Richard North, 20/02/2020  
 


And so it goes on, with the Financial Times remarking that the "atmosphere sours" between the EU and the UK, "amid charges of hypocrisy and reneging on agreements".

One has to wonder, though, on which planet the FT has been hiding, if it thinks that only now is the atmosphere "souring". Given the behaviour of the media recently, and the rhetoric from No.10, relations might be better described as glacial- and have been for some time.

Things can hardly be helped by what is being described in some quarters as the "slides war", with the Commission hurriedly publishing a new PowerPoint slide (pictured), along with a rebuttal aimed at countering the snark from the No.10 press office, asserting that the EU has changed its mind on a Canada-type FTA.

The latest slide, however, has immediately drawn criticism as it appears to exaggerate the UK's volume of trade compared with other countries. Of Japan, Politico.EU says:
Its trade volume with the EU stood at some €117.1 billion in 2018, compared with the UK's €516.6 billion. That means the bubble representing the UK should be about 4.4 times larger than the bubble representing Japan. On the EU's chart, the UK bubble is more than 16 times larger than Japan's.
Nevertheless, an unrepentant Commission insists it did not "purposefully" manipulate the chart to exaggerate the differences, haughtily declaring that, "The purpose of today's slide is for information and presentational purposes only".

This non-mistake, however, has given some strands of the media the excuse to focus on the trivia rather than the substantive issues – not that they need much excuse. But that leaves the Commission having to rely on visitors to its website to get its full message across.

The single most important element that the Commission wishes to get over is that the UK is different from its other trade partners, to which effect, it emphasises five points.

In the first, it comes up with the obvious and wearily familiar statements that the UK has left the EU and will leave the Single Market and Customs Union at the end of the transition period, whence it will no longer benefit from the advantages of membership, nor be bound by its obligations.

But, says the Commission, the UK has agreed to have "an unprecedented and broad economic partnership – as a third country – with the EU, with zero tariffs and zero quotas on all goods entering our Single Market of 450 million people, and covering also other areas such as transport and energy". This is set out in the Political Declaration.

For its second point, the Commission states that the EU is "ready to offer this highly ambitious trade deal". On the other hand, though, "the UK cannot expect high-quality access to the Single Market if it is not prepared to accept the guarantees the EU requires to ensure that competition remains open and fair.

There must, it says, "be robust level playing field safeguards to avoid unfair competitive advantages in social, environmental, tax and state aid matters. And, it emphasises: "This is not new. The UK government - and Parliament - agreed this with the EU's 27 Member States less than six months ago".

In point three, the commission asserts that "every trade deal we do around the world has a level playing field element to it, tailored to the specific circumstances of our partners".

This is the case, it says, for Canada, Japan, Korea, where our agreements foresee non-regression clauses and rules on subsidies and safeguards, amongst other provisions. It is also the case for Turkey, Ukraine and the recent institutional framework agreement with Switzerland, which include comprehensive provisions on competition and state aid.

Point four notes that each agreement with a third country depends on a number of different factors, "including distance, and the level and intensity of trade we have with that particular country". All these factors matter and determine the content of the agreement.

For instance, it says, the UK will be the EU's third largest trading partner, with EU-27 imports from the UK worth € 197 billion for 2018. This represents almost 10 times more imports into the EU than Canada. At the same time, Canada is some 5000 km away.

The combined imports from Canada, Japan, and South Korea into the EU for 2018 together (€ 125 billion) are still considerably less than those of the UK alone (€ 197 billion).

That brings the Commission to its final point. Comparing the situation of the UK to other countries, such as Canada, simply does not work, it says:
In the specific case of the UK, the level and intensity of trade is determined as well by its past economic integration with the EU. We have been together with the UK for almost half a century.

This economic interconnectedness and geographic proximity are such that it is in our mutual interest to agree on fair competition standards between us, as well as on their effective enforcement.

This will also be in the interest of British consumers and businesses, as the EU is by far the greatest export market for UK businesses and most UK imports are from the EU.
In what could in part be an outtake from my post yesterday, the Commission then goes on to say that the European Council has been clear since its initial guidelines on Brexit (April 2017) that it would only be prepared to consider a future trade deal with the UK if accompanied by strong level [playing] field guarantees, beyond what the Union has required in its FTAs with partners such as Japan or Canada.

The European Council, it says, set this requirement based on the specific circumstances of the EU-UK relationship, characterised by geographic proximity and by the degree of interdependence and economic connectedness generated by more than 45 years of UK integration into the EU.

These circumstances, we are told, position the UK very differently from other trading partners, including in terms of the benefits the UK would be able to reap from the broad and ambitious economic partnership that we plan to negotiate. 

The principle of robust level playing field guarantees, the Commission then says, was already agreed by both Parties in the Political Declaration, where it is clearly outlined in paragraph 77 under the heading "Level playing field for open and fair competition".

Interestingly, it quotes verbatim exactly the piece I included in yesterday's post, making it abundantly clear that the UK has put its name to an agreement to accept level playing field provisions.

Unsurprisingly, the FT sides with the Commission. Arguably, it says, Downing Street that is being disingenuous about what kind of trade deal can be struck with the bloc, telling us that the Commission's new slide "will underpin the EU’s arguments for ensuring fair competition clauses in any trade deal".

Elsewhere, Frost has been described as a man "who uses Singham and Martin Howe". Says one senior source: "The speech was, to be kind, meretricious; to be unkind, dismal". And yet, a former Foreign Office colleague describes the speech as "an intelligent exposition of his view on the EU and an important explanation of Brexit thinking in the new UK government". The ex-colleague evidently is not concerned about the questionable grammar, poor punctuation and dubious historical claims.  

This puts the UK in a very difficult position. Negotiating for "Team UK" is a very tough job indeed at an exceptionally difficult time. Sloganising does not get you anywhere. The other side are not idiots. And they have experienced and wily operators.

But, as they now say in Whitehall, never mind the quality – just watch the PowerPoint.






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