Richard North, 16/12/2017  

As expected, the European Council yesterday decided to open what Donald Tusk called "the second phase" of the Brexit negotiations.

Also as expected, work on all withdrawal issues left over from phase one has to be completed. In addition, the transition arrangements have to be agreed. But that's it. There is nothing else until the March Council when, all being well, guidelines for the framework relationship will be produced.

Bearing in mind that the transition period was not originally part of the plan – and not formally introduced until after Mrs May's Florence speech - only by some perverse definition could this next part of the talks be called phase two. More realistically, it is phase one-plus – covering all the previous issues with one addition, the Council's transition proposals.

Details can be found in the final guidelines comprising three pages (without the cover sheet), nine paragraphs and approximately 750 words. They have survived mostly unchanged from the draft guidelines seen last week.

Crucially, paragraphs three and four, on the transition arrangements, have been repeated almost intact. In para three, the European Council notes the proposal put forward by the UK for a transition period of around two years, and agrees to negotiate on this.

However, the EU is demanding that during the period, the UK must obey the whole of the acquis. Meanwhile, as a third country, the UK will no longer participate in or nominate or elect members of the EU institutions, nor participate in the decision-making of the Union bodies, offices and agencies.

Here, there is a slight change from the draft, which referred to "EU institutions". Just to make it clear, this is extended to "Union bodies, offices and agencies".

And with that is spelt out the degree of humiliation which we are expected to accept. Stripped of all representation, for the two years of the transition period (or for however long it takes), we truly become a vassal state. Unlike the EEA where would have had substantial influence on the running of the EU, we are condemned to the worst possible outcome where our only option is to obey.

In paragraph 4, this humiliation is spelt out in more detail. The EU would have it that the transitional arrangements will be "part of the Withdrawal Agreement" – even though the provisions extend past what Article 50 would seem to allow. But that makes the arrangements part of a treaty obligation, from which there must be no deviation.

The arrangements must be clearly defined and precisely limited in time – with the word "precisely" a later addition. And, unlike most treaties - which are negotiated for the mutual advantage of all parties – the one-sided nature of this deal is there for all to see. It "must be in the interest of the Union", the guidelines say.

Furthermore, this draconian regime extends into the future, to cover areas as yet unspecified, giving the EU a carte blanche for the entire period. "In order to ensure a level playing field based on the same rules applying throughout the Single Market", the guidelines say, "changes to the acquis adopted by EU institutions, bodies, offices and agencies will have to apply both in the United Kingdom and the EU.

So the misery goes on. All existing Union regulatory, budgetary, supervisory, judiciary and enforcement instruments and structures will also apply. The extent is made clear by a later addition not found in the draft. That, we are told, includes "the competence of the Court of Justice of the European Union".

There is then another less than subtle change. In the draft, the UK would "remain a member of" the Customs Union and the Single Market (with all four freedoms) during the transition. This has now been changed. Membership confers rights as well as obligations and the EU is not prepared to tolerate that. We are simply going to be allowed to "participate".

In another change, we see an important addition, with the requirement that we continue to comply with EU trade policy – thus preventing us signing up to third country trade deals for the duration. And we must apply EU customs tariffs and collect EU customs duties (thereby remitting about £2 billion a year to the EU), and ensure that all EU checks are being performed on the border vis-à-vis other third countries.

To all intents and purposes, for the entire transition period, we remain in the EU – but on the worst of all possible terms. We may escape the queues at Dover and all the other problems for the time being (if only to confront them again when the transition period is over) but, on 29 March 2019, we see Brexit in name only. We will not actually leave, at the earliest, until 29 March 2021 – with just a year to go to the general election, if Mrs May is still in office.

And, if this is the worst of what we must accept, that is only a matter of degree. The Union negotiator and the UK must complete work on the (phase one) withdrawal issues, including those which have not yet been addressed. The parties must then consolidate the results obtained and start drafting the relevant parts of the Withdrawal Agreement.

This, one must appreciate, is not kindly advice. Further negotiations are entirely conditional on this. They can "only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully into legal terms as quickly as possible". Furthermore, the European Council guidelines of 29 April 2017 "continue to apply in their entirety and must be respected".

As to Mrs May's trade deal, the blunt language of the guidelines is uncompromising. An agreement on a future relationship can only be finalised and concluded once the United Kingdom has become a third country, it says.

The Union will only "engage in preliminary and preparatory discussions with the aim of identifying an overall understanding of the framework for the future relationship, once additional guidelines have been adopted to this effect". Such an understanding "should be elaborated in a political declaration accompanying and referred to in the Withdrawal Agreement".

By paragraph seven, the language then gets even more compromising, with another change to the text from the draft. Originally, it said that the UK had "stated its intention to leave the Customs Union and the Single Market after the end of the transition period". But now the intention is "to no longer participate".

So we leave the Customs Union and the Single Market on 29 March 2019, but continue participating in them until the end of the transition period. Further trade and economic cooperation will then be "calibrated" in the light of this position.

In all of this, the EU's objectives are to ensure a balance of rights and obligations, preserve a level playing field, avoid upsetting existing relations with other third countries, and to respect all other principles set out in its guidelines of 29 April 2017, in particular the need to preserve the integrity and proper functioning of the Single Market.

If we ever get that far, bearing in mind that the Irish question will be almost impossible to resolve, the chances of negotiating a comprehensive trade deal in the two-year transition period are next to nil.

Interestingly, at the conclusion of the European Council yesterday, Jean-Claude Juncker refused to comment. But there was no need – the guidelines told us all we needed to know, and spoke for themselves. And there is more to come.

The European Council will adopt additional guidelines in March 2018, "in particular as regards the framework for the future relationship" and meanwhile calls on the UK "to provide further clarity on its position on the framework for the future relationship". That's as near as we'll get to trade talks.

The Council of Ministers will continue internal preparatory discussions, "including on the scope of the framework for the future relationship" and the Commission will put forward "appropriate recommendations" on the management of the transition, and the Council will "adopt additional negotiating directives" on the arrangements in January 2018.

Yet, for all that, the media response is patchy. Gary Gibbon, political editor of Channel 4 sees this as "news which Theresa May can put under the Christmas tree". At least the Guardian has noticed something is amiss, reporting that this "deal" leaves Britain "as an entirely captive supplicant until at least April 2021".

In broad terms, though, the guidelines say just one thing. The UK has been shafted – the only thing we don't get is the orange jump suit. The stupidity of Mrs May and her advisors and all those precious little groups of intellectual pygmies who eschewed the "Norway option" have led us down the path to perdition, the very outcome we could have avoided by re-joining Efta and staying in the EEA.

In the annals of stupidity, this ranks alongside the Charge of the Light Brigade, even if the survivors are going to walk away alive. By the time this has finished, they may well wish the Russian guns had mown them down.

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