The final stretch for a Brexit deal?

8 October 2020

As Brexit rumbles on, Boris Johnson had insisted that a deal must be struck by mid-October, while the EU has insisted that a deal must be struck by the end of October. In practice both of these deadlines are likely to come and go, as have pretty much all the contrived deadlines throughout the past four years of negotiations.

Read more from DRD Partners Pete Bowyer and Tamlin Vickers, who respectively provide a London and Brussels perspective on the latest in this ongoing saga.

Cashing in the Prime Minister’s promises

from Pete Bowyer, DRD Partner

Talking to an influential Conservative Peer last week, he described Boris’ ‘Conrad Black’ syndrome. Back in 1999, Black, then owner of the Spectator magazine, was initially reluctant to appoint the Eurosceptic columnist Johnson as editor but was persuaded to do so on the basis that he solemnly foreswore his political ambitions. Boris readily agreed, yet just two years later he became the Conservative MP for Henley. “The problem with Boris,” my Conservative friend concluded, “is not that he doesn’t mean what he says when he says it. It’s that you can never take his promises to the bank.”

It is a lesson the EU has learnt the hard way during the latest rounds of negotiations with the UK on a free trade deal after the end of the transition period in December.

No-one in Brussels had expected the British Prime Minister to renege on the Withdrawal Agreement deal that he himself had personally re-negotiated and signed barely eight months earlier. But the Internal Market Bill, introduced into Parliament on 9 September, does exactly that by controversially breaking international law in a “very specific and limited way” much to the chagrin of previous British PMs amongst others.

Breach of faith

It’s not hard to see why the EU is fuming, and it has already started legal action against the UK Government for breaching the “good faith” provisions of an international treaty.

Britain, the nation that has built its international reputation above all on respect for international law, appears to be about to do the one thing that no one could have ever contemplated.

No one, perhaps, but one man. You don’t have to be Sherlock Holmes to discover the culprit behind the Internal Market Bill. The PM’s svengali chief advisor had clearly dusted down the OODA loop manuals of his hero, famed military strategist, John Boyd.

The key to Boyd’s theory is that “time is the dominant parameter” and that victory emerges from creating disruptive situations in which you are able to make appropriate decisions more quickly than your opponents.

Deal or no deal?

What those at the very heart of the UK Government had figured was that the talks were going nowhere. Or more precisely, they were heading in an extremely negative direction for the UK Government which, despite all the bluster, has always been desperate for a deal, almost at any cost.

What was needed was a disruptive act, one that would catch the EU unaware, throwing the cards up in the air for wherever they landed, they would be in a better position than where they had started.

And, whisper this quietly: is the UK’s bold, quite likely illegal, move actually working? Maybe. It’s certainly true that despite all the threats, the rumours grow stronger of progress about fishing rights and state aid, two of the notable sticking points.

The PM’s telephone call with EU President, Ursula von der Leyen raised expectations further, and whilst it did not move the talks into the so-called “tunnel” that define the very last stages of the negotiations prior to an agreement being reached, it has further intensified them with the two sides continuing to meet over the coming weeks.

The odds remain on a deal – albeit a very limited deal – being reached, if not before the 15 October EU Summit deadline that the British Prime Minister had always set, then a few weeks thereafter.

What remains moot is whether such a deal would have been achieved regardless of the Internal Market Bill, and whether the EU will take Boris’ promises to the bank this time before they cash them in.

EU-UK future relationship negotiations: the Brussels perspective

from Tamlin Vickers, DRD Partner

Groundhog Day

It feels like Groundhog Day in Brussels.

So much about the dynamics of the current Brexit negotiations are a continuation of what we have seen over the past four years, whether it be intra-Tory melodramas or politicians posturing and pandering to their domestic audiences, with the combined effect of reducing the chances of a sensible EU-UK trade deal being agreed. With the exit date finally coming into view, what lies in store in the weeks ahead?

For all the talk of a ‘tunnel’ and an intensification of negotiations following the Johnson-Von Der Leyen call, there is unlikely to be a breakthrough this week. Barnier is currently focussing on debriefing EU member states and – to a limited extent – on scoping out where he has room for manoeuvre in the final negotiating push before the European Council summit on 15/16 October.

Despite Johnson’s call last month for a deal to be struck by mid-October, from the EU’s perspective the European Council summit is the moment Member States can take stock of negotiations and come to a decision on whether a deal is possible (in which case they will look at what changes, if any, would need to be made to Barnier’s mandate to secure it) or not (in which case no-deal preparations will come to the fore).

State Aid and Fisheries

On the substance, while the two sides have made significant progress on a range of important issues, such as energy and transport, gaps remain in a handful of contentious areas.

Whereas the focus over the summer was on differences over state aid, there are signs in the last week or so that a possible compromise has come into view, entailing the UK signing up to shared principles and establishing a domestic its own anti-subsidy authority, and a robust EU-UK governance and enforcement mechanism. For this to be achieved both sides would have to row back from their maximalist positions, but it is foreseeable.

The issue of fisheries has this week again bubbled to the surface as a potential deal-breaker. While the EU is aware of the relative lack of importance of the sector economically, it recognises that it is a politically-charged one, particularly in those European coastal states whose fishing fleets stand to lose out.

Without a deal, European fishermen stand in some cases to lose a substantial proportion of their catch, enough to put them out of business without sustained government support. Which is why this is one of the few issues on which the UK has a strong hand.

Emmanuel Macron is seeking to call the UK’s bluff. He is under growing pressure in the polls and is particularly keen to avoid looking weak on this issue, so it is no surprise that his government is leading the charge among member states for the EU to maintain a tough line.

Ultimately, it is hard to imagine either side being willing to let the issue of fisheries scupper a deal, but domestic politics and misunderstandings could yet play a role.

The Final Stretch

Boris Johnson had insisted that a deal must be struck by mid-October; the EU has insisted that a deal must be struck by the end of October.

In practice both of these deadlines are likely to come and go, as have pretty much all the contrived deadlines throughout the past four years of negotiations.

An important deadline which will not change though is 31 December 2020, after which Brexit will happen with or without a deal. Given the time required for ratification, we are looking at mid-November as the latest point for an agreement to be reached. If one has not been hashed out by then, expect both sides to batten down the hatches and prepare for no-deal.

PHOTO: Credit to Getty Images

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