Richard North, 15/12/2017  

There was probably only one thing of value to come out of yesterday's Treasury Committee report on transitional arrangements for exiting the European Union. That was the acknowlegment that there "remain differences" between the EU and the UK as to the purpose of transitional arrangements.

On the one hand, the EU-27 use the term "transition" and envisage negotiations on a long-term trade deal continuing during the interim period, while the UK is a "third country". On the other, the Government uses the term "implementation". It maintains that the purpose of this period is to provide time to adapt to a trade relationship that will be known and agreed by the end of 2018, when the Article 50 talks are expected to conclude.

The UK position was confirmed the same day in oral questions in the House, when David Davis responded to MPs' demands for clarity over the meaning of this self-same "implementation period".

Hilary Benn was the MP who raised the specific issue, noting that Davis had told the Select Committee that it was the Government's intention to conclude a free trade agreement with the EU by March 2019. Last Friday, however, the Environment Secretary had told the BBC's Today programme that ironing out the details of a free trade agreement and moving towards a new relationship would take place during the transition period.

When Benn asked for confirmation that that was the Government’s new position, Davis replied tangentially – which he so often does – with the answer: "The implementation period will be most valuable if companies know what the final outcome will be, because that will allow them to prepare for it. To that end, we will seek to conclude the substantive portion of the negotiation before then".

So there we have the latest position from the Secretary of State: the UK aims to have concluded "the substantive portion" of the free trade agreement by October of next year.

This is very much in accordance with what Davis told Andrew Marr on Sunday. There would, he said, "be some minor negotiation going, but we'd expect a substantive trade deal to be struck". To this, he added, by way of emphasis, "there will be tinkering but the substantive deal must be struck".

For all that, it cannot be said that Davis is on his own, as illustrated here in an exchange between Iain Duncan Smith and Mrs May during her report on the recent negotiations. IDS asked whether it was still the Government's position that that "implementation phase" which was to follow Brexit "will be used to implement all that has been agreed, and not, as some say, just to carry on with no change at all".

Replying to this, Mrs May said that the point of the implementation period was "to ensure that the changes necessary for the new relationship to work can be put in place", implying that the changes will already have been agreed. You cannot have an implementation period unless you have something to implement.

She then tells Anna Soubry that, "We have always said that we will be working to negotiate our full agreement on the future relationship that we have with the EU. Of course, it will not legally be possible for the EU to sign up to that agreement until after we have left and become a third country, because it is not possible for such an agreement to be signed while we are in the EU".

Yet, from Barnier himself, as recently as two days ago (faithfully recorded by and many others), came the unequivocal assertion that it will only be possible to draw up a "political declaration" on the future framework relationship between the EU and the UK, not a full trade deal.

But this time, he went further, suggested that Davis was being "wilfully optimistic" in his assertion that it would be possible to negotiate a trade deal and then sign it the moment we have left. Barnier told the press that Davis "has experience of European matters, we were ministers of European affairs at the same time … and he knows perfectly what is possible and what is not possible".

Nor is this at all new. We have a European Parliament report from March 2017 which states:
If all goes well, the 27 believe, two years could suffice for the completion of the Article 50 deal and a sketch of the future relationship in a political declaration. That would fit the wording of Article 50, which says the Union should write the withdrawal agreement "taking account of the framework for its future relationship with the Union". The details of the future relationship could then be negotiated during the transitional phase, after Britain leaves the EU.
As the negotiations have developed, we now progress to the supposed "phase two", to be agreed today by the European Council meeting as 27. If all goes as expected, transitional arrangements will be added to the mix and discussions on the future relationship will be held between the EU-27, a process to which the UK will not be invited. And there will be no trade deal on the agenda.

However, despite the clarity from Brussels, the UK government is not alone in its delusions. We also see the likes of Oliver Wright, writing yesterday for The Times, imbibing the Kool Aid.

Mrs May, he told us, was heading to Brussels where she was "expected to use the opportunity both to urge the 27 other nations to quickly set a mandate for trade talks and to reassure them that the government will be ready to make the trade-offs necessary for a deal to work". But the other 27 nations are not going to "set a mandate for trade talks" and to write about any such expectation in such terms is to perpetrate nonsense.

The Times has that much in common with the Mail which also had Mrs May arriving in Brussels "to press the case for trade talks".

ITV News does even better, reporting that "EU leaders are preparing to rubber-stamp the decision to move Brexit negotiations forward to trade talks", wording that the Evening Standard has also chosen to adopt.

Even the self-important BBC, ever-ready to regale the world with its "reality checks", reports that "the European Commission has said 'sufficient progress' has been made on the first phase to move onto discussing the framework of a future relationship between the EU and UK - on issues such as security and trade".

One gets similar imprecision across the Atlantic, in the Wall Street Journal which tells us that "European leaders at a two-day summit in Brussels are set to approve a hard-won divorce deal with the UK that opens up the door to trade talks".

Even where the media are reporting on the actual event following the first day of the European Council, they get it wrong. A classic example is the Independent which late yesterday was headlining: "Theresa May accepts EU plan to postpone real trade talks until March". In fact, what the paper is doing is confusing the framework relationship talks with the trade talks proper – altogether different things.

Before the EU will consider framework discussions with the UK, it wants the UK to provide further clarity on its position – with a deadline set for the March European Council.

As to the actual agenda, Mrs May is still sticking to her own rhetoric, referring to an "implementation period", even though the EU consistently refers to "transition", with Donald Tusk, in particular, referring to an immediate start on negotiating the transition period, with no attempt to prepare a mandate on trade.

The focus on non-existent trade talks, therefore, is redolent of the situation in December 2011, when David Cameron supposedly cast a "veto" on a proposed treaty that had yet to be formulated. Yet this fictional veto was dutifully reported by most of the media as if it had been real. This is how these fantasy issues take on a life of their own and, without a corrective, become part of the historical record.

In this case, though, there will be a corrective. As we creep up to the October deadline when the Article 50 talks are set to finish, it will be impossible to disguise the absence of a trade deal.

No amount of double-speak and delusion from Davis, or his boss May – if she is still in office – will hide the fact that there have been no substantive negotiations and nothing to carry us forward other than transitional arrangements and a political declaration on the framework relationship.

Long before then, one expects that the humiliating transitional terms to have broken cover but, for the moment, they are scarcely mentioned in the legacy media. Today will be the start of that process when the next set of negotiating guidelines are formally approved and published by the European Council.

It will be interesting to watch the responses and start a book running on the time it takes for the penny finally to drop.

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