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O Canada? Why Johnson’s Brexit songsheet is full of bum notes

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Via Yahoo Finance

Britain’s most pressing problem is the government’s determination to fashion a hard Brexit. And if not that, then a no-deal Brexit. Of course, there is also the potential for a colossal economic sideswipe to the economy from the coronavirus epidemic, while flooding is causing huge harm to towns and villages in the west of England and Wales, and the Treasury is preparing a budget that will probably disguise a limited, piecemeal increase in spending, with exaggerated talk of government action to level up the regions.

These threats are not yet structural problems to match Boris Johnson’s demand that the EU offer a Canada-style agreement, one that gives easy entry to EU markets without strings attached, a proposal that cannot fly in Brussels and could mean the UK ends up with no deal.

Johnson says that unless the EU negotiator, Michel Barnier, sits down to consider the UK proposal seriously, and embarks on talks in good faith in the coming months, Britain will walk away as early as June.

There is no explanation in the government’s official negotiating mandate, published last week, that addresses why the EU should want to offer Britain near-zero tariffs on manufactured or agricultural products, zero fees and charges and permanently suspend any quotas that apply to non-EU countries.

With nothing in return and no way to stop Britain from abusing state-aid rules, anti-dumping regulations or environmental rules without going to the recently neutered World Trade Organization, the EU would be foolish to agree.

What about Canada, says Johnson? Well, there are three things to say about the Canada trade deal. First, Canada does not pose the same challenge to EU industries that the UK does. Second, the Canada deal (Ceta) contains an arbitration mechanism that the UK believes inferior to the standard version. And it does not cover financial services.

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The arch-Brexiter David Davis said in his Twitter feed: “There has been a lot of bluster and sabre rattling from the EU over the past few days. The reality is that if the EU loses access to our markets, it will do serious damage to their economy.”

There are those in the debate who focus on how Johnson signed a political declaration with the EU last year that promised “equivalence” and that he has conveniently forgotten that. Others say the UK stance should be seen more as an opening gambit that simply adopts a “minimalist” position, rather than one that openly contradicts anything said or signed previously.

Sadly for the Brexiter, the Swiss trade deals with the EU have always made for a poor analogy

Still, it must seem bizarre to Barnier that the UK should demand the EU consider huge restrictions on Spanish, French and Dutch boats entering British waters in a separately negotiated fisheries agreement while he is supposed to accept banking and insurance gets unfettered and permanent access to EU markets as part of the overall deal.

It remains cherry-picking to anyone with an ounce of sense. To Johnson and his on/off/on friend Michael Gove, it is a perfectly reasonable request.

There are those who are sympathetic to the idea of side-deals to tackle specific issues such as fishing. They cite how the EU signed more than 100 separate trade deals with Switzerland as reason to push for something similar.

Sadly for the Brexiter, the Swiss deals have always made for a poor analogy. They came with a demand for free movement of people, which the Swiss accepted. And worse for the UK, the EU is currently negotiating with Berne to turn the 100-odd deals into one huge one, with an arbitration mechanism that doesn’t just cover private sector disputes, but can also be invoked by EU governments concerned that level playing field rules are being abused.

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The Swiss have so far demurred. Their punishment has been swift and severe: Brussels has cut off EU investors’ access to the Zurich and Berne stock markets.

And all this is before we address the Northern Ireland protocol, which demands checks on goods at the border between the region and the British mainland, and is described by local politicians as a betrayal. Or Johnson’s starting point that the UK should have the right to “adopt or modify its labour laws” and the same for environmental legislation.

Gove says he will honour the protocol to further a deal with the EU. Others in the cabinet make noises about signing a deal and then ignoring the protocol, in the hope that Brussels will be ground down by Whitehall’s deliberate foot-dragging and eventually abandon a Northern Ireland customs border.

The Swiss example says this is wrongheaded and that a no-deal Brexit – or the most basic, hardest of Brexits – is where the Conservative party is taking Britain.

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