The Brexit Transition Period Will Be Extended
Perhaps it was unrealistic for Barnier to have expected the UK to engage seriously with the trade-offs and concessions that are essential to a long-term trade agreement while Johnson was in the hospital. Brexit is Boris’ big thing. He made it. Other Tory ministers have no leeway to make Brexit decisions without his personal imprimatur. He has purged the Conservative Party of all significant figures who might have advocated a different vision of a post-Brexit trade agreement with the EU.
The point of Barnier’s intervention is that now Johnson is back at work, he will need to give clear strategic leadership to the UK negotiating team. If he fails to do so, we will end up on January 1, 2021, with no post-Brexit deal on future relations and an incipient trade war between the UK and the EU — and Ireland will be on the front line.
The scars left by the COVID-19 pandemic will eventually fade, but those left by a willfully bad Brexit — whether brought on deliberately or by inattention — may never heal. This is because a bad Brexit will be a deliberate political act, whereas COVID-19 is just a reminder of our shared human vulnerability.
No Draft Proposal on Future Relations
In 2019, Johnson signed up to an EU withdrawal treaty to allow the UK to leave the union. This legally committed the UK to customs, sanitary, and phytosanitary controls between Britain and Northern Ireland, so as to avoid checks of goods between the north and south on the island of Ireland. So far, Barnier says he has detected no evidence that the UK is making serious preparations to do this. An attempt by the UK to back out of these ratified legal commitments would be seen as a sign of profound bad faith.
Barnier said that negotiating by video link due to the pandemic was “surreal,” but that the deadlines to be met are very real. The first deadline is the end of June. This is the last date at which an extension to the transition period beyond December 31 might be agreed upon by both sides. While the EU would almost certainly agree to this, there is no sign that the UK will. Tory politicians repeatedly say they will not extend.
This tight deadline would be fine if the UK was engaging seriously and purposefully in the talks. But, according to Barnier, the Brits have not yet even produced a full version of a draft agreement that would reflect their expectations of future relations between the UK and the European Union. The EU, on the other hand, produced its full draft weeks ago. Without full texts of the proposals, it is hard to begin real negotiations.
So far, the UK has only produced portions of the proposed treaty. The UK insists that Barnier keep these parts of the draft UK text secret and not share them with the 27 member states of the EU. Giving Barnier texts that he cannot share with those on whose behalf he is negotiating is just wasting his time. It seems that UK negotiators are adopting this strange tactic because they have no clear political direction from their own side. They do not know whether these proposals are even acceptable in the UK.
In the political declaration that accompanied the EU withdrawal deal, Prime Minister Johnson agreed that his government would use its best endeavors to reach an agreement on fisheries by the end of July. This would be vital if the UK fishing industry were to be able to continue to export its surplus fish to the EU. Apparently, there has not been serious engagement from the British side on this matter either.
Level Playing Field
The other issue on which Barnier detected a lack of engagement by the UK was the so-called “level-playing-field” question. The EU wants binding guarantees that the UK will not — through state subsidies or via lax environmental or labor rules — give its exporters an artificial advantage over EU (and Irish) competitors.
This issue is becoming a difficult issue within the EU itself. In response to the COVID-19 economic downturn, some wealthier EU states (like Germany) are giving generous cash/liquidity support to the industries in their own countries. On the other hand, EU states with weaker budgetary positions (Italy, Spain and perhaps even Ireland) cannot compete with this.
It is understandable that temporary help may be given to prevent firms from going bust in the wake of the economic disruption. But what is temporary at the beginning can easily become indefinite, and what is indefinite can become permanent. Subsidies are addictive.
The reason we have a common agricultural policy in the EU is that when the common market was created, nobody wanted rich countries to be able to give their farmers an advantage over farmers in countries whose governments could not afford the same level of help. The same consideration applies to industry. Subsidies should be equal or they should not be given at all.
State aid must be regulated inside the EU if a level playing field is to be preserved. To make a convincing case for a level playing field between the European Union and the UK, the EU side will need to show it is doing so internally. This will be a test for President Ursula von der Leyen as a German commissioner.
Will COVID-19 Hide the Pain of Brexit?
Which way will Johnson turn on the terms of a deal with the EU? It is unlikely he will look for an extension to the transition period beyond the end of this year. He wants a hard Brexit, a clean break as he would misleadingly call it, but he knows it will be very painful. He probably thinks the pain of a hard Brexit — or no agreement at all on future relations — at the end of December will be concealed by the even greater and more immediate pain of the economic slump caused by the COVID-19 pandemic. Brexit will not be blamed for the pain. But if the transition period is postponed until January 2022, the Brexit pain will be much more visible to voters.
The Conservative Party has become the Brexit Party. It is driven by a narrative around reestablishing British identity and is quite insensitive to economic or trade arguments. It wants Brexit done quickly because it fears the British people might change their minds. That is why there is such a mad rush. It is not rational — it is imperative.
The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.