8 December 2017
This responds to requests from readers for a tweak of last Sunday’s blog to take account of this morning’s agreement. Modestly claiming to rise above any element of clever-dickery, it also serves well as the initial post in a new series of blogs on the “Second round” of negotiations.
So here we are, with a breakthrough slightly over half way through the eight weeks which we called as the most testing period of Brexit negotiations. Can’t we agree that we’re seeing as much hyperbole as may reasonably be encompassed in fish and chip wrappers? The Remainers are variously bemoaning HMG’s fantasies and crowing at its capitulation; the Leavers are variously bemoaning HMG’s betrayal after crowing at German and Irish disarray. Shall we instead catch a breath?
What we’re seeing is that old diplomatic standby, a final form of words. We may explore this by examining the key elements of the agreement. First, Barnier’s three preconditions for moving to trade talks.
Money The journos tell us that they’ve been briefed about a big headline sum. Number Ten is scoring it at £35-39bn or €40-45bn, well under half of Germany’s stretch target. If such figures are unchallenged, they are confirmed as a result, particularly as the small print tells us that much expenditure will be defrayed over a prolonged period - indeed, at the limit, indefinitely. No surprise, however, that Farage is crying a river; that’s his job. For the rest of us, forms of words along these lines are worth having if they pave the way to a positive deal on trade. On the other hand, the huffing and puffing from Brussels and its glee-club is intended to cast doubt on any such thing.
Citizen’s rights This was never really much of a problem. An early deal on reciprocity was prevented only by Brussels’ attempted land-grab on the ECJ’s jurisdiction as a preliminary for being difficult on trade. It amazes me that self-proclaimed campaigners for Citizen’s rights are complaining at the outcome. Maybe that’s to take attention away from the ECJ’s involvement for eight years after B-day - less than full jurisdiction, but more than outright elimination. Worst case, this could turn out a concession that haunts the UK’s negotiators down the road.
Ireland The character and location of border controls present a thorny problem. This has been amplified by the bad faith of the EU, hiding more land-grabs behind pieties about the peace settlement; plus posturing from the Republic which fall out of its own political disarray; together with the prolonged earache stemming from the DUP’s role in supporting May’s administration. But here too, forms of words have emerged which promise to square circles once seen as relentlessly curvilinear. They turn out to be restricted in their application. Contrary to initial commentary, they do not commit the UK to comprehensive “regulatory alignment”, but - in Northern Ireland itself - to
“…those [EU] rules…which…support North-South cooperation, the all-island economy and the protection of the 1998 Agreement.” - para 49 of the joint communiqué
The “all-Ireland economy” is the very best form of fudge. It can be taken to mean whatever you like, from everything under the sun to the narrow specifics of agriculture and the electrical power network. And by no means parenthetically, if this can be fudged, what may not be achieved elsewhere?
Now to a couple of topics coming up over the edifying experiences of the last half-year.
Transition. Here, the issues are duration, dispute-resolution and end-state. The last is explored briefly below and is undoubtedly the trickiest, as the two sides haven’t yet agreed where we’re going. This does not, however, justify Brussels’ perennial complaint that the UK has failed to set out its own objectives. In fact it has - the much-derided “deep and special relationship” to which both sides have devoted a fair bit of effort in their back and forth paperwork. Admittedly, these objectives may not be attainable. The difficulty is that those saying so most forcibly have squandered their credibility, either transparently parti pris as batting for the other side, or with an unappetising history of schadenfreude in the cause of proving how tremendously right they are.
End-state. The treatment of the UK’s service exports is critical. HMG is relying on the undoubted truth that both sides start in regulatory harmony, but this may mean insufficient to Brussels once it returns to its customarily grumpy mood. Indeed, the EU positioned itself for unashamed mercantilism from the outset with its dodgy promotion of the ECJ at every turn. This is disheartening and if kept up could unravel today’s agreement. On the other hand, the balance of reputation management is moving to favour the UK. During the rounds of negotiation now completed, May was willing to pay a price to cement Britain’s reputation among its potential trading partners as honouring rules-based systems. It should now reap rewards as it enters into negotiations with them in parallel with its second go-round with the EU. And from now, reputation will bear more heavily upon Brussels, obliged to show a positive approach unless it decides that it simply doesn’t care about trade deals.
Net, net, we’re looking at a more-or-less balanced outcome. The contortions on Northern Ireland particularly demonstrate both sides’ determination to devil something out. On the other hand, perhaps we should revisit the house view that the inflamed character of these few weeks has been a transient consequence of the deadline operating upon both sides. You’ll recall the argument: that the confluence of the Article 50 period and the annual cycle of corporate budgets combined to prevent the UK extending negotiations into 2018, unless it can offer bankable assurances to the private sector. Thus, the heightened temperature and the theatrical breakthrough - slightly sooner than the form book would have it. This made it far-fetched to argue that the EU was not as much pressured as the UK. But these very agreements have come at the price of giant rations of fudge. These threaten indefinite national disharmony, as the meaning of one or another form of words is endlessly contested.
That ain’t what you want.