Tuesday

19th Jun 2018

Column / Brexit Briefing

UK presses the Brexit pause button

  • Playing hard to get on the financial settlement is one of few trump cards available to Davis and his team. (Photo: European Commission)

Having spent the week playing a diplomatic game of ‘call my bluff’, EU chief negotiator Michel Barnier’s frustration was palpable at Thursday’s (20 July) press conference that sounded the bell for Round Two of the Brexit talks.

“We make better progress when our respective positions are clear,” was Barnier’s scarcely coded warning to the UK government.

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It was telling, however, that UK Brexit minister David Davis and his team were far more sanguine about the achingly slow progress. If UK ministers were pursuing a ‘hard Brexit’ – prepared to walk away without any deal on single market access from March 2019 – there would be a greater sense of urgency in Whitehall and on the part of Davis.

EU negotiators had hoped that delaying talks on a successor trade deal until the divorce bill had been agreed would create that urgency. The UK, after all, does have more to lose from falling out of the EU in spring 2019 without any agreement on the future.

Instead, the position papers published so far by the Departing for Exiting the EU – on Euratom, citizens’ rights, and the role of the European Court of Justice – have been painfully thin on detail, while nothing has been committed to paper about the methodology for the divorce bill, let alone how much the UK is willing to hand over.

Blank canvas by design

When it comes to the financial settlement, the UK’s blank canvas approach is entirely by design. It will be difficult for ministers to explain why taxpayers have to fork out another €60-€80 billion to Brussels after the ‘Leave’ campaigners promised that exiting the EU would mean an instant £10 billion dividend for the UK economy.

Playing hard to get on the money is also one of few trump cards available to Davis and his team. It’s much better for them to wait for the EU to name a figure that can be haggled over.

In any case, decades of watching British prime ministers being at the centre of late-night haggling over EU budgets should have made us understand that agreeing on the Brexit divorce bill would be slow and painful.

If detail and clarity on the UK’s position is still in desperately short supply, one post-election development is that a consensus has formed among ministers that a 2-4 year transitional arrangement will be needed after the March 2019 cut-off date.

Anxious at the lack of clarity emanating from May’s ministers, particularly since the June 8 election, the business lobby has ramped up the pressure in recent weeks.

It appears to have borne fruit.

Business push-back

Following Thursday’s first meeting of the new business leaders’ council – including executives from Tesco, Unilever and BAE Systems – that is set to meet regularly with Theresa May to discuss the government's Brexit plans, the prime minister’s spokesperson told reporters that May had talked about the need to have a transitional period.

Having been given the green light from 10 Downing Street, ministers then briefed that single market access and freedom of movement would continue after 2019.

Deciding to give business and government extra time to adapt, in turn, reduces the pressure on Davis to make rapid progress on the trade component of the talks.

A UK-EU trade agreement “should be one of the easiest in human history”, said international trade minister Liam Fox on Thursday (20 July).

Fox – who met World Trade Organization (WTO) boss Roberto Azevedo to set out his plans on the trade deals he hopes to strike post-Brexit – had been one of the main government voices against a transitional deal, but now appears to have fallen in line with the new consensus.

One way that the EU could wrest back the initiative would be to set a strict limit of the transition period. The European Parliament’s resolution has suggested a three-year limit: that would re-set the "cliff edge" to 2022. A shorter transition would make the UK side less able to drag their feet on the finances and citizens’ rights.

"Nothing is agreed until everything is agreed" is a common refrain used by officials during so-called trilogue negotiations, between the three main law-making EU institutions, on regular EU directives and regulations.

It signifies that both ministers and MEPs know what the final deal will look like, but neither side is prepared to compromise yet on the major items.

That’s probably where Davis and Barnier are now and, much to the chagrin of the negotiators and reporters covering the talks, there’s precious little sign of a breakthrough any time soon.

Benjamin Fox, a former reporter for EUobserver, is a freelance writer.

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