.

Nevertheless, that does not gainsay the point that, for many issues, there are many areas where there are no preparations that UK businesses can make, until more is known about the nature of any trade deal.

The UK's departure from the Single Market, for instance, will mean that the EU will no longer take UK conformity with EU standards for granted. Yet, a mutual agreement on conformity assessment with the EU will determine whether exporters will be able to rely on existing testing arrangements, or whether they will have to arrange for extra testing via test houses established in EU Member States.

There are many such examples, where business can only prepare once the full terms of any deal are known, which is all the more reason why the current talks should be concluded as swiftly as possible.

But at least one preparation that the government can make has been made. Yesterday, it signed a £77.6 million contract with ferry operators to ensure crucial goods, including medical supplies, would reach the UK even in a no-deal scenario. And, contrary to previous government practice, these contracts are being made with DFDS, P&O and Stena, firms which actually operate ships. For all that, though, we still wait for the European Council on Thursday, for the next marker. This has President Charles Michel saying that it is in the interests of both sides to have an agreement in place before the end of the transition period. But, he says, this cannot happen at any price.

Sadly, that price is not for Michel – or anyone else – to determine. Whatever it is, will be far larger than it should have been, and will have to be paid in full before this is over. And the payment will not only be in money.

Also published on Turbulent Times.