EU is terrified now we’re the world’s new flexible friend
AS PART of the Withdrawal Agreement that we made with the EU prior to Brexit we signed a Political Declaration which committed both sides to negotiating a comprehensive Free Trade Agreement (FTA) by the end of 2020.
As the Chairman of the European Research Group (ERG), I am quietly confident that we will succeed in negotiating a deal which will allow us to trade equitably with the EU by the end of the year. I take this view for four reasons.
Firstly, because the Political Declaration – which lays down the tramlines, as it were, within which the negotiations must take place – has already specified an FTA as the desired outcome.
In other words, both sides have already agreed in principle where they want the final talks to land and it is now just a question of agreeing the details.
Theresa May’s variant of the Withdrawal Agreement did not have this proviso, but instead committed us to a Chequersstyle outcome in which we would be very closely aligned to the EU’S rules and regulations.
The truth is that the Prime Minister played something of a blinder in persuading the EU to drop this commitment and to opt for an FTA instead.
Secondly, our opening position is essentially that we would like a Canadian-style FTA, similar to the Eucanadian Agreement which the EU signed up to in 2016.
This is actually what Michel Barnier, the EU’S chief negotiator, was offering us in principle two years ago but now, for reasons best known to themselves, the EU are saying that this could be quite difficult.
Some critics point out that the Eu-canadian deal took seven years to negotiate and this is true. However, the flip side of this is that all of the heavy lifting has already been done and many of the most knotty issues have already been resolved.
Therefore, we begin these negotiations not with a blank piece of paper but based on an existing precedent to which the EU has already agreed.
Common sense suggests this must make it easier to come to an agreement than if we started from scratch.
Thirdly, when the Prime Minister said last year that he would persuade the EU to drop the dreaded “Backstop” (participation in a customs union) from the Withdrawal Agreement everyone said that it was impossible.
Indeed, the EU had said repeatedly that they would never do any such thing. Nevertheless, the Prime
Minister did persuade them to do exactly that (and to amend the Political Declaration to boot) and he managed to do all of that in under three months.
Fourthly, the EU has strong reasons to accept a deal.
THE ONE thing that really worries the European Commission is the prospect of the UK becoming the “Singapore of Europe”. As such, with a British economic model – which is far more flexible than theirs – they have always been worried that we could undercut them in world markets.
This is one of the reasons why they were so desperate to keep us in the EU in the first place.
Now that option is no longer open to them, their next best alternative is to sign some kind of agreement with us, in order to try to prevent us from outcompeting them entirely.
They therefore have a very strong incentive to reach an agreement, which did not exist when they hoped and believed that we would still remain in the EU.
The PM’S stated determination to opt for an Australianstyle deal (based essentially on World Trade Organisation rules) if the EU will not accept a Canadian-style version, should only serve to concentrate minds in Brussels.
The British people voted democratically to Leave and the EU is now finally waking up to this new reality.
I and my colleagues in the ERG will continue to monitor these negotiations very closely.
But we do have confidence in the Prime Minister to negotiate an equitable deal that will protect our sovereignty as an independent nation – exactly as outlined in his very good recent speech at Greenwich.
‘What worries Brussels is Britain becoming Europe’s Singapore’