Why I’m fast los­ing any hope of a good out­come in Brexit ne­go­ti­a­tions

Belfast Telegraph - Business Telegraph - - News - @bel­tel_busi­ness with John Simp­son

Apos­si­ble Brexit cri­sis in the next four weeks is now a risk. It may come from a ma­jor dis­agree­ment amongst the UK min­is­ters lead­ing to a West­min­ster fall-out.

Al­ter­na­tively, it may come from a meet­ing with the Euro­pean ne­go­tia­tors when there is no agree­ment on the UK ar­ti­cle 50 ne­go­ti­a­tions.

Ad­di­tion­ally, there is the un­fin­ished dif­fi­cult dis­cus­sion on how to min­imise the fric­tion of the Ir­ish bor­der.

Even worse, a neg­a­tive meet­ing with the EU in late June might mean that some of the agree­ments al­ready reached be­come void.

Busi­nesses must now con­sider the se­ri­ous economic con­se­quences if the ne­go­ti­a­tions col­lapse and, with that col­lapse, the ex­pec­ta­tion of a two-year trad­ing tran­si­tion pe­riod af­ter March 2019 dis­ap­pears. The ‘cliff edge’ sce­nario becomes an early, painful pos­si­bil­ity.

North­ern Ire­land will en­joy no spe­cial pro­tec­tion if Brexit crashes. The ex­ten­sive ac­tiv­ity to de­velop a full work­ing pro­to­col for North­ern Ire­land in re­la­tion to all-is­land re­la­tion­ships could be aban­doned.

The cri­sis in late June looms be­cause the UK ne­go­ti­a­tions with the EU have been in­ad­e­quate and still rely on a lack of pre­ci­sion for the UK ex­pec­ta­tions on the fu­ture (mainly trad­ing) re­la­tion­ships with the EU of 27 coun­tries.

The EU ne­go­tia­tors can ar­gue that they have waited for a clear UK ne­go­ti­at­ing stance and the UK Gov­ern­ment has not tabled clear ex­pec­ta­tions on a cus­toms deal and a pos­si­bly adapted sin­gle mar­ket.

For North­ern Ire­land the ne­go­ti­at­ing po­si­tion is com­pounded by be­ing sub­sumed as part of the UK brief and then, ad­di­tion­ally, closely in­volved in try­ing to agree a firm pro­to­col on North­ern Ire­land/ire­land re­la­tion­ships.

The seam­less Ir­ish bor­der still awaits pro­pos­als that would en­sure ac­cept­able, ef­fi­cient all-is­land re­la­tion­ships.

The po­ten­tial for un­in­ter­rupted trad­ing ar­range­ments, to­gether with help­ful and nec­es­sary reg­u­la­tory align­ment, is a shared wish which is now threat­ened.

If the June meet­ing with the EU ne­go­tia­tors becomes a cri­sis, then, from the per­spec­tive of the gov­ern­ments of the UK and Ire­land, there could be se­ri­ous un­wel­come con­se­quences.

Iron­i­cally, the im­pact could be more se­ri­ous for busi­nesses across Ire­land than else­where.

Brexit has proved a much more com­pli­cated dis­ag­gre­ga­tion pro- cess than was re­alised at the time of the ref­er­en­dum. Not even the most ar­dent Brex­i­teers seem to have ap­pre­ci­ated the range and com­plex­ity of the dif­fi­cul­ties.

As the UK and EU ne­go­tia­tors pre­pare for the planned ‘June sum­mit’ there will be in­creas­ingly con­cerned po­lit­i­cal com­ments on the need for (and the ab­sence of ) agreed agen­das.

Go­ing into the June sum­mit with­out clear agree­ment on how to an­swer the many unan­swered ques­tions is more fraught than when pre­par­ing for ear­lier sum­mits in 2017.

The time scale, lead­ing to Brexit at the end of March 2019, is be­com­ing too short to leave room for de­lay and post­pone­ment.

The UK Gov­ern­ment must re­solve the un­cer­tainty and dis­agree­ment of its con­sid­ered fi­nal ne­go­ti­at­ing po­si­tion on trade and pol­icy re­la­tion­ships, in­clud­ing cus­toms part­ner­ships and an ac­cept­able ver­sion of how the UK might re­late to the sin­gle mar­ket.

Then that fi­nal ne­go­ti­at­ing po­si­tion must be re­solved with the EU.

Only the op­ti­mists now ex­pect suf­fi­cient progress will be made.

For the par­tic­u­lar Ir­ish ques­tions, there re­mains an in­com­plete and par­tially con­tro­ver­sial draft pro­to­col.

North­ern Ire­land in­ter­ests, with no po­lit­i­cal rep­re­sen­ta­tion in the ne­go­ti­a­tions, will watch with se­ri­ous con­cern the pos­si­bil­ity of north-south and south-north trade be­com­ing an un­com­fort­able reg­u­la­tory crash.

In the two years fol­low­ing the UK ref­er­en­dum there has been a pol­icy mak­ing vac­uum. All the in­ter­est groups have known what the timetable needed.

The Ir­ish Gov­ern­ment, in par­tic­u­lar, has been a frus­trated par­tic­i­pant. None of this gives com­fort to the de­liv­ery of good gov­ern­ment.

Time for the re­cov­ery of log­i­cal so­lu­tions is needed. What hope is there that the UK Gov­ern­ment will agree to ask the EU for the tem­po­rary with­drawal of the Ar­ti­cle 50 ap­pli­ca­tion?

In Jan­uary 2017, the DUP Econ­omy Min­is­ter Si­mon Hamil­ton pub­lished a draft In­dus­trial Strat­egy. A new strat­egy was cer­tainly needed as the pre­vi­ous Economic Strat­egy is­sued by Ar­lene Foster pro­duced economic growth of ap­prox­i­mately 1% here com­pared to 1.5% in Bri­tain and over 5.5% in the south of Ire­land.

A log­i­cal start­ing point for the In­dus­trial Strat­egy would be to un­der­stand why the pre­vi­ous Economic Strat­egy led to the low­est rate of economic growth in th­ese is­lands.

But it con­tains no such re­flec­tion. In­stead, in a chap­ter en­ti­tled ‘Our Im­prov­ing Econ­omy’, the In­dus­trial Strat­egy mis­lead­ingly presents the north as a roaring suc­cess.

Per­haps Min­is­ter Hamil­ton was re­luc­tant to be seen to crit­i­cise his party leader but if faults are not ad­mit­ted, lessons are un­likely to be learned.

The very no­tion of an In­dus­trial Strat­egy should it­self in­di­cate a po­ten­tially sig­nif­i­cant shift in think­ing.

For al­most four decades, En­ter­prise Pol­icy (how gov­ern­ment shapes the broad economic en­vi­ron­ment) has been favoured over In­dus­trial Pol­icy (sup­port for spe­cific indus- tries). But amid his­tor­i­cally low economic growth, In­dus­trial Pol­icy is mak­ing a come­back.

Min­is­ter Hamil­ton (be­low) went with the trend but, in­stead of pro­vid­ing pro­grammes of sup­port tai­lored to the par­tic­u­lar needs of dif­fer­ent in­dus­tries, his In­dus­trial Strat­egy re­verts to the no­tion of ap­ply­ing a stan­dard set of En­ter­prise Policies, de­scribed as five ‘pil­lars for growth’.

The pro­posed ac­tions, such as pro­vid­ing “sup­port for com­mu­ni­ties and in­di­vid­u­als fac­ing dis­ad­van­tage”, are ut­terly bland.

A proper In­dus­trial Strat­egy re­quires rigour and an at­ten­tion to de­tail.

Th­ese are not qual­i­ties typ­i­cally as­so­ci­ated with the DUP’S decade in con­trol of the main economic De­part­ment.

DUP min­is­ters com­fort­ably talked the lan­guage of the busi­ness com­mu­nity and con­fi­dently re­cited economic sta­tis­tics which gave the ap­pear­ance of suc­cess.

But un­der­neath the spin and the swag­ger the north’s econ­omy con­tin­ued to un­der­per­form.

When the Ex­ec­u­tive is re­stored a rad­i­cal im­prove­ment in the In­dus­trial Strat­egy will

be re­quired.

If faults are not ad­mit­ted, lessons are un­likely to be learned

The Ir­ish bor­der awaits pro­pos­als that would en­sure ac­cept­able trad­ing re­la­tion­ships

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