« Not in my wildest dreams would I imagine that a possibility » is how an influential European diplomat responded to Boris Johnson’s assertion that a trade deal with the EU can be completed by December next year /1
Surely the diplomat is being unfair, you say. Listen to Michel Barnier and incoming trade commissioner Phil Hogan. They say a deal can be done quickly. The U.K. currently shares EU rules and regulations. How difficult can it be to strip them away to a basic FTA, you say..BUT /2
If Johnson wins a majority in this election and takes U.K. out of EU in Jan, then Brussels is preparing to offer him a quick FTA but with the utmost levels of EU regulation bells and whistles attached (so-called level playing field provisions) /3
On environmental regulations, state aid rules for example. This, to reassure EU members that the U.K. won’t have huge competitive advantage after #Brexit BUT if PM accepts FTA under those terms, then where’s the national sovereignty he promised voters? /4
Infact my EU contacts say the PM already told them he can’t accept being tied to EU rules like that after #Brexit .. Which is why Brussels believes EU-UK trade negotiations will take longer meaning the transition period following Brexit will v likely be extended past Dec2020 /5
Another big spike in wheel of speedy negotiations: fish. PM has promised fishermen sovereignty over U.K. waters after #Brexit BUT the French, the Spanish, Danes, Dutch .. will demand fishing rights in U.K. waters in negotiations. PM will be under pressure to agree, otherwise../6
EU could threaten to close their market to U.K. fish stocks - so where would all the U.K. fish be sold? EU could push for fishing rights in exchange for something else the U.K. might want in return. Conclusion: Negotiations bartering is not likely to be over quickly /7
The messiness of “We’ll give you this, if you give in on that” negotiations also means it’s unlikely that a sector by sector EU-U.K. deal could be reached, where one part of future relations (eg security) could be signed off, while more complicated areas are still negotiated /8
Why would UK sign off eg on post #Brexit security deal with EU, where it arguably gives more that it receives - when it can use future security relations with EU as a bargaining chip to get something on services for example - which U.K. wants but EU is reluctant to concede? /9
Another complication for U.K. in getting a quick deal done is that it’s not in EU interest to make it easy unless UK remains tied to EU rules. This is not only bc Brussels wants to protect itself from big competitor on doorstep.. it is ALSO worried about setting precedent ../10
EU doesn’t want to give a) eurosceptics in other EU countries the impression that you can leave the club and its rules behind and still easily enjoy all the economic benefits or b) other 3rd counties the impression that EU single market rules are easily broken in trade talks /11
You might think it makes no sense for the EU to cut off its nose to spite its face. Surely the EU needs and wants good trade and security and diplomatic relations with post #Brexit U.K. ? True, it does. But as was the case in withdrawal agreement negotiations.. /12
EU will always put single market first ahead of trade and other relations with U.K. The rest of single market is far larger, more lucrative than market U.K. offers alone. Brussels is wary of harming SM in trade negotiations with U.K. Of course there will be give and take BUT/13
EU believes - as did with divorce talks - that it is in the stronger position. 1) It knows Johnson has promised not to extend transition beyond 2020 - he’s under time pressure (expect a return of Barnier’s “clock is ticking” pronouncements) .. /14
2) EU knows the debate over fishing rights and level playing field regulations are politically toxic for Johnson back home, so they will likely play long and press hard /15
3) EU knows U.K. will want to conclude trade deals with other countries ASAP BUT other countries will hesitate to conclude agreement with U.K. until they know what relationship it has with EU /16
Yet another complication for UK is that individual EU countries have different interests when it comes to a trade deal - this is also likely to slow down negotiations. Eg Spain may push for more rights over Gibraltar, there’s the fishing issue mentioned above. AND.. /17
As a so-called mixed agreement, while negotiated by European Commission, the EU-UK deal will need to be approved by the parliament of every EU member state - bearing in mind eg Belgium has more than one parliament with a vote and EACH parliament has a veto over the deal /18
In short-term, if Johnson wins elex with a majority, EU predicts starting trade talks around March after U.K. leaves in Jan. It then thinks there’ll be brinkmanship by both sides, threatening no deal ahead of transition period ending Dec 2020 /19
Transition can be extended by two years and EU thinks in end it prob will be extended BUT in meantime in 2020 UK and EU businesses face more uncertainty - whether Tories win or if Labour forms some kind of government and tries renegotiation plus referendum /20
And while UK focuses on the election with all the uncertainty it throws up, the EU has time as space to game plan the various negotiation scenarios that may follow /21
