Article 50, Brussels, Michel Barnier, Negotiating, Theresa May

You Can’t Always Get What You Want #Brexit

Written on Sunday December 17, 2017

Hammond BoJoOn Friday (Dec 15), the EU Council agreed that “sufficient progress” had been made to date to allow the exit talks between the EU and the UK to be expanded to include discussions on the “framework” of the future relationship between the UK and the EU.

This BEERG Brexit Briefing argues that, just as the EU dictated terms in phase 1, it will continue to dictate terms as the process continues because both the dynamics of the process and the hard economic realities favour the EU.

Why? Because as the Dubliners of my youth would have put it: “Beggars can’t be choosers”. In EU terms, it is the UK, and not the EU, that is the “demandeur” and demandeurs “can’t always get what they want”.

Remember, the UK decided to leave the EU. It was not asked to leave nor was it expelled. Generally in life you cannot unilaterally decide to leave a job, business organisation or sporting association, and then try to insist on negotiating the terms under which you will leave. Leave means leave. Leave does not mean “lets compromise and meet in the middle”.

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Article 50, Brexit, Brussels, Juncker, Michel Barnier, Negotiating, Theresa May

Not so Much a Marathon… More a Triathlon #Brexit

Written on Friday Dec 8th:

may junckerEarly this morning, Friday, December 8, the EU and the UK announced that they had reached terms on the three Article 50 issues which cover: the UK’s ongoing financial obligations to the EU; the rights of EU citizens in the UK; and issues relating to Ireland.

The EU Commission said that the agreement reached was sufficient to allow it to recommend to the EU Council (heads of government) next week that the talks proceed to phase 2, namely discussions on the “framework” of the UK’s future relationship with the EU.

Reading the various documents that have been released today it is hard not to come to the conclusion that the UK appears to have accepted the EU’s terms on all three issue. Outstanding payments from the UK to the EU are not conditional on any sort of future trade deal and will continue long into the future as commitments made by the EU28, of which the UK was a part, fall due. On citizens’ rights the European Court will have a role in defending the rights of EU citizens resident in the UK for eight years after Brexit, a political lifetime. On Ireland, the default position is no hard border.

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Article 50, Brexit, David Davis, GDPR, Irish border, Michel Barnier, Theresa May

Still a (very) Long and Winding #Brexit Road Ahead

This Briefing was written on 3rd Dec 2017

7EEC154E-1C26-4BA9-BD46-6E7E326308E2As we write this Briefing, early on Sunday Dec 3, it would appear that the EU and the UK are moving towards a position where the EU Council (heads of government) at its next meeting on December 14/15 will be able to declare “sufficient progress” in the Article 50 discussions to date to allow them to move on to the next stage, which will focus on the “framework” of the UK’s future relationship with the EU.

However, as one diplomat put it, until we see what has been agreed “on paper” rather than “in the papers” it is wise to withhold judgement. But it does seem that the logjam on citizens’ rights has been broken by the UK conceding an ongoing role for the Court of Justice of the European Union (CJEU) in upholding the rights of EU citizens resident in the UK after Brexit.

The UK has also agreed to meet all its outstanding financial obligations to the EU, estimated at around €50 billion net, while accepting that this money does not buy a future trade deal of any type, even if, for the moment, UK cabinet ministers are not exactly making that clear to MPs in the House of Commons. Continue reading

Article 50, Brexit, British Government, Brussels, Divorce, Northern Ireland

#Brexit: A Moment of Truth Fast Approaching

Written on Sunday Nov 26th.

Brexit4After we wrote our weekly Brexit Briefing last Friday, the news broke that the European Union (EU) had given the UK until Monday, December 4, to table revised and meaningful proposals on the three Article 50 issues, the rights of citizens, the “Irish question” and meeting financial obligations if it wishes the EU27 to agree at their December summit to move the talks to discussing the future relationship between the two parties. As Politico noted:

European Council President Donald Tusk set an “absolute deadline” of December 4 for the U.K. to submit a revised offer on the Brexit bill and a credible solution for the Irish border, telling U.K. Prime Minister Theresa May on Friday that otherwise it would not be possible to move on to the second phase of talks, a senior EU official said.

The official said May had accepted the timeframe, and that Tusk warned her if London misses the deadline, the European Council would not be able to declare “sufficient progress” at its December summit.

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Brexit, British Government, Brussels, Irish border, Northern Ireland

Break, for the Border #Brexit

This blogpost was written on Nov 24th, 2017

welcometoniThe week opened with the UK cabinet agreeing that it would offer more money to the EU to settle its financial obligation triggered by its decision to leave but only on condition that the EU would agree to now move to talks about the future relationship and that the money would only be paid over when a trade deal was actually signed. This is an offer that, by Friday, even the ultra-Brexit supporting newspaper, the Telegraph, was admitting would be rejected by the EU.

The week closed with howls of rage from British politicians, often Brexit supporting, when the EU announced that UK cities were to be excluded from consideration from the prized European Capitals of Culture competition for 2023. An example of the EU punishing the UK, Brexiters argued, apparently ignorant of the rules that only cities from EU, EEA or applicant countries can be so nominated. Why would the EU subsidise cultural activities in a city in a country that had left the EU?

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Article 50, Brexit, British Government, Negotiating, Theresa May

#Brexit, a Dickensian example of: “Please sir, can I have less?”

This article was written on Oct 29, 2017.

Sir-Ivan-Rogers-776583If the absence of economic rationality, as a driving force behind Brexit, was ever in question, comments this week from three very different speakers should put an end to the doubt.

First, the French ambassador to the US, Gerard Araud tweeted:

“Maybe I am too cartesian but leaving the largest free trade area in the world and 53 free trade agreements on behalf of free trade is weird.”

Indeed, much too logic. But that’s the French for you.

Second, Michael Bloomberg, the billionaire founder of Bloomberg and former mayor of New York commented:

Brexit is the “single stupidest thing any country has ever done…it is really hard to understand why a country that was doing so well wanted to ruin it”

Third, and most significantly, speaking to a House of Commons committee, Sir Ivan Rogers, the former UK ambassador to the EU (Photo above with David Cameron), who resigned earlier this year after warning against “ill- founded arguments and muddled thinking” in the UK’s approach to leaving the EU, said:

You cannot know how long a free trade deal discussion will last until you get into it. I have lived through a number of them, including the Canadian one, which we all thought was relatively straightforward, which we kicked off in about 2009, and it still is not in force; and they are one of the more simple partners. You cannot know until you get there. There are things that are simpler with us than with Canada simply because we have been in the organisation. There are things that are more difficult because we are a diverging partner rather than a converging partner.

All trade deals in history are struck between people that are trying to get closer together. This is the first trade deal in history struck between partners who are trying to get further apart. There are some things that are simpler because they know us better and we have been part of their organisation and, by definition, there is a huge degree of regulatory convergence and they know our regulation but we are obviously going to diverge to some extent, and the question that is politically live, including in this House, will be how far we diverge. (Our underlining).

I would take issue with Sir Ivan’s comment that the two sides are trying to get “further apart”. It is just the one side, the UK, that wants to make the break. But apart for that, what he says is right.

Normally, the parties to a trade deal believe the conclusion of the deal will be win-win for all, making them better off than they are now, boosting trade between the parties, enhancing business opportunities rather than limiting them. Getting closer together rather than “trying to get further apart”.

But in deciding to leave the EU, the single market and the customs union the UK will not be better off than it is now. As Sir Ivan said earlier in his remarks to the committee:

… from other capitals often it is read as meaning the Brits would rather like the benefits of three of the freedoms whilst suspending or ending the fourth freedom. The Brits would rather like to have continued, largely unchanged, market access in all the areas that they want, and see no reason why that market access should be diminished…
But if that is what the “Brits” would like, they are not going to get it, Sir Ivan continued:

… The Brits need to understand that there will be a radical difference as a consequence of exiting, in terms of levels of market access in multiple sectors that they care about.

… The British cannot simply expect the world to carry on broadly as is. They cannot suspend free movement of people because that is no longer applicable to them, live outside the jurisdiction of the Court of Justice, but still have everything that they liked about the levels of market access when they were inside the venture.

Given his long experience of the EU, Sir Ivan knows what he is talking about, which is probably a lot more than can be said for many members of the government and many leading Brexiteers.

If Britain cannot expect to have as good terms outside the EU as inside, how does it go about negotiate a lesser deal than the one it has now? The answer, in all probability, is that it can’t. How can the UK government turn around to the motor industry, the pharmaceutical industry, the food industry or the chemical industry and tell them that the agreement it has just negotiated with the EU will put more obstacles in their way when exporting to the EU? More paperwork will be required, more customs checks, longer waiting times at borders will all be part of the new deal.

Read Sir Ivan’s remarks, quoted above, closely. Better still, read the full script of his testimony to the House of Commons committee, which can be found here.

While diplomatically couched, he is saying that if you think the Article 50 negotiations on the financial settlement, citizens’ rights and Ireland are difficult, wait until you actually get to the trade talks. They will be brutal and bloody. Because, as we noted in last week’s blog, what the “Brits” want is to move from a marriage to a “friends with benefits” arrangement and there are no circumstances in which the “jilted” EU will agree to such an arrangement, where the UK gets all the benefits it wants but incurs none of the costs.

Further, Sir Ivan, along with his two fellow panellists, clearly makes the point that the UK government is deluding itself if it thinks that a DCFTA, a “deep and comprehensive free trade agreement” in the Brussels jargon, will be agreed before March 2019, to be followed by a two-year transition period, or “implementation phase” as UK Prime Minister, Theresa May, insists on calling it.

At best there will be an agreement, as part of the Article 50 process, to negotiate a DCFTA during the transition period, by which time the UK will have left the EU. All the transition period does it to buy two more years before Brexit bites.

It is not “hard” Brexit or “soft” Brexit. It is just slow Brexit. Because it will be impossible to negotiate such a DCFTA within the two-year transition. At the end of the two-year transition the UK may still find itself without a trade agreement with the EU.

The UK has gotten itself into an impossible negotiation. The structure and the timetable of the negotiations, which they agreed to, plays against them. The clock ticks remorselessly down. The negotiations open with the UK having all it wants; free and frictionless trade with the rest of the EU. But the price of that trade is the free movement of people, a price the UK no longer wants to pay. If it won’t pay the price, it can’t have trade on frictionless terms. What does it give up as the price of ending free movement?

How do you ask for less in a negotiation?

Those of you of a certain age will well remember the scene from the movie Oliver in which Oliver, approaches the top table in the workhouse and, holding out his bowl, says “I want some more”, to the outrage of Mr. Bumble, who runs the workhouse. Theresa May and David Davis are now both holding out the UK’s bowl to Juncker, Barnier and Tusk and the EU 27 and saying: “We want a lot less than we now have”.

Just how do you negotiate that?

Article 50, Brexit, Divorce, Negotiating, Theresa May

On #Brexit: You can’t always get what you want…

This BEERG Brexit Briefing (#16) was written on Sat Oct 21, 2017

Hammond BoJoWords and phrases can shape reality.

How we describe an issue or event can determines how that issue or event is to be understood. Such “framing” can be particularly important when we are dealing with some something unique, something that has never happened before. How do you describe the unknown? How do you explain the unprecedented?

One way of doing so is to compare the unknown to something known and familiar. This, in the UK at any rate, is what many journalists, commentators and academics have done when writing about Brexit, an unprecedented and unknown event. They have taken to describing the Article 50 discussions between the EU and the UK as being akin to divorce proceedings, with the key argument being about money: how much will the UK have to pay the EU as part of the “divorce settlement”?

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