Richard North, 25/10/2017  
 


The deadly duo – Messrs Tusk and Juncker - were in Strasbourg yesterday, updating MEPs (the few who were listening) on last week's European Council.

The UK media did its best to harvest the speeches for local interest, but they had to work quite hard to do it. The Juncker intervention on Brexit ran to one short paragraph:
I would like to say that the Commission is not negotiating a hostile mood. We want a deal. Those who do not want a deal - the no-dealers - they have no friends in the Commission. We want a fair deal with Britain and we have a fair deal with Britain. The no-deal is not our working assumption.
This was seen as Mr Juncker on the attack, with the Independent headlining: "EU president Jean-Claude Juncker attacks 'no dealers' who want talks to fail".

Mr Tusk didn't offer very much more of substance. Mainly, he focused on the ability of the EU to "build and maintain unity among the 27". But "ahead of us", he said:
… is still the toughest stress test. If we fail it, the negotiations will end in our defeat. We must keep our unity regardless of the direction of the talks. The EU will be able to rise to every scenario as long as we are not divided. It is in fact up to London how this will end: with a good deal, no deal or no Brexit. But in each of these scenarios we will protect our common interest only by being together.
Much of the media attention was given to this, with the likes of the Independent again in full flow. It headlined: "Brexit can be stopped by UK, European Council president Donald Tusk says".

The assumption is that Tusk was saying that the Article 50 notification could be revoked but what I found more interesting was that he offered three options: "a good deal, no deal or no Brexit". He did not, like the disingenuous Lee Rotherham add a fourth – the so-called "no-deal deal", championed by the "Ultras" as their "get out of jail free" card.

With clearly stating as much, Rotherham relies on regulatory convergence as the free pass which gets us into trade with EU Member States, thereby making an error common to his ilk, failing to understand that this is just the starter for ten.

His "big idea" is that, we and the EU conform to many standards set at global level and these will only be technical barriers to trade where there is "a marginal hint of legal ambiguity" in the issues covered. These, however, can happily be resolved by signing off "a bag full of MoUs" (Memoranda of Understanding).

In the context to which Rotherham applies them, it would seem that MoU are treaties in their own right. Thus, this man's remedy for failing to sign a "central Big Deal" – the "no deal" scenario – is to sign hundreds of "little deals" with the EU.

Why anyone should think that the UK could walk away from the Article 50 talks with the EU, and the EU would then welcome it back to make a series of side deals - which side-stepped the core issues which occasioned the walk-out – is simply not explained.

As it stands, in the increasingly unlikely event that we settle the phase one issues, we will be able to move on to discuss "transition" and the framework for the future relationship. At that point, we will not be concluding a free trade agreement, so there is very little to walk away from. To reject a time-limited transitional agreement could only do us harm.

Nevertheless, there are certain points when the UK might be tempted to walk away. The first would arise if (or when) the European Council refuses to authorise its negotiators to move to phase two. We then "walk", without committing to pay into the EU budget, settling the rights of EU expats, or sorting out the Irish border.

At that point, it would seem, either the EU approaches us (because they need us more than we need them) or we contact Brussels – and pick up the thread with a series of side deals. Conveniently, the EU decides to forget about the phase one issues from which we have walked away.

The second possibility is – despite the potential harm – that we walk away from the transition agreement. The trigger here might be the insistence on full conformity with the EU acquis or the continued oversight of the ECJ. But should we decline the EU terms, expecting then to come back and agree "a bag full of MoUs" covering much the same territory would, on the face of it, seem rather optimistic.

However, as of Monday, Mrs May has committed to walk away if we do not conclude a free trade agreement by the time the Article 50 period has ended. And since M. Barnier – on the back of impeccable logic – has said there will be no agreement to sign, it seems that the UK is poised to depart without a deal, and without transition agreement.

Even the Express has now woken up to this conflict, although it has yet to understand the consequences.

At that point, we will have UK negotiators walking away because an agreement is not complete. But if we then follow the Rotherham, logic (if it can be called that), our hard-pressed negotiators have to return to Brussels to discuss the completion of the self-same agreement – but without the cover of a "transition" period. To walk away under these circumstances, I believe, is known technically as cutting off your nose to spite your face.

Small wonder, businesses are complaining about the confused messages they are getting. The Chancellor is saying one thing and the Prime Minister another, while the "Ultras" chip in with the Lee Rotherham inanities.

As an aside, we see that John Redwood has caught up with this blog in asserting that: "You cannot have a transition unless you have in place an agreement about a new relationship which you are then going to move to. As the EU is not yet willing to negotiate a new relationship the idea of transition is premature. No relationship agreement, no transition".

The crucial element, therefore, lies in the definition. As we have remarked previously, we should be looking at "stop gap" or "interim" measures, to tide us over until we do have an agreement. It would help if the Commission sought to use the correct terminology.

That apart, Reuters is reporting the steady ebbing away of confidence in the business community, "spooked" by the recent intervention of Mrs May.

A spokesman for May tried to provide more clarity yesterday, saying Britain hoped to agree a broad framework for its transitional trade agreement quickly, but declined to say when such a deal might be reached.

Reuters then spoke to Catherine McGuinness, the political leader of the City of London. She says: "It is incredibly disheartening. Clarification around a transition so late in the day will be like closing the stable doors once the horse has bolted".

"May consistently says a transition ... period will be agreed because she truly believes she will have an agreement on a future trade deal by March 2019", said a banker at a major international lender, who then added: "She is the only person in the entire world who believes that is possible".

And therein lies perhaps the real story – a Prime Minister who is almost daily demonstrating her own incompetence. Even for best, it would be difficult as we see reported that Brexit is "more complex than the first moon landing". In terms of system planning, it is hard to disagree with that, and one cannot help feel that Mrs May is taking on too much.

Such is the magnitude of this endeavour that we should almost be approaching it on a level of wartime planning, with party politics temporarily suspended. In this current, fractious environment, there is no likelihood that people will work together to provide what is needed.

So, it seems, we are doomed. Breaking through the noise level and overcoming the stupidity and the institutional inertia seems now to be beyond human capability. We either need a miracle – or substantial emergency stocks of food. I'm opting for the latter.






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