Written By Caroline Bell
This article first appeared in Briefings for Britain. We republish here with kind permission.
Editor’s note: This is the second part of a two-part series. You can read the first installment here on Independence Daily.
Playing for time
The utter shambles over the EU’s Covid vaccine procurement gives us an idea of the ‘might is right’ approach Brussels is likely to take. The EU believes that sheer population size means it will always win, however long it takes. It is likely to dig in for trench warfare as it did with talks on the Withdrawal Agreement and the TCA, hoping to extend and pretend for as long as possible. The longer it can drag out ratification of the TCA, the more benefits it will hope to extract from the UK in return for granting minor concessions on border paperwork (a complete anachronism in the digital age) or a lifting of the bureaucratic blockade the French are imposing on lorries from England (link). If the TCA remains provisional for long enough, we will be in the run-up to a vote on the Northern Ireland Protocol and the end of the transitional fisheries agreement, when quotas will be renegotiated or terminated. It would certainly suit Brussels to have some useful bargaining chips ready to deploy then. It is in any case almost inconceivable that all 27 member states will have ratified the TCA by 30 April (or even by this time next year), so we may expect repeated requests for delay while important decisions are shunted further into the future. Meanwhile, the constant niggles, the hostility, the trade diversion will continue and – if enough business can be clawed back from the UK – the TCA might never be fully ratified by the EU.
Hostages will be taken, and not just in Northern Ireland. Financial services are the EU’s principal target. There is unlikely to be any permanent equivalence even if the EU succeeds in cutting the City of London down to what it thinks is an acceptable size. So, expect at best a rolling list of temporary permissions which can (and probably will) be withdrawn at short notice. Brussels has form here too, as Switzerland can testify. A Memorandum of Understanding on financial services is supposed to be agreed with the UK by 31 March, at the same time as waivers on requirements in the Northern Ireland Protocol end. There is unlikely to be any movement by the EU on the Protocol unless it can chalk up some early wins on financial services.
The harassment of hauliers at Continental Channel ports is likely to continue – it is even affecting Irish hauliers using the UK land bridge (link). We may expect continued restrictions on UK travellers even when most Britons will be vaccinated against Covid-19 while EU citizens are not, continued refusal to grant equivalence in key areas, litigation at the ECJ if the Commission thinks it can get away with vexatious prosecutions, attempts to control subsidies, arguments over car batteries, renewable energy, the certification of goods and medicines… the possibilities for mischief-making are infinite.
It would be unwise to believe that at some point the EU will end up on the same page as the UK, wanting the same things from the TCA – free trade and friendly cooperation between equals. The deal has already served a useful purpose, in that it got us past the fateful 1 January with no major hiccups and has shown quite starkly where our future problems lie. That may indeed be as good as it ever gets. As the foundation for a lasting economic partnership, the odds are not looking great. If we now agree to the kind of sequenced negotiations the EU loves, we will never get out of the trenches – and more importantly, we may delay doing things we need to do elsewhere, hoping for a breakthrough in Brussels. It would be a fatal error. Global Britain has never been more important, and the same creativity, drive and grittiness which has allowed the UK to develop and roll out Covid vaccines at lightning speed now need to be deployed in all our dealings with the EU. Defined goals, a clear strategy and a rigorous timetable are required to manage the lumbering EU behemoth.
Some obvious “don’ts” include: not allowing the EU to set the agenda or keep extending talks and the TCA ratification timetable, not enforcing totally unnecessary checks on goods sold within our own internal market (from GB to Northern Ireland), not mirroring new EU rules, and not giving an inch on our core interests. We should be prepared to use nuclear options to protect them if necessary, and take specific retaliatory measures when the EU breaches its own laws and the terms of the TCA to disadvantage British businesses.
We should redouble our efforts to sign trade deals with other countries so we have alternative markets and suppliers, accelerate the repeal of EU law to avoid getting caught in a regulatory nightmare, and focus on forging smart Britannia, quick to seize new technological opportunities in the digital age. Some landmark measures would be welcome, like the abolition of VAT, which is a burdensome and complicated EU tax governed by reams of retained EU law. A simpler UK goods and services tax to kickstart the economy post-Covid would be a powerful signal that we intend to take advantage of Brexit to do things faster and better.
And of course, we should always be ready to cut and run if the TCA proves to be more trouble than it’s worth. When and if that should prove an attractive option will depend on how the EU conducts itself in the next few months.
Caroline Bell is a civil servant, and a regular contributor to BfB.