Richard North, 03/09/2020  

An unusually long address by Michel Barnier – this one at the Institute of International and European Affairs in Dublin - serves to set out the Commission's view of the final stages of the "future relationship" talks between the UK and the EU.

He starts with reminding us that that we are now less than four months away from 1 January 2021, the date chosen by the UK for its "economic and commercial Brexit", after the "political Brexit" in January this year – a date arrived at because the UK refused any extension of the transition period.

In another statement of the bleedin' obvious, he tells us we have no more time to lose. A final agreement must be reached by the end of October if there is to be a new partnership in place by 1 January 2021. This is the only way to give enough time to the European Parliament and the Council to have their say. Everyone, everywhere, says Barnier, 'must be realistic about this strict deadline'.

Even then, the "economic Brexit" will have negative consequences – many negative consequences. But, Barnier says, "if we all act responsibly, we can contain some of those consequences". As to the current negotiations, Barnier stresses that the EU wants a close partnership with the UK - provided the conditions are right. But, so far, the UK has not engaged constructively on those conditions. He repeats, therefore, that he is 'particularly worried - and disappointed - by the UK's lack of engagement on three points'.

For his first point, we are told that, since the start of these negotiations, the UK has refused to engage on credible guarantees for open and fair competition. Yet, the EU has been clear from the very beginning that any trade and economic partnership – between economies as close and interconnected as the EU and UK - must include robust and credible mechanisms to avoid trade distortions and unfair competitive advantages.

This is particularly important, Barnier adds, in the area of state aid, where the potential to distort competition using subsidies is significant. And a level playing field that ensures common high standards - in areas such as labour rights and the environment - and with effective domestic enforcement and dispute settlement mechanisms, is the only way to start a new relationship between the EU and the UK on a firm and sustainable footing. Furthermore, this is also what Prime Minister Johnson agreed to, explicitly, in the Political Declaration last year.

The second point is that, since the start of the negotiations, the UK has not shown any willingness to seek compromises on fisheries. And contrary to media reports this week, the UK government's position has not evolved in past months. No new legal texts have been tabled by UK negotiators.

In a damning comment, he then says that, where the EU has shown openness to possible solutions, "the UK has shunned our offers". Yet the UK government's position would lock out Ireland's fishermen and women from waters they fished in long before Ireland or the UK joined the European Economic Community in 1973 - and of course, the fishermen and women of many other EU countries. That, says Barnier, is just not acceptable.

He says the EU fully understands and respect that the UK will become an independent coastal state, outside the Common Fisheries Policy. But it will not accept that the work and the livelihoods of these men and women be used as a bargaining chip in these negotiations.

Any solution, he says, must ensure a balance between further developing the activities of British fishermen and women, safeguarding the activities and livelihoods of European fishermen and women, and preserving natural resources. Without a long-term, fair and sustainable solution on fisheries, there will simply be no new economic partnership with the UK, he then tells us.

In Barnier's third point, he has it that, since the start of these negotiations, the UK has been extremely reluctant to include any meaningful horizontal dispute settlement mechanisms in our future agreement. Yet, this is the only way to ensure that what the parties eventually agree on is respected.

And on all these issues, Barnier says, we are simply asking to translate the political engagements taken in the Political Declaration into a legal text - nothing more, nothing less. Speaking like a teacher marking a recalcitrant pupil's work, he adds: "Yet, on all these issues, the UK side continues to disappoint".

And yes, the EU knows well the UK's argument. It wants a clean break from the EU, full sovereignty, and the freedom to set its own rules and spend its money as it wants, with no constraints from Europe. And it is for all these reasons, apparently, that the UK insists it cannot commit to a level playing field or to basic safeguards for our future relationship – not even when it comes to fundamental rights.

On the other hand, British negotiators are still seeking continuity in many areas. That is not a "clean break" at all. On transport or on energy trading, on its role for conformity assessments for goods, and on many aspects of police and judicial cooperation, the UK government is still looking to keep the benefits of the EU and of the Single Market, without the obligations.

Wearily, Barnier remarks that the UK often claims it would be in the EU's interest to grant it a special status in these strategic areas of cooperation. But this is evidently not the case, and hardly in the EU's long-term economic interest.

For instance, he says, British proposals on rules of origin would help the UK to develop its role as an assembly hub for the EU. They would allow the UK to source goods from around the world and export them, with very little alteration, to the EU, as British goods: tariff- and quota-free.

British proposals on road transport would allow British truckers to drive on EU roads without having to comply with the same working conditions as EU drivers. The UK's proposals on air transport would allow British airlines to operate inside the EU without having to respect the same labour and environmental standards.

In the area of energy, he complained, the UK is asking to facilitate electricity trade without committing its producers to equivalent carbon pricing and state aid controls. In this area, as in others: without a common framework on state aid, the UK government would be free to hand out subsidies at will.

Furthermore, any such support would not be confined to the green economy, but also polluting industries – and not just industries of the future, but also traditional sectors, such as steel and automotive – before exporting these, tariff and quota-free, to EU markets.

How, Barnier asks, can we conclude a long-term economic partnership agreement – between sovereign partners – without knowing which system of state aid or subsidies the UK will put in place, or without any assurances that the UK will not use its new regulatory autonomy to distort competition with us in the future?

There is no issue, he says, with regulatory divergence – unless this distorts competition. Then, he says, "we have a problem", as in the food sector. Here, not only is the UK looking to go back on protections for Geographical Indications secured in the Withdrawal Agreement, it has also given no reassurance on the future sanitary and phytosanitary regime that the UK will apply after 1 January 2021. Again, he asks, "How can we make progress on sanitary and phytosanitary issues when we have no idea how the UK's system will evolve?"

But even with an ambitious future partnership with the UK – which would help limit the negative impact of Brexit - there will be big changes on 1 January 2021. On that date, the UK will leave the Single Market, the Customs Union, all EU policies, and all of the EU's international agreements.

On that date, therefore, customs formalities will apply to all imports and exports with the UK. The EU will no longer recognise UK type-approvals for cars, and financial institutions established in the UK will lose the benefit of the EU's "financial passports". No trade agreement – no matter how ambitious – can change this.

Yet, for all that, Barnier continues to think that Prime Minister Boris Johnson wants an agreement with the EU. This is also the wish of Presidents Ursula von der Leyen and Charles Michel, the European Parliament and the 27 Heads of State or government. Thus, the EU will do everything in our power to reach an agreement, until the very end. But, he warns, we will not sacrifice – never sacrifice – the EU's long-term economic and political interests for the sole benefit of the UK.

In past months, he avers, "the EU has repeatedly shown flexibility and creativity to work with the UK's red lines: on the role of the European Court of Justice, on preserving the UK's legislative autonomy and on fisheries". It is time, he says, for the UK to reciprocate on those issues that are fundamental for the EU.

And with that, Barnier announced that he would be be back in London next week for the eighth negotiating round. After that, he sincerely hoped to be able to tell a story of real, tangible progress in all areas.

Don't hold your breath.

Also published on Turbulent Times.

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