Richard North, 17/10/2020  
 


If Johnson really was that keen on a Canada-style deal, he had the perfect opportunity to resolve the state aid/competition issue. First, he could have adopted, on the part of the UK, an Act similar in scope to the Canadian's Competition Act 1985.

Then, he could have adopted Chapters 17 & 18 of the CETA text and, finally, the full text of the 1999 Agreement between the European Communities and the Government of Canada Regarding the Application of their Competition Laws.

As far as I understand it, much of the frustration of the EU with the UK stems from its unwillingness to table any substantive proposals so here, in a neat little package, are all the elements needed to take this issue off the table.

And since Johnson asserts that, "from the outset we were totally clear that we wanted nothing more complicated than a Canada-style relationship", it is difficult to see what is stopping these texts being presented as part of the UK offering.

Mind you, if Johnson does want the Canada package, then he needs to be aware that there are 117 agreements between the EU and Canada, of which 39 are bilateral. These include the all-important agreement on Air Transport, the agreement on civil aviation safety and the agreement on trade in civil aircraft, the latter running to 122 pages.

CETA, in that sense, is only the cherry on the cake. There is much more to the EU-Canada relationship than just that treaty and, for the UK to have a similar relationship, we would need to adopt de novo the provisions of – at the very least – all the other bilaterals which are still in force.

In all probability, though, Johnson has no more idea of what the Canada-style relationship entails than he does the nature of Australian arrangements, which he wrongly uses as a synonym for a no-deal outcome.

In actuality, Australia has 86 Agreements with the EU, of which 20 are bilateral, including the vital mutual recognition agreement on conformity assessment – something which the EU has refused to give the UK.

One takes with a pinch of salt, therefore, Johnson's assertion that "with high hearts and complete confidence we will prepare to embrace [this] alternative". If this idle, facile little man doesn't even know what it entails, he is in no position to assure us that "we will prosper mightily as an independent free trading nation, controlling our own borders, our fisheries, and setting our own laws".

Certainly, Mike Cherry, the national chairman of the Federation of Small Businesses, doesn't agree with him. He says firms are not ready to cope with a no-deal Brexit with only ten weeks before the end of the transition period at the end of December.

"They're being told to both prepare and simultaneously manage a fresh set of Covid restrictions. Many simply don't have the time or money to make adjustments, even if they want and need to", he says.

And yet, for all the drama, Denis Staunton, London Editor of the Irish Times isn't buying in to the idea that the trade talks are over. The two sides are closer than ever on the substance, he writes, and Brussels is confident that a post-Brexit trade deal is increasingly likely.

In any event, the declaration that the talks were over didn't come directly from Johnson. It was a Downing Street spokesman who delivered that line, and – according to Staunton – was met with bewilderment in Brussels, precisely because a deal is closer than ever before.

After a succession of difficult negotiations on fisheries between Michel Barnier and the EU's coastal states, Macron conceded for the first time that his country’s fishermen would lose some of their access to British waters.

On the level playing field guarantees of fair competition – notwithstanding that the solution lies with the Canadian texts - Downing Street was already aware that Barnier was preparing to make a fresh compromise offer next week.

The two sides have made progress on state aid or subsidy policy as Britain has begun to engage more seriously on the terms of reference of its domestic regulator.

EU leaders were adamant during the European Council that Britain’s level playing field guarantees must be "robust and enforceable" so Barnier's room for manoeuvre is limited. And he is still resisting Frost's demand that the two sides should start negotiating the legal text of an agreement before a clear landing zone has been identified.

Thus, says Staunton, although Downing Street ramped up the rhetoric with its declaration, Johnson's own statement left the door open to further talks. Frost's rejection of Barnier's offer of talks in London next Monday, he says, is less dramatic than it appears because no talks were actually scheduled and Barnier made his offer in a letter on Friday morning.

The two men have agreed to talk next week but Staunton thinks the EU may have to make a public gesture to satisfy Johnson's "honour" – such that it is - so that negotiations can resume.

The real issue, though, is that time is running out and real obstacles remain in the way of an agreement. With an absolute deadline running to the second week of November, we don't have the luxury of endless time to play these games.

Staunton reminds us that the Downing Street team in charge of the negotiations, including Frost, is inexperienced and prone to serious lapses of judgment, as in the treaty-breaking Internal Market Bill. And Barnier faces a difficult challenge in balancing the need for compromise with the determination of EU leaders not to give Britain an unfair competitive advantage.

That makes life difficult enough, without Johnson sounding off, and parading his ignorance. But I suppose we will have to tolerate more of this before we're finally done.

Some analysts are saying that Johnson's statement is a choreographed set-piece designed to force the EU to back down, although it comes with the risk of precipitating an unintended no-deal.

Neil Wilson, the chief market analyst at the financial trading platform Markets.com, argues: "It's not entirely bluff – the UK would through gritted teeth accept no-deal because politically Johnson is taking so much flak over the pandemic that he has no room to 'let the country down' over Brexit".

Although time is tight, he said an agreement could still be made at the 11th hour – so we're back to the emergency European Council idea in Berlin on 16 November. In short, for all the game-playing, nothing substantive has changed.

Also published on Turbulent Times.






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