November 6, 2019
After two seminars on Brexit organised by Queen’s College in January 2018 and the Oxford Martin School in October 2019, we expected to receive more answers than questions. But that was not the case!
At Queen’s, the negotiations (in January 2018) were at an early stage. The title “The facts facing the UK’s Future” set the tone. We discussed. A very “City of London” public were reassured by the soothing words of Karel Lanoo, Director of CEPS, about the post-Brexit future of the UK financial sector.
In October 2019, the seminar at the Oxford Martin School was held 27 days before the “do or die” exit of the United Kingdom from the EU. And the climate was no longer the same.
British leaders unprepared for Brexit
At Queen’s, it was already striking. Guesswork dominated the contributions. At the Martin School, it was worse. One of the first speakers was Sir Vince Cable, the leader of the Liberal Democrats in Westminster at the time. His theme: “Is there a way out of the Brexit maze?” It was astounding, just days away from the deadline, to see this important political leader mixing up and confusing concepts like the customs union, free trade agreement and the Norwegian model!
To the great indignation of Guntram Wolff, Director of the Bruegel Think Tank, several argued for the Norwegian model, on condition that free movement of workers would not apply to the UK! Others believed only a mediator would allow us to escape from chaos, and even suggested the name of Barack Obama to do it! In the backdrop of all this discussion, the responsibility of the EU in the Brexit affair was underlined.
As we know, an agreement was found between Prime Minister Boris Johnson and the European Council on 27 October, accompanied a few days later by an extension of the Article 50 period until 31 January 2020.
The terrible agreement of 27 October…
The psychodrama of recent months has confirmed that “no deal” was never a credible option. A threat, yes, but a credible option, no. This, even though the consequences of a soft or hard Brexit have been, in my view, highly underestimated. The 27 October agreement is a bad agreement, even a very bad agreement. In short, the United Kingdom is leaving the EU customs union (the basis for two previous years) in favour of a model based on signing free trade agreements with the EU, the US, China, etc. The European Council, probably weary of postponements, delays, complications and UK negotiators’ lack of preparedness, has – if I may use the expression – dropped the matter as if it were eager to call a halt and be rid of this poisonous affair. France, via its President Emmanuel Macron, has a played a very poor role here. All actors in the final stage, negotiators and ambassadors, confirm it. An odd paradox for such a staunch pro-European.
A no deal in all but name!
The transition period, which will end at the latest on 31 December 2022, is considered an opportunity by the British. It is the complete opposite. The UK will have no Commissioner, no MEP, no civil servants in the Commission. They will have to pay their contribution into the EU budget (and pay what the Union is owed), apply any new EU regulations and not sign any free trade agreement. The problems to be solved are countless. The most difficult will relate to the signature of bilateral FTAs between the United Kingdom and the rest of the world. Already Michel Barnier has set out the limits: “with the EU there can be no quotas, no tariffs, no dumping.” In other words, an agreement that is not only constraining but also must receive the unanimous consent of the EU-27 plus some regions (e.g. Belgium). Put briefly, doing this in the space of two years is mission impossible. The same goes for the US. Despite initially promising a comprehensive FTA, President Trump is already rolling back.
If this 27 October agreement enters into force, the chaos expected under a “no deal” will extend to the EU. For what the European Council has resigned itself to is simply “no deal” in all but name.Daniel Gueguen