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A couple of thoughts on what @ChrisGiles_ says here about a possible solution to the differences between the EU and UK on State aid.
First point is to note what the UK has *already* agreed in the Withdrawal Agreement. The effect is that the UK Government is going to continue (until the EU otherwise agrees) to have all sorts of UK measures (tax in particular) subject to the full panoply of EU State aid rules.
That creates a powerful incentive (if you are going to have a domestic anti-subsidy regime) to replicate the substance of the EU regime: otherwise you will end up, for many UK measures, with two separate regimes to think about. Not ideal.
Second point. I don’t think Chris is saying this, but I don’t think the EU will live with the answer “we won’t have any anti-subsidy regime, but if you don’t like subsidy X, just put anti-subsidy tariffs permitted by WTO rules on the subsidised goods”.
That point doesn’t deal with subsidised services (air transport, financial services, etc) where tariffs aren’t a thing.
But it is also deeply unsatisfactory from the EU point of view as it takes time and energy to impose such tariffs. For such a huge and close trading partner, the EU needs to tackle the root cause of what it sees as fires rather than rely on constant firefighting.
So the EU will insist on an anti-subsidy regime with teeth. And, indeed, even the Conservatives’ proposals during the GE contemplated setting one up (see my piece here prospectmagazine.co.uk/economics-and-… for a critique).
So the UK will have an anti-subsidy regime. And the EU will need to be happy with it (which isn’t to say that it needs to mirror the State aid rules exactly: and see here for my questions about the EU position).
It may well be, though, that the UK isn’t *required* to have such a regime in the sense that it would be in breach if it dropped the regime: you could easily draft the agreement so that dropping the regime would just give rise to nasty consequences.
(This is a standard technique in contract drafting: you don’t state that X is obliged to do A, you just say that if X does A, then Y can do B.)
If that’s a fig leaf to preserve Johnson’s ability to sell what he has done, then I dare say the EU could live with it.
PPS - if you are interested in these issues then (if you are in London on evening of 4 March) you should come to this. uksala.org/uk-state-aid-a…
PPPS for those who think the EU’s position is unreasonable, you have to bear the following in mind.
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