Written by ‘Harry Western’
The government itself has laid out its core objective on a number of occasions as being to establish the UK as a fully independent state with control of its own trade policy, regulatory system, judicial system and natural resources including fishing grounds. Based on this, it is critical the UK does not sign up to a deal which includes any of the following elements:
- A trade deal that limits the right of the UK to set its own external tariff or conclude trade agreements with third countries. This includes ruling out regulatory alignment with the EU which would in practice make trade deals with many countries impossible. A key area here is food and agricultural trade – the real intention of recent attempts by lobby groups to push the UK into locking in various protectionist food sector regulations is not to defend food standards but to undermine the UK’s potential to cut third country trade deals.
- Automatic regulatory alignment with the EU, e.g. via the EU’s so-called ‘level playing field’ demands. Agreeing this would not only damage the UK’s ability to cut trade agreements but also open the UK up to endless regulatory attacks. Anyone doubting this should look at the EU’s record in this area – among others, the UK agriculture, fishing, clinical trials, vacuum cleaner and financial services industries have all been on the receiving end of such treatment in recent decades.
- Any role for the ECJ in governing a trade agreement. The ECJ is a political court that cannot be relied on to be an impartial arbiter of any UK-EU disputes.
- Any continuation of the EU’s common fisheries policies. As we have previously written, in this area ‘no deal’ is the best deal for the UK fishing industry. There is room for negotiation on some elements of a new fishing arrangement including how to phase it in but not on core elements such as using zonal attachment to determine the UK/EU fishing rights – which will correct the current gross imbalance and deliver a massive boost to the UK industry.
What about other elements of a possible deal? In addition to the broad objectives outlined above, the UK has also outlined a set of more specific demands in the talks so far:
- On governance, there should be a series of separate agreements each governed individually. By contrast, the EU wants an overarching agreement folding in all elements and giving it the right to ‘punish’ supposed transgressions in one area by sanctions in others.
- A zero tariff and zero quota trade agreement on goods.
- ‘Cumulation’ whereby not only EU content but also content from countries with which the UK and EU have free trade deals can be included by UK firms as ‘local content’ for rules of origin purposes (thus making it easier for UK firms to qualify for zero tariffs when exporting to the EU).
- Mutual recognition of conformity assessments i.e. testing and certification of goods.
- A financial services agreement based on a concept like ‘enhanced equivalence’ whereby the UK and EU would agree to recognise each other’s regulatory systems as equivalent. This should not allow the EU to suddenly and unilaterally withdraw regulatory recognition – as its current equivalence system does.
- Mutual recognition of professional qualifications.
- Agreement on data sharing.
- A deal on freight transport to smooth cross-channel flows and an aviation agreement.
Compared to the first list, which we would characterise as ‘essential’, quite a lot of the list above might be described as ‘nice to have’. If David Frost’s 60% remark refers to this list, that would be no disaster as it’s fair to say that the UK’s initial asks in these areas – while mostly supported by precedents in other agreements the EU has signed – are, together, a big ask.
Some of the elements in the second list are also of quite limited importance – cumulation, professional recognition, data sharing and mutual recognition of conformity assessment would all fit into this group. So too does freight transport – the EU would actually be the big winner from an agreement here as EU firms carry the great majority of UK-EU trade. If none of these elements feature in a final agreement, or they do so in a limited form, the loss will be minor.
Even a zero tariff zero quota trade deal is arguably more valuable to the EU than the UK, given the EU’s massive trade surplus with the UK. Preserving EU trade preferences in the UK market isn’t obviously a positive for the UK – other, cheaper, global suppliers are waiting in the wings.On financial services, meanwhile, ‘no deal’ is perfectly satisfactory for the UK. The UK is a massive global financial hub, the EU is a financial backwater. Wholesale UK financial services can be traded with the EU without EU equivalence or ‘passporting’ rights and maintaining UK regulatory autonomy in this area is of absolutely paramount importance – especially as the EU moves in an ever more restrictive and anti-market direction in this area.
One element of the second list we would not be relaxed about is governance. It is critical in our view that the UK does not agree to a deal that bundles together elements like trade, fishing, security and aviation and which allows the EU either to collapse such an agreement based on disagreements in one area or use disputes in one area to launch attacks in others. Such an arrangement would be a recipe for constant blackmail/conflict and damaging uncertainty. The EU would use such a structure to try to force the UK into satellite status.
Based on the above, it would be useful if David Frost clarified exactly which of our two lists his ‘60%’ figure refers to. Yielding 40% to the EU in the first list would be nothing short of disastrous.
This is especially the case when we consider that the EU has already gained perhaps 60% of its key aims in the first round of negotiations undertaken with the May government. It has got an excessive and potentially open-ended financial settlement; an extremely generous deal on citizens’ rights; the semi-annexation of Northern Ireland, economically; and protection of geographical indications. By contrast, there is little, if anything in the Withdrawal Agreement that can be seen as a significant win for the UK. If anyone wants to know why the EU has been so obdurate in subsequent rounds of talks, this is the main reason – most of the key prizes are already in the bag and were gained so easily that the EU sees no purpose in giving ground on the outstanding issues.
‘Harry Western’ is the pen-name of a senior economist working in the private sector who wishes to remain anonymous.
Thank you for printing this David
I don’t think we should be relaxed, it’s mundane style suggests there are many lines to be read between and the whole thing eggs questions and of course there are no answers or likellihood NyQuil being provided by the tight mouthed government.
We have every reason to be suspicious, but I am incensed that they haven’t drawn a line under the whole “fake” negotiation now, it is evident there are no real grounds for doing a deal, particularly one where the EU, just to contain its own discontents must win and the other party , us, must win to assuage our troops – the re is no basis for a deal and there never was one.
Throughout the prolonged clause 50 withdrawal process there has been the cry that Industry, Exporters and others have suffered UNCERTAINTY – well if the y weren’t suffering it before they must be certainly suffering it now.
It is grossly reprehensible that the Government continue with this nonsense – come on Boris send the EU a letter, speak for our nation WTO
In fact WTO will make the country GO (Grassroots OUT) and GROW
PS I had a look at the Goverments criticism of the Times printing fake news about a chap called Bew and also Dominic Cummings at the bottom of the blog if the Times has been telling porkies like that will they be reported t o the press disciplinary service ?
If 60% is total clearance of the UK from the EU, and the 40% is a deal requirement, then I for one would say ”Stuff the Deal” !
If on the other hand, 100% means the total break from the EU, and we have to-date only 60%, then PM Johnson is in for a very rude shock from his voting public. – It is even possible that some very wild men could get involved !
We British are generally a fairly patient lot. – We have had to be, with four and a half year’s delay to our voted directive, come New Year. – If there is fudge on this matter, all hell could break lose, and Johnson would do well to find another country to live in !
I am sure that the 40% shortage is indeed the EU deal that might not arrive, but the figure jiggling by the Tories is most regrettable, and they would do well to use plain English in explanation to their employers !
The EU are already flexing their muscles by stopping a bill that was proposed to protect our oak trees from an imported disease for the Eu.
Time to walk away
60%? Put that down as ‘fail’. Deduct 60% of pay and allowances from all those involved in the failure. Don’t like it? Get out of politics.
Its all theatre and leaks to test public opinion. Scrap the WA surrender treaty and walkaway.
Who voted for a 60 per cent leave? Soft brexit, hard brexit and now I cant believe its not brexit-brexit 60 percent lighter. You can have any old flavour so long as we dont Leave.
So, is this chap saying that there is now no such thing as a “NO DEAL ” .That mrs May the evil and slatternly cow, has already made a treaty,. and it cannot be changed ?
No wonder they are trying to promote Holidays to EU. and Spain.
Thank you for reminding me, it was the EU who said “nothing is agreed until everything is agreed”.
Is it beyond the mental capacity of both sides to acknowledge that the UK is once more an Independent Sovereign Nation?
If we wish to sell goods to any country within the EU those goods must comply with the standards of that country
If they wish to sell to us the converse applies. In theory that would imply a ban on Dutch, Danish, German and French pork products because they keep their pigs in a manner that is prohibitted here in the UK, nor are their slaughter-house regulations as strictly applied as they are here.(Both go back to the Bliar years)
The job of Government is only to ensure that trade can prosper. The trade itself is between individuals/companies.
Independence and WTO will do fine.
So in this chaps opinion. The WA, and the EU oft stated opinion, still stands. Have Frost, Johnson, Cummings Denied this ? It all makes a sort of sense.
What does Nigel say. ?
What does Torquil say ?
What do we do?
A campaign against the WA treachery, must start Now.
“A campaign against the WA treachery, must start Now”. Isnt it getting a bit late for that now? Some people , particularly Richard Braine, started doing a good job waging such a campaign just before the General Election but got silenced. Also Ralph Protheroe exposed the full implications of the WA and I for one gave links for his articles on this forum, quite a few times on ConWom. But mass lunacy ensured that “We’ll have to Vote Tory . Nobody HAD to vote Tory, they could have stood as independents or UKIP candidates.
I know what you mean Mary. But we all omitted to take into account the damage the UKIP –NEC , in the manner of all committees, could or would or continue to inflict to this day, on a willing network ( And probably to this day are patting themselves on the back. )
” Look upon his works ye mighty and despair “
I was sent the following blog, https://no10media.blog.gov.uk/2020/07/23/david-frosts-statement-following-the-conclusion-of-round-5-negotiations-with-the-eu/?fbclid=IwAR2OEiEBLIkJKhiM2X3IF1ryp-juBZzHiEfrW5hFcVrDQaY9ZPouFZNu3Eo It tends to confirm what Mr David Frost states when he mentions limited progress. Perhaps there is an overall 60% agreement which is being held up by EU logic being stifled by EU territorial demands on fishing.
Just a thought, has the UK ever stated that the EU cannot fish in UK waters. If the EU accepts that the UK is a sovereign nation then a fishing agreement might be reached.
I cannot understand for the life of me why the government are still negotiating with the European Commission. They are NOT going to back down, and make the UK a special case, as it would potentially open the flood gates for other EU states to leave the EU. I feel the clown at number 10 will eventually cave in to their demands on the customs union and regulatory alignment making it almost impossible for this country to strike up trade deals with other countries. Any agreement with be stuffed full of pages and pages of meaningless words and buried amongst it will be the conditions that tie us into a relationship as close as possible without actually being a member. The Conservatives will no doubt hope that nobody will read it or notice the conditions that will tie us in forever. Come on Nigel for goodness sake, bring The Brexit Party out of hibernation as soon as possible. This government needs to be held accountable on so many levels now, as they are just getting away with blue murder. The Labour Party and its leader are worse than useless.
Best of luck with Farage. I am sure save Britain.
A timely reminder to those who may blindly put their faith in the Tories to deliver a clean Brexit.