Brexit: Barnier's wish list

22/12/2019

Under the circumstances, it was inevitable that Michel Barnier would respond to Johnson's plans to restrict the transition period to the end of December 2020. And that he has, in an authored article in the Project Syndicate magazine, under the heading: "Three New Year's Wishes for Britain and the EU".

Acknowledging that Johnson has ruled out extending the transition period, he writes that a deal on the future relationship will have to be concluded in less than 11 months. That, he adds, "will be immensely challenging".

Nevertheless, Barnier is committing the EU to giving it "our all", although he concedes that "we won't be able to achieve everything". As to his "three New Year's wishes", these he actually defines as a resolution to "set three goals to achieve by this time next year".

Coming somewhat out of left field, the first item on Barnier's "wish list" is not what one might think. He actually wants to ensure that the EU and the UK "have the means to work together and discuss joint solutions to global challenges".

Yet, the rationale he gives makes sense. "The UK may be leaving the EU, but it is not leaving Europe", Barnier says. He then cites the new European Commission President, Ursula von der Leyen, who in turn says: "Whatever the future holds, the bond and the friendship between our people are unbreakable".

Barnier has in mind a range of things, from "addressing climate change and promoting effective multilateralism, to defending our homelands and countering those who choose violence over peaceful solutions". On such things, he says, "we share essential interests and values".

Thus, the EU "will continue to engage positively with the UK, both bilaterally and in global fora such as the United Nations, the World Trade Organisation, and the G20. Consider climate change".

In particular, there is next year's UN Climate Change Conference (COP26). This will be held in Glasgow and, if it is to set "ambitious targets" it will require "a strong common position". If the EU and the UK cannot align on such a critical issue, Barnier says, "there is little hope that others around the world will be able to do so".

Some might have expected the EU's chief negotiator to have focused on more mundane issues, such as a no-tariff deal, but if time is short and only so much can be achieved, the logic of setting up mechanisms for " engaging positively" is unassailable. Given the sheer volume of issues which must be settled, then setting up mechanisms for ongoing dialogue assumes far more importance than just settling a few minor details such as tariff arrangements.

Still keeping to the high ground, Barnier's second item on his "wish list" is "the need to build a close security relationship". The UK's departure from the EU, he says, "has consequences", adding that the strong security cooperation that EU Member States have put in place is linked to the free movement of people. This, he declares:

… works because we have common rules, common supervision mechanisms, and a common Court of Justice. Because we trust each other and are assured that our fundamental rights are protected, we are able to share data extensively and implement integrated solutions.

While Barnier warns that "the same degree of cooperation is simply not possible with a third country that is outside of the Schengen area", he also acknowledges that "neither the EU nor the UK can guarantee its security without looking beyond its borders and building alliances".

In Barnier's view – doubtless articulating the EU's corporate view – "tackling terrorism, cyberattacks, and other attempts to undermine our democracies will require a joint effort". The lives of both UK and EU citizens, he says, "depend on our ability to count on each other.

To that effect, he states that "there can be no trade-off on our mutual security", whence the EU will be looking for "an unconditional commitment from both sides".

Last in his list of three wishes – and presumably least – Barnier wants an "economic partnership" by this time next year, which "reflects our common interests, geographical proximity, and interdependence".

However, in the political declaration agreed in October alongside the withdrawal agreement, he reminds us that the UK government made clear that "it will pursue a free-trade agreement with the EU, and rejected the idea that it would remain in the EU customs union". That means, says Barnier, that "the UK and the EU will become two separate markets".

Nevertheless, the EU, we are told, "will engage in these negotiations in a positive spirit, with the willingness to make the most of the short time available". But there is a sting in the tail. Like the UK, Barnier warns, "we will keep our strategic interests in mind".

Here we find expressed what amount to the EU's "red lines" – a harbinger of tough negotiations to come. "We know that competing on social and environmental standards – rather than on skills, innovation, and quality – leads only to a race to the bottom that puts workers, consumers and the planet on the losing side", Barnier says, adding that any free-trade agreement "must provide for a level playing field on standards, state aid, and tax matters".

To summarise, the EU's three goals for 2020 are: "to maintain a capacity to cooperate closely at the global level; to forge a strong security partnership; and to negotiate a new economic agreement". And, exactly as we would expect and have predicted in previous blogposts, Barnier suggests that the economic agreement "most likely, will have to be expanded in the years to come".

Here, we have what amounts to a confirmation that the EU is prepared for a de minimis agreement, with the EU and the UK going back to the table for post-transition talks which will continue for some considerable time. If Johnson and his advisers think everything is going to be done and dusted by the end of next year, they are going to be sorely disappointed.

But what also comes over is that the EU is not going to be content with just doing a trade deal. Taking Barnier at his word, the EU's priority will be to set up institutional arrangements through which the UK, the EU institutions and the Member States can continue a dialogue on issues of common interest.

One wonders whether the UK negotiators will be prepared for this and whether there will be an early agreement on joint mechanisms. If there is no agreement, or if the talks drag on, this could well erode the already limited time available for the negotiations on a new economic arrangement.

Similarly, with the EU also looking for "an unconditional commitment" on security issues – which would seem to suggest a formal treaty on security cooperation – any delay in coming to an agreement here could also affect the extent or scope of any trade agreement.

And then there is the "level playing field" issue. The degree to which this might affect talks on tariffs is not known at this stage, but it is likely that the greater impact will be felt when non-tariff barriers come to be discussed. And, if Johnson is adamant that there is to be "no alignment" between EU and UK rules, then the UK can expect a hard time.

Johnson, however, is dribbling about "building the new deep and special partnership", which is something he is not going to get unless he is prepared to bend on regulatory alignment – or at all, in the time.

Taking the cue from Barnier, it seems more likely that we're in for the long haul, with only the bare bones of a deal agreed by the end of next year. Following that, the UK will be committed to ongoing talks without an end date. However, if Johnson's "wish list" is a "total" Brexit (pictured), it is going to be many more years before that happens – if it happens at all.