The Brief, powered by logos – One last Mexican stand-off

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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It was perhaps inevitable that after more than four years (longer if you include David Cameron’s ill-fated attempt to renegotiate the UK’s EU membership status), the Brexit process would end with one last Mexican stand-off.

And so it goes that within 24 hours the EU and UK have both insisted that the other side should be the first to compromise in order to secure a new trade agreement.

Boris Johnson says that the EU has “abandoned the idea of a free trade deal”. His spokesman has since doubled down, saying that “the trade talks are over. The EU have effectively ended them by saying they do not want to change their negotiating position.”

The EU-27 insists that the UK must make the first move.

Yet, it’s hard to take the rhetoric of Johnson or, indeed, of Emmanuel Macron on Thursday, entirely at face value.

Despite the latest round of tough talk, an agreement is actually within touching distance, even if it is only on the most limited of terms. Meanwhile, the logic of securing such an agreement remains unchanged. ‘No deal’ means both sides lose.

With economies on both sides of the Channel being hit so badly by the COVID-19 pandemic – the UK economy is forecast to contract by 10% this year – there is no logic or rationality to imposing additional burdens on business and consumers by conducting trade on World Trade Organisation terms from next year.

Boris Johnson may insist that the UK will prosper. In truth, it is difficult to find a single credible economist who believes that either side would be better off with WTO terms. Tariffs and other trading costs would inevitably force up prices for consumers on everything from agricultural produce to car parts.

In truth, neither side thinks that the other has negotiated in good faith.

UK officials complain that the EU has been stubborn and reneged on its promise of a Canada-style trade relationship. The EU retorts that any trade deal rests on the UK not undercutting the bloc on social, environmental and state aid rules, and is seeking to torpedo the Withdrawal Agreement via its Internal Market Bill.

That the negotiations should have been conducted so bitterly is no surprise. Brexit is a political divorce and divorce settlements are seldom amicable or about self-interest. Yet the UK is a large European nation and the EU is its largest market.

One school of thought contends that even if there is a no-deal scenario, the two sides would still return to the negotiating table in early 2021, hopefully with the worst effects of the pandemic over.

That might be true but the Brexit process has shown that the passage of time serves only to harden positions. Besides, why wait six months to do something that can be done now.

The inconvenient truth for both sides is that rather than shooting each other, the best end to this Mexican stand-off is compromise and a handshake.

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The Roundup

The United Kingdom appeared to be on the brink of walking away from talks on a trade deal with the EU after Prime Minister Boris Johnson said that the EU had “abandoned the idea of a free trade deal.”

Bulgarian Prime Minister Boyko Borissov has asked European Commission President Ursula von der Leyen for a “plan” to support the country coal phase-out, saying Bulgaria’s own capacity was insufficient to achieve the bloc’s 2030 climate goals.

Make sure you have a reads through the latest editions of our Global Europe, AgriFood and Digital Briefs!

As Europe celebrates its flagship educational mobility programme, lawmakers in the European Parliament are fighting to increase the budget for what is widely regarded as one of the EU’s greatest achievements.

An increasing number of Europeans living in border regions of the EU say social and economic differences are not problems affecting cooperation between their home and neighbouring country, a new survey shows.

Look out for…

  • European Parliament’s virtual plenary session with Common Agricultural Policy reform vote
  • NATO defence ministerial

Views are the author’s

[Edited by Zoran Radosavljevic]

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