Hurricane season

20 October 2017

October famously brings strong winds, so it’s no surprise that the weather between here and Europe should turn stormy. This was always on the cards, given the European Commission’s diary-date to hear Barnier’s progress, and the coincident onset of the minimum period required for British contingency planning. This last explains the recent polemical fury about “no deal”, becoming more than negotiating rhetoric with every day that passes. Steve Baker, celebrated for his resource and aggression, leads this policy strand, so it would be foolish to dismiss David Davis’ Halloween presentation to Cabinet on the subject. Meanwhile, as though generals fighting the last war, Lloyd Bankfein and Lord Mandelson make much of the price of departure, Jeremy Corbyn promises a manufacturing economy and parti pris journos stoke the fire. Let’s aim off all of them and try for a sanity check.

-o-

The EU has pushed a Brexit process which deliberately or accidentally impairs a positive outcome: it kicks off with the three toughest issues - money, Ireland and dispute resolution (hiding behind citizens’ rights). This undermines rather than cultivates mutual confidence. M Barnier’s mandate lacks any wriggle-room and Mrs May’s request for flexibility has fallen on ears still largely deaf to her.

It is dopey to argue that the EU benefits from any amount of British weakness; Brussels needs just enough for May to deliver the deal it wants. In fact she is signalling she is close to becoming too weak for this, rolling out the negotiator’s staple “I can’t sell this back home”. This prompts a roseate thought: is the Cabinet’s conspicuous disunity a device intended to strengthen May’s Brexit hand? Sadly, it is less of a stretch to believe in chaos. Regardless, it is hampering domestic administration by holding up the Great Repeal Bill, while the inflammatory soundbite of “no deal” has given new fire to Remainers and a tactical gift to Corbyn. Now for a couple of months of nail-biting on money, while the EU faces wild cards of its own - Catalonia, Austria and Merkel; plus the current ration of global turmoil - Trump, Iran and North Korea.

The EU has maintained unity and it would be mistaken to expect (eg) German manufacturing to bolt the lead from its government. On the other hand, economic voices always end up driving trade negotiations and eventually they will make themselves heard. These will include manufacturing exporters and participants in integrated supply chains - eg, BMW, Airbus and (who knew?) Guinness; public service contractors - eg, EDF, Veolia and Deutsche Bundesbahn; plus nations which export labour - Poland and its southern neighbours; or are economically close - Denmark, Ireland and the Netherlands; or otherwise hanker for special treatment - Spain seeking fishing access in return (say) for continued benefits for Costa retirees.

September’s headline topic, an implementation or transition period, has been almost forgotten. There is sense in this as the two sides are getting nowhere on an agreement about a destination: Barnier is unable formally to discuss it, but other EU figures are taking turns to trash the UK’s strap-line about a “new, deep and special partnership” as insufficiently specific. In fact the destination is more or less binary: unless there are similar trading and regulatory arrangements to those now prevailing (save for arms-length dispute resolution), there is little to discuss. This leaves unresolved the private sector’s reasonable requirement for regulatory certainty. What with one thing and another, the odds on “no deal” continue to shorten. If this becomes policy, it provides certainty of sorts, also bringing three thorny problems to the fore.

1) Integrated supply-chains;

2) Queues at Dover and Harwich; and

3) Cross-Ireland stability.

The solutions are (you heard it here first):

1. Free Trade Zones at Cowley (BMW), Filton (Airbus), Belfast (Guinness) and no doubt elsewhere;

2. Working-level deals (eg, between the Port Authorities of Calais and Dover, Harwich and Hook of Holland, Dublin and Holyhead), relieving all concerned of the embarrassment of state-to-state relations bypassing EU competencies; and

3. A hard-ish internal border between Northern Ireland and the island of Britain. The precedent for political purposes would be the agricultural inspections at (eg) Needles on the California-Arizona border. Curbing untoward traffic across the Irish Sea would mean beefing up harbourmasters, Coastguard patrols and maritime radar.

-o-

This is a tough time for those who prefer their politics to be measured. Brexit negotiations have reached their first crisis - it may not be their last. At home, unreconciled politicians, commentators and journalists are taking the opportunity to weigh in with every kind of inflammatory material. Best to recall that tempers become heated in negotiations; and that the view we’re getting is distorted by a moment of acute domestic disharmony. Also to brace ourselves, as in the normal course of things the hurricane season is followed by winter. It probably stretches the metaphor to invoke the inevitable spring, so let’s simply stand our ground as recognising that we’re in for some trying headlines and that, as the Sufists remind us, this too shall pass.