The Brief – A tale of two cities

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A Fortnum & Mason hamper, replete with British sparkling wine, cheese and the now obligatory biography of Winston Churchill, was the gift bestowed by a group of ‘hard Brexiteers’ on Michel Barnier on Wednesday (10 January).  The ensuing talks only added to the confusion about where Britain wants to go after leaving the bloc next year.

The UK delegation was made up of Leave campaigners/businessmen John Longworth and John Mills, former trade minister Digby Jones and former UKIP MEP Steven Woolfe. The group believe that the UK can happily trade with the EU on World Trade Organisation terms if Barnier & co refuse to play ball and offer a generous free trade deal.

“If the heads of terms on the FTA are not agreed by mid-2018, the UK government will have no option but to postpone any trade negotiations,” Longworth stated boldly.

The gung-ho mentality of this particular group of Brits in Brussels was slightly at odds with two distinctly sober House of Commons hearings on what post-Brexit trade will look like.

Ministers should beware of the virtues of a ‘Canada Plus’ trade pact, MPs on the Exiting the EU committee were warned.

Any trade goodies given to the UK would have to be extended to the EU’s trade pacts with Canada, South Korea and Singapore under the ‘Most Favoured Nation’ clause, warned witnesses from the London School of Economics and European Centre For International Political Economy (ECIPE).

“I wouldn’t say that CETA is a very good model,” opined ECIPE’s Fredrik Erixon. “There is no question that a CETA-style agreement would increase barriers to trade.”

That caution was matched in an International Trade committee hearing a corridor away.

The government’s Trade Bill will cut-and-paste the EU’s existing trade agreements into UK law after March 2019, including the bloc’s controversial economic partnership agreements with African, Caribbean and Pacific regional blocs.

That will, ministers hope, roll over 36 existing EU trade deals with 65 countries. “In each of these cases there are egos to be stroked,” Lord Hannay, a former UK Ambassador to the EU, warned MPs.

“We can’t assume that people will just fall over themselves to agree to stand-still on trade”.

He was accompanied by Lord Price, a trade minister in the Cameron and May governments until his resignation last September, who told MPs that although the number of trade officials in the UK civil service had swelled from 45 to 550 since the June 2016 referendum, his former department was still extremely overstretched.

Trade officials had invested little time on future trade deals, Price conceded.

The UK’s International Trade Minister Liam Fox has set his sights on persuading the 20 African nations in the Commonwealth to build a free trade zone on the continent that would have preferential access to the UK. Meanwhile, a White Paper published in October has promised that Brexit Britain will continue to offer ‘duty-free-quota-free access to the UK market’ for countries classified as ‘least development’ alongside a ‘unilateral trade preference scheme’ that could, potentially, outflank the EU EPAs.

For the moment, the UK has nothing to offer these countries besides warms words.

“We’re simply not going to be able to offer better deals (than the EU) in April 2019,” said Price.

That’s either a brave new world or cause for concern. But hardened Brexit-watchers might note that it is rare for the rhetoric to come from Brussels and the reality from Westminster.

The Roundup

Emmanuel Macron is keeping a close eye on Germany’s coalition talks, as his ideas on EU reform represent a hurdle for the two sides to overcome.

A cross-party group of EU lawmakers want a complete phase-out of palm oil in European transport fuel by 2021. They say the biofuel has been an environmental disaster but producer countries Malaysia and Indonesia are planning a complaint to the WTO.

Poland’s new Prime Minister Mateusz Morawiecki’s talks with Commission President Jean-Claude Juncker last night were “friendly” and a positive step towards mending Warsaw’s strained relations with Brussels, the EU executive said. It looks like the threat of a ‘Polexit’ has passed.

Thirty years after it was dreamed up by Jacques Delors, the European social dialogue is still unknown to almost half of the EU’s workforce, a survey has found.

Development was a big topic at the recent EU-Africa summit, but African countries are keen to ensure the EU’s development policy goes beyond putting up barriers to migration. Leaders from seven Mediterranean countries met in Rome today to discuss migration, the economy and the euro.

Greece has given Muslims the choice to settle their disputes under Greek law, ending the century-old monopoly of sharia law over Islamic family disputes, which critics say has been especially harsh on women.

Silvio Berlusconi has said it will be impossible for Italy to leave the euro but his far-right potential coalition partners have other ideas.

Look out for…

The College of Commissioners heads to Sofia to mark the beginning of the Bulgarian EU Presidency.

Views are the author’s.

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