Here we go again. That was the working assumption of many people on both sides of the Channel about the latest no deal rhetoric from London, resting on the belief that the UK government has threatened to end the talks completely to a) put pressure on the EU and b) make the UK government look tough before a deal is done which Boris Johnson can then sell to his sceptical backbenchers.
\nHowever, it is in both parties interests to make reaching a deal look hard. Both sides have to convince their own constituencies that every sinew has been strained to finally reach an agreement with an unreasonable negotiating partner. If it doesn\u2019t look as if every effort has already been made then one or both sides\u2019 will face a chorus of calls from their team to go back for more.
\nBeneath the choreography of the talks there are substantive difficulties \u2013 the outstanding issues are outstanding for a reason. It is also always worth remembering the fundamental difference between these negotiations and more normal free trade agreement talks. Usually there is a shared overarching objective in building up cooperation and coordination, these talks are explicitly about the divergence. At the core is the fact that the UK wants to be able to compete more and coordinate less with their nearest and largest market and the EU wants to limit the UK\u2019s ability to do that \u2013 they have competing rather than shared objectives.
\nThrough our unique network of agencies we have collected the view of the state of Brexit talks from across Europe.<\/p>\n
It\u2019s high time to sit down and reach an agreement<\/strong> EU over Brexit<\/strong> The UK needs a deal more than us<\/strong> Talks are back on<\/strong> Grayling Brexit Unit<\/strong><\/em>
\nCanada or Australia?<\/strong>
\nIn common with most countries, political and media attention in the UK has been diverted from the matter of Brexit. It therefore caught some by surprise when Prime Minister Boris Johnson used a speech, following the EU Council Summit, to reiterate the UK\u2019s approach to negotiations with the EU and caution that without significant changes, the UK should prepare itself for \u201carrangements that are more like Australia\u2019s\u201d and to \u201cprosper mightily as an independent nation\u201d. Although he did not explicitly call a halt to the talks in that statement a Downing Street spokesperson did so later.
\nWith under 10 weeks left there is speculation over whether the UK Government are bluffing when saying they are prepared to walk away from the negotiation table. Although Senior Cabinet Ministers are clear that they would like to reach an agreement this should not be misinterpreted as unwillingness to contemplate leaving without a comprehensive trade deal.
\nIf no deal is the outcome, we should expect to hear more of the Prime Minister\u2019s line that the Government wanted nothing more from these negotiations than had been offered to other countries \u2013 notably Canada. In particular, the Government continues to emphasise that because UK regulations and standards are currently identical to the EU, and the Government are politically committed to maintaining high standards, demands for level playing field conditions to be set out in a treaty are unnecessary and undermine the UK\u2019s status as a sovereign state.
\nAmongst UK politicians, attention moved towards looking for bilateral agreements to mitigate some of the worst effects of no deal, for example, in industries such as aviation and haulage. Government insiders also privately suggested noises out of Brussels indicated some such barebones agreements could be achieved if there is an \u2018Australia\u2019 style outcome.
\nFor the moment the negotiations are back on. Deal or no deal, some divergence from the EU \u2013 and consequently disruption to business \u2013 is baked into this Government\u2019s thinking. Whilst Theresa May\u2019s plan was to minimise the level of friction for British business trading with the EU, this Government is a different beast. It will not only accept some friction in UK-EU trade, but it has often actively talked of divergence \u2013 its main focus being British sovereignty.<\/p>\nThe highlights from Berlin<\/h4>\n
\n\u201cWhat was right yesterday will remain right today.\u201d Chancellor Angela Merkel said after last week\u2019s EU summit. With this, she referred to her previous statement calling on both sides to keep looking for compromises \u2013 but not at any price.
\nWhile Chancellor Angela Merkel chose a softer tone to comment on the outcome of the summit the German leader of the European People’s Party (EPP) in the EU Parliament, Manfred Weber, was more straightforward and bluntly accused British Prime Minister Boris Johnson of irresponsibility. German media seemed to echo both these statements, repeatedly calling for an agreement on a trade deal, while using harsh language when referring to Boris Johnson\u2019s political strategy.
\nThere is one recognized certainty in Berlin: without an agreement, both sides lose. Even with this certainty German media encourage the EU to wait and see whether London moves enough in the negotiations to be able to pave the way towards an agreement at the last minute. There is a regretful recognition that it is quite possible that Boris Johnson cannot or does not want to move sufficiently.
\nMany reflect that with the rapidly rising coronavirus rates and the negative economic outlook in the UK the British Prime Minister must drop the talk about the UK having a \u2018fantastic future\u2019 even without an agreement. However, there is very little faith that the British Prime minister will let go of the rhetoric. The British government is seen to be acting against the national interest with its decision to suspend negotiations with the EU but that this confirms the real strategy, which is that when Boris Johnson claims that the UK can live with a no deal Brexit, he is more concerned about his Brexiteer supporters than the national interest.
\nThe view from Berlin is that now, two and a half months before the end of the transition period, it is high time that both sides sit down and find an agreement, even at the last minute.<\/p>\nThe highlights from Central and Eastern Europe<\/h4>\n
\nCentral and Eastern Europe was a COVID success story in the spring. The virus arrived slightly later to CEE than Western Europe, and rapid lockdowns and border closures, combined with a disciplined public response to restrictions, led to the initial outbreaks being contained.
\nThings look very different now. The Czech Republic is battling one of the worst outbreaks in Europe, and the entire region is seeing alarming spikes in cases which dwarf the numbers recorded six months ago.
\nWhy mention this in a Brexit bulletin? Because it means that there is simply no bandwidth for Brexit in CEE. On 1 July, when Poland took over the Presidency of the Visegrad Group (V4), which comprises Poland, the Czech Republic, Slovakia and Hungary, it published its Presidency Programme. A 38-page document, Brexit was given a single paragraph.
\nEven politicians like Hungarian PM Viktor Orb\u00e1n, who some Brexiters hoped would be an ally within the EU, has been relatively quiet. Last month, Orb\u00e1n told Reuters that the referendum result was \u201ca brave decision of the British people about their own lives…[and] evidence of the greatness of the British.\u201d However, he also said that Hungary \u201ccan’t afford to follow that track\u201d because of how closely integrated the Hungarian economy was with the rest of the EU.
\nThis final point is crucial to understanding attitudes to Brexit across CEE. It\u2019s true that there is a lot of warmth towards the UK across CEE, but the economic reality is that the region is dependent on the Single Market in a way that it isn\u2019t on the UK. For example, across the 11 CEE member states, 18% of exports go to Germany alone on average (it\u2019s above 25% in the larger economies of Poland, the Czech Republic and Hungary). There are only two CEE countries where exports to the UK exceed 5% of the total: Poland (6.4%) and Slovakia (6%).
\nThis helps explain why, at last week\u2019s European Council meeting, governments in the region stood squarely behind the Commission. Czech PM Andrej Babi\u0161 was in the unusual position of representing Poland as well because the Polish PM, Mateusz Morawiecki, was quarantining, and he said afterwards that \u201cWe support Mr. Barnier and his negotiating team. It is unfortunate that Britain is leaving as we were natural allies in many fields, but it was their decision to leave. We cannot give Britain exemptions to state aid rules. It would undermine the whole functioning of the Union’s internal market, and that is unacceptable.\u201d
\nIt was a useful summary of the view of Brexit across the region.<\/p>\nThe highlights from Paris<\/h4>\n
\n\u201cLes Britanniques ont davantage besoin d\u2019un accord que l\u2019Union europ\u00e9enne\u201d; tweeting after last week\u2019s European Council, French President Emmanuel Macron is clear in his view that London relies on having a deal more than the EU does. This opinion, it seems, is representative of much of the feeling in Paris.
\nFor EU Internal Market Commissioner Thierry Breton, whilst the EU\u2019s customs are ready for a no deal, London\u2019s are not yet. He calls on British customs to get prepared urgently. For Breton, therefore, the EU is better placed to face a no-deal. He adds: \u201cwe prefer a deal but not at any price\u201d.
\nFrance looks to show a strong front, arguing that a bad deal would be worse than no deal. Arriving at the European Council, Emanuel Macron was less hopeful than his counterparts, explaining that the EU is ready for a no-deal scenario.
\nDespite remaining firm in this view, Macron treads a fine line. When it comes to fisheries, in a no deal scenario, the EU has everything to lose, and France would be at the heart of this. Macron has previously warned that the first image of Brexit, would be that of the fishermen. Fears that this could create a crisis on par with that of the gilet jaunes run high in Paris. Just two years ahead of a French presidential election, such a crisis would not be good news for Macron, having barely survived the yellow jacket protests of 2018.
\nThe French President must therefore find a balance. On the one hand, Macron is presenting a united France ready to face a no deal, whilst on the other hand, he must be seen to be seeking an agreement when it comes to fisheries.
\nWhat may seem like an insignificant issue to many, the question of fisheries, still has potency on both sides of the channel as well as in it.<\/p>\nThe highlights from Brussels<\/h4>\n
\nThe talks are now starting again but the policy stumbling blocks remain as they always were \u2013 fishing, state aid and governance, now specifically in relation to dispute resolution procedures.
\nThe UK walkout was in response to the European Council\u2019s final statement which lost the word \u2018intensify\u2019 from the draft text \u2013 something that the Prime Minister, Ministers and UK Government spokespeople repeatedly took issue with. Ursula von der Leyen, Angela Merkel and Michel Barnier hastily tried to backfill that lost word in statements after the meeting and over the weekend. On Monday Barnier also addressed another sore point by agreeing to work on legal texts in a tweet, in effect openly dropping the dreaded \u2018parallelism\u2019 where no progress could be made on one issue without progress in the other areas.
\nMore was required and in Barnier\u2019s speech to the European Parliament he said the EU team would \u201cwork constructively and in a spirit of compromise\u201d \u2013 many on the EU side didn\u2019t see this as being much different from his, Merkel and others\u2019 comments the week before but it did the trick and the talks are back on.
\nThe Council meeting on 15th October was a UK deadline rather than an EU one. The EU has long predicted entering the \u2018tunnel\u2019 or \u2018submarine\u2019 stage of the talks in the second half of October and here we are.
\nEven if the actors are following the stage directions in these negotiations it doesn\u2019t mean that the conclusion has been written. As ever, the politics matter more than the economics. There are still significant voices around Boris Johnson calling for no deal and Emanuel Macron is entering an election season. Expect more plot twists, although the balance of opinion still expects a deal to be done in early to mid-November.
\nIf a deal is reached it will need to be ratified by the EU and ratifying the deal was made harder by the UK\u2019s Internal Market Bill. Separate to the negotiations between Frost and Barnier, the negotiations between Michael Gove and Maros Sefcovic in the Withdrawal Agreement\u2019s Joint Committee need to come up with a way of the UK removing clauses 42, 43 and 45 from that bill. Without that, the EU Parliament may reject the future trade agreement.
\nThere is one certainty accepted on both sides of the Channel: Deal or no deal come 1st January 2020 there will be significant changes in the way business can operate between the UK and the EU. There will be new customs processes, licences and certificates and freedom of movement for people will end. In 10 weeks\u2019 time the union between the EU and the UK will end \u2013 that change is coming whatever happens to the talks.<\/p>\n
\nOur Grayling Brexit Unit brings together the very best consultants from across the Grayling network and includes those who have direct experience of working alongside the leading political figures charged with negotiating Brexit in London and Brussels.<\/em>
\nThe Grayling Brexit Unit is here to support, guide and inform the success of your business and identify how the political dynamics will change as a result of Brexit in both London and Brussels. We are your Brexit experts.<\/em>
\nPlease contact Robert Francis<\/a> in our Brussels team or Alan Boyd-Hall<\/a> in London for more information.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"Here we go again. That was the working assumption of many people on both sides of the Channel about the latest no deal rhetoric from London, resting on the belief that the UK government has threatened to end the talks completely to a) put pressure on the EU and b) make the UK government look…","protected":false},"author":5,"featured_media":43660,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[544],"tags":[138],"class_list":["post-46805","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized-de-2","tag-government-relations-public-affairs","Sector-government-relations-and-public-affairs"],"acf":[],"yoast_head":"\n