Brexit: playing chicken

30/08/2017

Having taken a fairly dim view of the recent position papers produced in the name of our government, one can hardly be surprised that first Barnier and now Juncker are less than impressed by them.

We can see the game. The EU wants to discuss the Phase 1 issues and will not move on until there has been shown "sufficient progress" in resolving them. HMG wants to by-pass some of these issues and discuss trade immediately, arguing that everything can be discussed together.

This is how it has been for some time now. And if neither side gives way, then the outcome for the UK is dire. Thus, it really doesn't matter who is to blame. Unless this is sorted, we're in for a torrid time. And if the EU isn't going to bend, then it is going to be up to the UK to make the first move.

The trouble is that, as far as it goes, Downing Street is insisting that the talks are in "a 'good position", while former foreign secretary William Hague – echoing the views of many – says it is clear the EU is "giving Britain the run around".

Clearly, there is no meeting of minds and no indication of when the two sides are likely to converge, if at all. It will probably take a heroic intervention by Mrs May to set negotiations back on course, except that it is unlikely that she has the political strength to secure such a prize.

What few seem to be focusing on though – apart from Barnier, who is constantly warning about time slipping by – is the scale of the issues which will have to be addressed once Phase 1 is complete.

Given that we are not likely to see talks start on these until the New Year, and six months much be allowed for the Council and European Parliament to agree a deal – which must also be put to the Westminster Parliament, we probably have only six or seven months for substantive talks.

As it stands, we're only getting three full days of talks between officials each month, so it looks as if we are expecting to complete a complex agreement with only about 20 days of face-to-face negotiations. This is not what one might normally consider to be within the realms of possibility.

Irrespective of the rights or wrongs, given the dire consequences for the UK of the EU Treaties expiring without a deal in place to cover our trading requirements and other immediate needs, there should be a degree of alarm, even approaching panic, in the UK camp by now.

Yet, nowhere does one get even the slightest hint of that from Mr Davis – who continues to lack that all-important sense of peril. And, if Labour had any real understanding of what was going on, it would not be prattling on about transitional periods, the Single Market and the rest. Rather, it would be banging on about the delays in reaching agreements on Phase 1, and warning of the dire consequences of an "accidental Brexit ".

Over term, I have written many pieces dealing with the potential consequences of the UK walking away from the talks, but the outcome if the talks fail - the accidental Brexit - is just as dire, even though this was not the intention of any of the parties involved.

But in my various pieces, it is actually quite possible that I have under-estimated the consequences of a no deal scenario – not least to avoid being accused of being excessively alarmist (not that this has stopped some of my detractors).

Back in January though, I published an analysis of the effect of Brexit on truck drivers, noting that permission for driving license-holders to drive on the roads of other EU Member States is conferred, in the first instance, by the Directive 2006/126/EC, which makes provision for all licenses (and their categories) to be mutually recognised.

That mutual recognition, however, applies to licenses issued by EU Member States. When, on 29 March 2019 the UK leaves the EU, it will no longer be a Member State. If the EU-27 then choose to apply a literal interpretation of the Directive, they could refuse to accept the validity of any driving license issued by the DVLC.

Of the five million car crossings over to France via Dover and the tunnel (and back), no easily accessible figures exist on how many drivers carried British-issued licenses. But, assuming the figures out are matched by the returnees, we could easily be looking at two million license holders each year.

At an average of 5,000 cars crossing over to France each day, with similar number of lorries, you don't even have to worry about customs. None of those vehicles are going to be allowed on French roads. They will be turned round and sent right back to England.

For lorries, as I wrote earlier, there are the other issues – the certificates of professional competence, transport operators licenses, insurance and validity of roadworthiness tests (MoTs, etc.). Some of those will also apply to private cars, particularly the matter of insurance.

It should not take much to imagine the chaos we will be experiencing at the Channel ports and, if Ireland also wants to apply the letter of the law, we could also see drivers holding UK licenses turned back at the Irish border.

Such difficulties are not the rabid imaginings of a fanatic. All you have to do is read the law and then realise how integrated we are with the rest of the EU. And, when we leave the EU, all that stops – which is why we need a continuity agreement to keep things moving after we leave.

Then, apart from all the other issues relating to the EU – including the possible cessation of commercial air traffic – there is also that small question of all the trade deals and other agreements completed on our behalf by the EU with the countries of the rest of the world.

Despite the best attempts of the "Ultras" to convince themselves that the EU does not have any deals with the likes of China and the US, the Guardian yesterday managed to identify 19 commercial agreements with the US that we would lose when we leave the EU.

The figure comes from Open Britain but if they'd read this blog from April last year, they would have seen that I had counted not 19 but 38 – exactly double. It really is remarkable, I find, how determined such people are to ignore this blog, and reinvent the wheels for themselves.

Anyhow, even with close cooperation with the EU, concluding continuity agreements with our global trading partners is going to be a hard enough task. In the context of an accidental Brexit, the consequences are stark. Without customs agreements in place, most of our exporters will find it very difficult indeed to get their goods accepted. Costs will escalate and many will be turned away.

As for imports, even the mighty Bloomberg is finally noticing that we might have problems, after being told by the British Retail Consortium that UK shoppers "could be deprived of fresh Spanish oranges and prime cuts of Irish beef unless the government quickly smooths out post-Brexit customs processes".

The number of inbound shipments of goods requiring checks would more than quadruple to 255 million per year if the UK leaves the European Union without a deal, says the BRC – yet another one that can't tell the difference between customs checks and the sanitary and phytosanitary checks. At least, though, BRC CEO Helen Dickinson has the sense to observe that "a customs union in itself won't solve the problem of delays".

Among the issues that the BRC wants the government to address are inbound food checks at the UK's 21 border inspection points, which aren't currently required on EU produce. Port officials now check 50 percent of poultry containers and 20 percent of beef, lamb and pork shipments from outside the bloc.

If the UK leaves without a deal, goods such as Dutch tomatoes could be delayed by two to three days at ports, raising the cost of shipments and storage and causing perishable items to rot, the BRC said. British grocers "would struggle to replace lost imports with domestic items because of limited supply, putting upward pressure on prices".

The shallowness of this analysis is par for the course. No mention of capacity issues - as to whether the system could cope with the massive increase in traffic involved. Rather than days, the delays could extend to weeks.

Nothing of this, of course, is cast in stone, and there is nothing that cannot be resolved across a table by patient negotiation. But the number of issues to be agreed is vast and, since we've just spent nearly five months on not agreeing three key issues, one might be looking at decades before we return to something approaching normality.

What is especially disturbing about all this, though, is that David Davis and his "Ultra" colleagues simply don't believe any of this will happen. They see themselves playing "chicken" with the EU, in the expectation that Barnier will back down at the last minute.

The thing about playing this "game" though is that you need to pick on something your own size, where the other "player" is able swerve at the last minute. Between London and Brussels, there can be only one winner, leaving the UK in much the same position, metaphorically, as the car in the picture above.

I think it was Monty who said the first rule of war was, "never invade Russia in winter". The first rule of Brexit should be, "never play chicken with Brussels". They don't go in for train metaphors for nothing.