Boris Johnson, Brexit, Data transfers, Michel Barnier, Negotiating, Trade Deals

Brexifornia: Checking out but never leaving

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Brexit will never be over.

Brexit may be “done”, but there is no end state, no finish line, just a never-ending, groundhog day marathon. This even appears to be the case with (what we thought was) the signed and sealed Withdrawal Agreement (WA), the one Boris Johnson negotiated with the EU late in 2019.

One headline in the British press on Sunday read:

“Boris wants to fix unfair Brexit deal.”

But was not this the “oven ready” deal that Johnson told the UK electorate just needed to be “popped into the microwave”?

One government source told journalists: “Unfortunately we couldn’t fix every defect with the Withdrawal Agreement last autumn … we’ll now have to do our best to fix it but we’re starting with a clear disadvantage.”

Why if the UK “knew” last autumn that there were “defects” with the WA did it not take the time to fix them then? Could it be that it was working to a self-imposed deadline that cut short the time and space needed to get the details right?

Negotiate in haste, regret for years. Welcome to Brexifornia, where the UK becomes a state trying to check out of the EU but never quite being able to leave.

To read some commentators or to listen to some Conservative MPs you could be left with the belief that, deal or no-deal, the UK will be finished with the EU on December 31st next and never again will the dirty words “Brussels” or the “European Union” darken UK politics. There will be fog in the Channel and the Continent will be cut-off.

Boris Johnson won the 2019 UK general election with the slogan “Get Brexit Done”. Legally and politically, Brexit has been done. The UK left the European Union on January 31st last. It is no longer a member. Brexit can only be undone if the UK were to reapply for EU membership and as future membership would involve the UK giving up the pound for the euro an application is unlikely to happen anytime soon. However, never say never.

But Brexit has not been done economically and never will be.  For the fact of the matter, dictated by history and geography, is that the UK economy simply cannot uncouple itself from the European continent. Never mind the historical complication that is Ireland.

Calais is 50 kilometres from Dover. 16,000 trucks cross La Manche every day, critical to both industry and supermarket supply chains. In French manche means sleeve. That is all there is between the UK and Europe, a sleeve of water. There are oceans between the UK and anywhere else. You don’t see any trucks crossing those oceans.

Whatever about some manufacturing reshoring as a result of Covid-19, the UK is not suddenly about to start growing oranges, lemons, avocados and all the other foods imported daily from Europe, nor will it be producing Beaujolais, Chianti or Rioja in the near future. At the moment it does not even seem to have the workers to pick its own crops. Still, there is always American chicken, Kentucky or otherwise.

Every year, millions of people take the Eurostar, the Chunnel and the ferries to holiday in France, Spain, Italy and elsewhere. Many more millions do so for business reasons. Hundreds of thousands have holiday homes on the Cotes, Costas and in the Tuscany hills.

The complex legal framework which facilitates such holiday and business travel was made invisible by membership of the EU. While the UK has “Brexited” and left the EU the invisible framework stays in place during the transition period which runs until December 31 next. Thereafter, new arrangements will have to be negotiated and put in place between the UK and all 27 EU member states, individually. There will be no more invisibility. The arrangements will be brutally clear.

It is worth keeping this in mind. Nothing or nobody crosses a border without the permission of the destination country. When the UK voted to “Take Back Control” of its “money, laws and borders” it also handed back control of their “money, laws and borders” to the 27 EU member states. They will exercise that control.

Some of the multitude of “small things” that will have to be renegotiated include the validity of driving licences, motor insurance, health insurance, visa requirements and maybe proof of financial resources to fund the holiday or business trip. Did I mention mobile phone roaming charges?

The rights and obligations of non-EU, British “third country” property owners will also need to be discussed. How EU countries approach these matters will be influenced by how the UK does so. If the UK pushes hard to “control its borders” so will EU countries. There will be no free passes for Brits.

Now, of course, it is in the mutual interest of EU member states and the UK to facilitate travel between their respective territories. But as readers of this Briefing will know only too well, once you open a negotiation you never be sure what long-hidden issues and grievances are going to surface.

Open Pandora’s Box and Pandora tends to go walkabout. And if you are the one who opened the box in the first place you are in no position to complain about what Pandora gets up to once she is out of the box.

These negotiations will not be once-off. Individual countries, and the EU, constantly change their laws. Every time a relevant law changes the impact on “third-country” national, such as the British, will have to be negotiated. Just ask the Swiss what constant negotiation and renegotiation with the EU involves.

Take a business example. How often has a UK executive set up a meeting with a client in Brussels or Paris, booked a Eurostar ticket, and has the meeting the next day? For some, heading off to such meetings is almost second nature. No borders, no problems, no paperwork because today the UK executive is an EU citizen, able to avail of that EU right Brexiteers consider intolerable – free movement.

As an aside, it deeply saddens me as someone who has a great respect for the UK to see Conservative politicians boasting of helping to end free movement. I genuinely think that they do not fully understand that this cuts two ways. If the UK pulls up the drawbridge then EU member states will do likewise.

All of those English people you see on afternoon TV programs buying their “dream” holiday apartment in Spain for €80K or thereabouts can forget about it after December 31 next. Unless they can show that they have the financial resources to sustain themselves without becoming a burden on the Spanish state.

As a yardstick, check out what is required to emigrate to Australia if you are over 45 here. The UK government has said that it is more than happy to have an “Australian” deal with the EU and if that turns out to be the case I suppose EU countries will be free to offer “Australian” residency packages to EU nationals.

Back to our business traveller. Without free movement rights (and, yes, I know that there is a difference between free movement, the right to go and live and work in any EU country, and ease of travel as, for instance, within the Schengen area, but the two are not unrelated) that quick trip to Paris or Brussels becomes a very different matter. Have a look at what is required to set up a business trip to Russia here.

Last February we invited a respected Oxford academic to our BEERG meeting in Brussels. He is Turkish. We had to send a letter of invitation. However, because of a procedural delay in renewing his Oxford contract, since resolved, he wasn’t entitled to travel from the UK to Belgium. The paperwork got on the way of his attendance. Something that none of our UK BEERG colleagues who came to that Brussels meeting had to think about for even a moment.

Oh, and after December 31 next, that laptop and phone you have with you as you travel may come under scrutiny. “Tell me sir”, says the Belgium customs official, “do you have any paperwork with you to show that this is for your personal use during your visit and not for resale?”

As my good friend, Dr Denis MacShane says, there is none so officious as a zealous customs official.

The “Brexit of small things” that will make everyday life more difficult than it is now.

Whenever I make these points to British friends, I am greeted with what I call a surely moment.

“But surely, you are not suggesting that the EU is going to start treating us in that fashion? After all, why would they want to make it difficult for UK visitors/business travellers to go to Europe and spend money there?”

Because, as said above, wherever there are borders you need permission to cross those borders. And the EU did not start the fire. It was the UK that decided to rebuild borders.

In previous Briefings I have made the point that UK citizens of around 70 years of age have spent their entire adult lives in the EU. Anyone under 50, their entire lives. The freedom of movement to travel, live, love and work that the EU makes possible is simply taken for granted. It is just there, like the air that we breath.

But for UK citizens that “EU air” will soon no longer be there. As the French existentialists would say, when you make choices there are consequences and you have to live with those consequences.

Of course, there are the big Brexit issues. The potential for tariffs on goods, supply chain disruptions, barriers to data flows, the end of passporting for financial services, restrictions on UK artists preforming in Europe, non-recognition of professional qualifications, and so on.

And from here on in these will be forever the subject of negotiation and renegotiation, of never-ending negotiations. Not to mention all those fish who can’t make up their minds if they are British or European and insist on moving about.

Take data flows, for instance. Have a read of this recent report from UCL on the issue of the EU/US Privacy Shields and what the political and legal complications around this could mean for Brexit. Suppose, and this is a big assumption, that the UK gets an “adequacy decision” from the EU, effective from January 1 next.

This would mean that data could flow freely from the EU to the UK. But if the Court of Justice of the European Union (CJEU) could invalidate that decision some months down the road because of concerns over British security services data surveillance practices, something that is highly probable. Afterall, this is why the Court struck down the original EU/US Safe Harbour arrangement.

Where this to happen, data flows between the EU and the UK would immediately become illegal. Just how critical such data flows to the UK services sector can be gleaned from this report on Brexit and the UK Services Sector. So, the EU and the UK would immediately have to open negotiations to find a replacement framework because such data flow disruption would be bad for both sides. But, pending the outcome of such negotiations, who knows?

The same will be true of financial services. There are no circumstances is which the EU will agree to any joint authority with the UK over financial services. Why would the EU give a non-EU country, and a country outside the Eurozone, any sort of say in its internal financial ecosystem?

Especially, as we suggested in last week’s Briefing, influential voices on the UK side would be happy to see the EU implode. Indeed, as we were writing this Briefing up popped this Tweet from a UK Tory MP:

Daniel Kawczynski, MP: Always remember our exit from EU is not just for us. We are creating a blueprint for others to follow. No compromise over our sovereignty /judiciary/legislative protocols. We are going to demonstrate over coming decades how much more efficient & accountable a sovereign state is!

Note that it will take “decades” to demonstrate this. But as Keynes once said: “In the long run we are all dead,” so none of us will still be alive and able to say – you were right/wrong all along. It will come as no surprise to readers to know that in the betting stakes my euros are on “wrong”.

Until now, Brexiteers have had an easy ride because Brexit has not economically happened. Yes, UK officials no longer attend EU meeting in Brussels, there are no British MEPs, no UK judge on the CJEU and no UK Commissioner. But your normal voter does not much care about this or worry that UK officials are no longer copied in on EU emails or diplomatic cable traffic.

The great Irish/American Democrat politician, Tip O’Neill said that “all politics is local”.

It is, but all politics is also personal, and it is only when a political issue “cuts through” and hits their own personal lives that citizens react. In the UK, the “Cummings affair”, the breaking of Covid-19 lockdown by Dominic Cummings, Boris Johnson´s top advisor, cut through because so many people had made so many personal sacrifices at great emotional cost. Yet Cummings seemed to be able to flout the rules with impunity. That hurt and has impacted significantly on the public’s perception of the government.

When Reg and Vera from Newcastle find that it has now become a lot more difficult, and expensive, to take their caravan to Saint-Jean-de-Monts in the Vendée, as they have being doing for years, and when they come back they get hit with an unexpectedly large phone bill, Brexit will cut through. Or when Charles and Samantha from Maidenhead find on the eve of their drive to Spain that they cannot take Poochy-Poo because she no longer has a pet passport, Brexit will cut through.

Or when Vince, the London lawyer, has his laptop confiscated as he tries to attend a business meeting in Brussels because he doesn’t have the proper paperwork, Brexit will cut through.

I have seen suggestions that some in the government believe that the economic costs of Brexit will be masked by the costs of Covid-19. Maybe they will. But there are some things that cannot be hidden and cannot be ascribed to Covid-19, such as the need to pay for medical insurance when you travel because the UK is no longer part of the European Health Insurance Card (EHIC) program.

Or the complications of having to take your pet to the vet three months before you travel. Little things in the scheme of things, yes, but things that people experience personally. Things that “cut through”.

In coming years annoyance with the “Brexit of small things” will feed into the big-ticket items. And every time things change negotiations will have to start again to deal with the change.

Ironically, Brexit rather than killing off the EU as an issue has put Europe right at the heart of UK politics. Brexit will never be “done”. Europe is not going away anytime soon. Welcome to Brexifornia.