How significant is Boris Johnson meeting with new European Commission President @vonderleyen this afternoon? It’s significant in that it’s their first face-to-face in their new roles BUT today does not mark start of post #Brexit trade talks. Why? /1
As we know from Brexit Stage One: The Leaving Process, the EU is fond of procedure and regulation.(It’s the formula to keep so many member states more or less together.) EU law dictates that trade talks can’t start till UK legally leaves bloc (end Jan), and then .. /2
EU countries must agree a mandate for EU Commission to negotiate a comprehensive trade agreement on their behalf. Mandate then has to be formally signed off at minister level by reps of all EU countries. All this means EU says trade talks will start beginning March AND .. /3
When UK ministers complain that’s too long to wait, EU response is that UK always pushed for bigger role for national governments in EU decision-making to make it more democratic .. /4
Beware too before reading too much into an new EU Commission President -an Atlanticist, who also loves UK and studied at the LSE in the late ‘70s - as a sign the EU will be softer in #Brexit Stage Two: The Trade Deal than in was in the divorce talks .. /5
Of course EU should think out of box when comes to UK - big economy on its doorstep, a necessary ally on world stage (see Iran crisis now). And you will hear lo today from Von der Leyen (she’s giving a talk at LSE before meeting PM) about staying close friends and partners BUT /6
EU aware world (incl future trade partners for the bloc) will be watching these negotiations. Brussels fearful of setting precedent that could weaken value of its lucrative single market. Eg Emmanuel Macron yesterday urged Michel Barnier to negotiate with UK ‘in cold blood’ /7
Expect red-line drawing with smiles today between PM and von der Leyen. Presented as ‘friends telling each other truths’. EU position is i)PM’s timetable to get ‘ambitious, comprehensive’ trade deal agreed and ratified by December is unrealistic. Bare bones deal possible BUT /8
ii) only if UK signs up to following EU rules and regulations (eg on environment or workers conditions) as prerequisite to having good access to EU market HOWEVER .. /9
PM will counter with ‘truths’ of his own: i) that negotiations have to be done by December bc he won’t extend the ‘transition period’ UK enters into after leaving EU on 31 Jan. And why? Politically v difficult for him to defend eg paying into EU budget after #Brexit ALSO.. /10
PM will repeat today that UK leaving EU to be sovereign nation, not to align itself to EU rules even after leaving the bloc. Johnson’s priority will be deviation from EU regulations after #Brexit to ease trade deals with others, esp United States BUT /11
PM also will be wary of punishing new supporters in north of England by refusing to ease trade with EU in manufacturing for example. So: current EU assumption is that they’ll end up doing sector by sector deals with UK, with PM agreeing to alignment with EU in some areas eg /12
Cars +chemicals but not others. NB For all PMs talk on getting quota and tariff free trade deal by end of year, guess who that benefits most? The EU. UK buys more from EU than sells to it. UK trade surplus with EU is in services. And EU doesn’t see services in 2020 trade deal /13
EU opinion is that it’s already a stretch to work out sector by sector deal in goods PLUS implementation of divorce deal by Dec. Eg Setting up committee to oversee citizens rights, implementing NI protocol - working out extent of checks GB to NIreland and maybe NI to GB. ALSO /14
Fish. Expect a row over fishing rights in UK waters after Brexit. 8 EU countries want quotas to continue. They’ll lobby to block EU market to UK fish if don’t get them. It’s a tiny part of UK economy (in stark contrast to services) but politically a scalding hot potato for PM /15
EU expects bare bones FTA will be agreed this year with UK - though it intends to use PMs timetable as pressure-mechanism against him.. EU thinks talks on post Brexit EU-UK services and other relations will continue into 2021 but without PM extending the standstill transition /16
