Brexit: Posturing and Impasse

Brexit: Posturing and Impasse 1

Even couples who intend to have a friendly divorce usually find they turn ugly, and the best that can be hoped for is that the acrimony turns out to be just a phase. There were never such intentions for Brexit, at least from the UK side. The triumphal Brexiteers reveled in the prospect of freeing themselves from what they saw as an oppressive Europe. The EU side started out resigned but prepared to do what was necessary to accommodate the UK’s departure.

As I’ve indicated, interpersonal dynamics matter in negotiations. The UK’s gratuitous hostility, inconsistency, and refusal to listen has to have worn on the EU side. And this may simply be the slow and painful working out of what we pointed out from close to the outset: that there was no bargaining overlap in the two side’s positions, which means no deal. In classic EU “kick the can” dynamics, that time has been postponed far longer than we anticipated. But as with the first game of chicken, over the Withdrawal Agreement, both sides manage to forestall a crisis. It’s hard to see how they pull that rabbit out of a hat again.

The event of the week, that of the UK publishing its draft legal texts, slipped into high drama because the UK’s Brexit negotiator, David Frost, made it so by. He sent a borderline testy letter to his counterpart Michel Barnier, and Barnier sent back a chilly response. We’ve embedded both missives below. They are short and very much worth reading.

You only have to get to Frost’s first substantive point to find confirmation that the talks have foundered. Fatally, Frost makes clear that the UK and EU are at loggerhead over a basic “shape of the table” issue, which is what the form of the agreement should be. If the two sides can’t get past that, they won’t even get to substance.

Here is the relevant section:

First, we have tried to be clear consistently that we are looking for a suite of agreements with a Free Trade Agreement at the core…

Given this reality, we find it perplexing that the EU, instead of seeking to settle rapidly a high-quality set of agreements with a close economic partner, is instead insisting on additional, unbalanced, and unprecedented provisions in a range of areas, as a precondition for agreement between us.

This may seem innocuous. It isn’t. Frost’s “tried to be consistently clear” looks designed to signal exasperation.

The UK wants a series of so-called sectoral deals. The EU has never agreed and has signaled it wants a broader, more integrated agreement. From a January post, quoting Richard North:

Speculation here, from a variety of sources, including this one, has it that the parties will opt for sector-by-sector agreements….

But if that is supposed to be the game plan, there is no hint of it from Barnier. With his feet firmly on the ground, he puts as his first priority new capacity building, setting up mechanisms and institutions that will enables [sic] the EU and the UK to work together in the future.

And not being in agreement on what the end product of the negotiations looks like means they are nowhere. They aren’t even agreed on what a blank outline of an end product would be.

Needless to say, Frost called out Barnier on substantive issues. While he is right to finger-wag about the EU’s aggressive position on fisheries, he’s on thin ice on many other issues. It’s cheeky for him to act as if the EU-Japan could be any sort of model for the UK. But most importantly, as we previewed, the EU and UK have a fundamental disagreement over what the EU calls the level playing field, which is basically that the UK can’t undercut EU standards if it is to have low-fricion access to the Single Market.

Further commentary from the Twitter peanut gallery:

And the Financial Times is calling for an extension to the transition period, which is na ga happen.

Having said that, there was some more progress on the Irish Border front. The UK has had to admit that there will be checks at the Northern Ireland border. From the BBC:

The government has confirmed there will be new checks on some goods entering Northern Ireland from the rest of the UK as part of the Brexit deal.

It will expand infrastructure at Northern Ireland’s ports to carry out checks on animals and food products.

The details are contained in UK proposals for implementing the NI part of the Brexit deal.

Northern Ireland will continue to follow some EU rules on agricultural and manufactured goods.

The Northern Ireland protocol is supposed to be operational by January and has to be applied even if the UK and EU do not reach a trade deal.

Terry Connelley of RTE was cautiously positive about the latest proposals on the Irish Protocol:

The UK paper on implementing the Protocol skirts as close to the rocks of EU disapproval as possible. But it may have just done enough to avoid a fresh crisis over the Irish question….

In reality, today’s paper is a further rhetorical reassurance for unionists, and not the technical detail that the European Commission has been asking for.

The Financial Times was not so keen:

The UK conceded for the first time there will be post-Brexit checks on trade between Great Britain and Northern Ireland, flying in the face of Mr Johnson’s claim there would be no such controls.

The checks, which will be “minimal”, according to Michael Gove, the Cabinet Office minister, are unlikely to satisfy Brussels. It wants rigorous customs and regulatory checks in Northern Ireland to protect the EU single market after Brexit.

Responding to the UK document, Dublin said customs remained a “real tricky” area in the talks. Simon Coveney, Ireland’s deputy premier, described the UK document as a “step forward” but that, at the border, enforcement was crucial. “It’s very clear in the language of the [protocol] that the EU will be entitled to have a presence to ensure that the protocol is being implemented in full,” he said….

But Mr Gove’s plan is likely to run into opposition from the EU, which wants rigorous checks to protect the integrity of its single market: under the UK-EU deal the north-south border in Ireland will be left open….

One diplomat told the Financial Times that Britain’s rejection of any new customs infrastructure “raises red flags”, while noting that “all this needs to be studied thoroughly, before jumping to conclusions”. 

Asked whether the plan honoured the protocol that Mr Johnson agreed with EU leaders last year, one Brussels official said simply: “It doesn’t.”

So no deal is back on. I welcome any cheery ideas as to how this outcome might be averted. I can’t come up with any.

00 Frost to Barnier

00 Barnier to Frost

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