Roderick Crawford: Almost halfway through July, there is still no sign that a trade deal with the EU is possible – never mind probable.
Roderick Crawford works on conflict resolution in countries such as Yemen, South Sudan and Iraq, and on Brexit-related matters. He is a former editor of Parliamentary Brief.
We are approaching the moment of truth in the negotiations on the future relationship. In February, in the command paper on its approach to these negotiations, the Government set out the high-level meeting in June as the point when it hoped the broad outlines of a deal would be clear.
Covid-19 intervened. But at that meeting last month, the Prime Minister said he saw no reason why ‘a deal’ could not be done in July, giving businesses certainty about the post-transition regime. Accelerated talks were begun to break the deadlock.
Almost halfway through July, there is still no sign that a deal is possible – never mind probable. At the end of the restricted talks earlier this month, and again after the London discussions ended last Thursday, Michel Barnier reported that ‘serious divergences remain’.
David Frost’s assessment at the end of the third round of talks in mid-May was that ‘we made very little progress towards agreement on the most significant outstanding issues between us’; at the close of the fourth round in early June he reported that ‘progress remained limited’; in July, hhe stated that the talks ‘underlined the significant differences that still remain between us on a number of important issues’ — he made no statement at all at the end of last week’s discussions.
To see how great these differences are you only need to look at the draft agreements published in March by both parties. These set out very different visions of the future relationship; the EU set out a draft for a New Partnership with the United Kingdom; the UK set out a draft text for a Comprehensive Free Trade Agreement with supplementary agreements on other matters — justice, fishing, etc, but strictly no institutional framework for foreign policy and defence.
The partnership as set out by the EU is not one between equals: its conditional values, its governance structure, the role for EU rules and the Court of Justice, as well as the assumptions and tone it takes across the draft document represents an attempt to hold the UK within an institutional framework set by Brussels, for Brussels. The EU is, perhaps, blind to some of this.
The UK just will not accept such a partnership – one that it does not want cannot be forced on the UK. Yet this remains a point of significant difference between the parties. The EU has scope in the Political Declaration to opt for alternative institutional arrangements along lines the UK could accept at little cost to itself.
So on to the comprehensive free trade agreement that is the core of the future relationship. The two parties are at odds on the level playing field, and their red lines clash head on. The EU insists there can be no agreement on a free trade agreement without robust guarantees on a level playing field – the language of the political declaration; it has been clear about this since the European Council guidelines on these current negotiations were set out in March 2018.
The UK insists that the UK must have control over its own laws – that was the point of Brexit – and that it cannot be required to remain aligned with EU law; such a requirement, after all, is not usual in free trade agreements.
The question is: can these apparently irreconcilable positions be reconciled? They might be. Could limited but core ‘common high standards’ – the wording in the political declaration – be agreed, that provide sufficient robustness to the level playing field for the EU but which do not significantly restrict the UK’s freedom to diverge from standards originally set out in EU regulations?
These core ‘common standards’ could be extracted from and entirely de-coupled from EU law – and thus ensure there is no role for the Court of Justice – and be included in an annex of the FTA; they should only include standards that significantly affect competition, a small subset of the regulations applying in any area of the level playing field.
Robust guarantees do not need to be comprehensive. They can provide the pillars of the level playing field structure with the rest filled in by commitments along other lines. These could be similar to those suggested by the UK, including on taxation as it relates to competition, or by other arrangements like equivalence or mutual recognition. This would be a mixed economy, bridging the gap between UK and EU positions with both parties making compromises.
As to enforcement, an agreed set of core standards could be backed up with a dispute mechanism operating within the agreement – again, no role for the Court of Justice; this could be complemented by unilateral rights to action to guard against substantial undermining of standards by one party.
If the next round of negotiations included a focus on identifying such a set of core standards, to provide sufficient robustness for the EU while not limiting UK political freedom in any meaningful way, a satisfactory solution might present itself to both parties.
A fishing agreement would still need to be put in place. Perhaps flexibility over annual quotas would help – do we really want to negotiate annually? We are not Norway – fish is not that important to us economically nor does it affect anywhere near so many of our communities. A better deal for UK fishermen, a better deal for the marine environment and an improved basis for the policy there should be, but regard for neighbouring fishing communities too.
We are clearly a long way from bridging the differences between the two parties at present; without concessions from both sides, there won’t be an agreement. For many, WTO terms are good enough for trade and the compromises required for a deal are politically unacceptable.
However, the Government has said we can get a deal. If we can agree the mutual compromises on the level playing field to secure a workable comprehensive free trade agreement, re-set the spirit of the agreement as one between sovereign equals (which is what is required for it to work), and agree an architecture for the FTA and supplementary agreements along lines preferred by the UK, then we would have a deal truly worth making. Time is, however, running out.
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