LEADING THE WAY OUT OF THE EU

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Tuesday 16 January

Transition out of the EU is by definition supposed to consist of some elements of independence. The EU’s leaked negotiating directives say otherwise. 

The EU27 have drawn up new negotiating directives to guide their chief negotiator Michel Barnier over the course of talks towards a transitional arrangement. If the terms are accepted by Theresa May’s government, EU citizens settling in the UK after Britain has left in March 2019 will still be legally entitled to permanent residency. Free movement and the right to so-called “settled status” will only end when transition does, but with last week’s revelation that ambassadors from the member states have been plotting to push transition beyond December 2020 as originally earmarked, Brexiteers will have every reason to be concerned.

During the transition, Brussels is also set to have the power to obstruct Britain’s trade ventures into the wider world and fisheries will remain subject to the ruinous Common Fisheries Policy. December’s withdrawal agreement with the European Council, which signalled the end of phase I and the dawn of phase II, trade, was supposed to be a point of no return. It was the EU that went apoplectic over comments by David Davis that Britain could roll back on the pledges of cash and regulatory convergence if an adequate trade deal did not materialise.

But in Euroland, some are more equal than others. An EU official quoted by the Times had the gall to turn Brussels’ own mantra on the UK: “The British always tell us that nothing is agreed until everything is agreed. Here is an example of exactly how that works in practice,” he said.

“The deal in December did specify March 2019 for free movement rights. That was then. Now, as part of the discussion on transitional arrangements that has changed.”

Not worth the paper

The EU’s cover for this outrageous tear up of the withdrawal agreement Theresa May sacrificed so much for is the following clause:

“This does not prejudge any adaptations that might be appropriate in case transitional arrangements were to be agreed in the second phase of the negotiations, and is without prejudice to discussions on the framework of the future relationship.”

The document is literally not worth the paper it is written on. Westminster and even Whitehall are appalled. “We should smile and do nothing,” said Iain Duncan Smith.  Another Tory Brexiteer MP told Politico this, “might very well be a deal breaker,” adding “I would very much hope that this is not the final position, since it makes a ‘no deal’ outcome all the likelier.”

His astute parting shot: “If we leave without an agreement, it’ll cause them problems with third countries.”

Coming a week after Nigel Farage gave Michel Barnier a lecture on what the 17.4 million voted for, namely controlled borders, all the attention will be on the interminable extension of residency rights for EU migrants.

The cost of trade foregone

But for the very reason of Farage’s intervention and the fact that it was the less-influential Eastern European countries – particularly Poland – that pushed for easier access into Britain suggests the EU is gathering new bargaining chips to eke out more cash. Lest we forget, the EU is desperate to keep its budget nicely inflated post-Brexit. This is not a red line, but it will be a costly one for Theresa May to rub out.

Trade is another matter. Under the terms of the transition, the EU will need to authorise the UK’s future commercial deals with third countries. The logic: under transition, Britain will continue to benefit from the dubious benefits of the EU’s existing trade agreements. Remainers, cowards like Philip Hammond and the centrists in the Labour party will view this as a gift, helping to avoid the ‘cliff-edge’ the Chancellor repeatedly complains about.

He would be advised to keep calm and carry on. A major reason these countries signed up to EU trade deals was to access the UK’s market within. All the British government needs to do is copy and paste them. Last week, Lord Price, a former minister for international trade revealed that on his watch 36 countries had pledged their intention to sign a trade deal with the UK, many (but not all) of them already have one with the UK via the EU. As Lord Price pointed out, there is even scope to improve terms. Just as with the extended cutoff date and fisheries, the government absolutely must resist EU restriction on Britain’s future trade policy.

According to the Times’ sources, conscious of the potential for Tory rebellion, the EU will not go public with its alterations to the withdrawal agreement until late in the year, begging the question, what will they be negotiating in the interim? There is no chance of a productive negotiation when the most contentious issues are kept off the table until the latter stages.