Sound and Fury

24 May 2018

How justified was my last blog in its lordly dismissal of current attempts to derail Brexit as “sound and fury”? My read is that it was bang on the money.

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Consider the fuss over the Irish border. Its intractability is said to have propelled May into a “backstop” which cements the Customs Union beyond the transitional period; and this may come to include the Single Market. But this is dope-smoking of heroic proportions. In fact, May’s current wheeze seeks to truncate any backstop, to the principle of which she agreed last year, from an indefinite to a time-limited commitment. (Of course, the EU has its own view on this.)

Now to HMG’s customs proposals. First, let’s note that these anticipated the public fuss about Ireland by some months. In other words Britain’s negotiators, so far from making stuff up on the fly, anticipated the trickiest problem on the table. Of course that is not the same as saying that they solved it: both of the UK’s proposals, “partnership” (collect EU customs at the border, with rebates to imports staying here) and “streamlined arrangements” (goosed-up technology and working-level good-will) were dismissed on sight by the EU. This remains its position.

In order to get a handle on what’s up, consider where the principals are coming from. The EU would prefer things to stay the same, with their bloody-mindedness causing the current impasse. The domestic “Remain” camp feels similarly, so they are talking up difficulties with a will. Public servants see scope for career-growth, ie, bigger budgets, more kit and more folks to boss around; thus their remarks about costs and delays. And the journos lap this up: every week a new crisis, every day a new turn of events.

But think a bit more deeply. How realistic is it for Brussels, for Remainers, to seek arrangements where the UK can’t make its own trade deals and is obliged to accept rules which it cannot affect? How do they imagine this could be sold to the electorate? The question has only to be asked to be answered: it’s obviously not on.

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If we aim off the frenzy of the news cycle, we may discern a couple of significant developments coming up over the last two days - one in Europe, one at home. The first is that last night’s appointment of Giuseppe Conte as Italy’s prime minister means that Brussels’ biggest problem is no longer London; it’s Rome. The Euro is now en route to an existential crisis. Maybe Europe’s leaders will rise to the occasion; but then again… And the distraction means that Brussels will want to get Brexit out of the way, turning the Article 50 timetable into a universal straightjacket. Shortly, such considerations are likely to weigh upon the UK’s Remainers.

In addition, earlier today HMG turned up the heat on EU negotiators already fractious, with paperwork on external and internal security, the Galileo communications satellite programme, and economic partnership, offering the following takeaways:

  • The UK is holding out its strengths in internal and external security as bargaining counters in the economic negotiation. Thus, the paper on economic partnership explicitly links them; the paper on internal security identifies 76 “capability gaps” to be plugged; and the paper on external security identifies nineteen areas of potential co-operation, concluding that “we should not wait if we do not need to”. (Is it a coincidence that today the UK reminded its neighbours of its unique capacity for force-projection, by announcing successful tests of the Sea Ceptor anti-missile missile?)
  • Meanwhile, Galileo can go whistle: BAe Systems is the leading European company in military and space technology, with whom the UK can go it alone. This comes with the threat of a demand for a €1bn rebate which is driving the EU hopping mad.
  • As to economics, the three areas where the UK is on the ask: services/investment; financial services; and customs are placed within a context of the four where the boot is largely on the other foot: goods; agriculture, food & fisheries; energy; and mobility; plus three where it is as broad as it’s tall: digital & broadcasting; transport; and “horizontal measures”, eg, state aid, company law etc.
  • The UK restates its position that dispute resolution calls for “putting in place robust provisions to resolve differences…including through independent arbitration”.
  • The UK seeks that “[b]inding commitments that go further than those in a standard FTA should be in return for commensurate levels of market access”.

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These are not the sunlit uplands; but neither is it the slough of despond. HMG’s economic paper points out that the two sides

        “have a short amount of time to negotiate a partnership that benefits both the UK and the EU.”

This combines with the emerging Italian crisis to put at least as much pressure on Brussels as on London. The next step would be the Withdrawal Bill itself. Here, the Lords have had a rush of blood to the head, passing fifteen wrecking amendments. The Commons is entitled to reassert itself if it has a mind to, so it comes down to whipping: the balance between Tory and Labour bolters. A fine calculation, so I’d be betting on delay until it is set fair to go Mrs May’s way. But expect more sound and fury for a while.