Four key takeaways from the third round of Brexit talks

Four key takeaways from the third round of Brexit talks

The fiery third round of Brexit talks concluded in Brussels today, with tempers flaring as both sides dig in for an intense game of bluff. Nonetheless, there was more to the talks than two sides simply slinging barely-disguised insults at one another. Here are four key things to take away:

1. Concrete progress without decisive progress

Leading much of the coverage of the stormy press conference held by Michel Barnier and David Davis at the conclusion of the third round of Brexit talks has been Barnier’s declaration that there has been “no decisive progress” in the talks, seemingly at odds with Davis’s statement that there has been “concrete progress”. While this looks like a contradiction at first glance, essentially they’re both right.

There has indeed been no decisive breakthrough on the headline disagreements over the financial settlement and the role of the European Court of Justice in enforcing the agreement. This is not a surprise – no breakthrough was expected in either area at the August round of talks, while a major public row over money is not something that will concern either side unduly, with both sides using the Brexit bill as a central part of their strategic power plays for the time being.

The dispute over the role of the Court of Justice remains the greater cause for concern. Unlike the size of a large wodge of cash, fundamental legal questions are much harder to fudge, although the UK has outlined a range of compromise options it believes to be workable. Barnier, meanwhile, has stuck to the EU’s position that nothing less than the direct jurisdiction of the ECJ will do. If there has been any movement in that area, then it has been kept firmly behind closed doors.

The talks may be deadlocked on these two issues, but that does not mean that there is no progress elsewhere, with twenty position papers now on the table between the two sides overall. These cover a wide range of issues from the obvious, such as citizens’ rights, down to the obscure, such as the confidentiality of diplomatic documents, with many other areas in between, including Euratom and goods already placed on the market.

While these topics are less newsworthy in themselves, they are nonetheless important areas where technical disputes need to be resolved and agreed upon for the negotiations to progress, while in the key areas of citizens’ rights and the Irish border, steady progress has continued. The legal enforcement issue the only considerable barrier still standing in the way of an agreement on citizens’ rights, while both Davis and Barnier indicated there had been good progress in discussions on Irish border issues, with Davis identifying a “high degree of convergence” and Barnier hailing “fruitful” talks in this area.

So David Davis is also right to say there has been “concrete progress”, despite the lack of top-level breakthroughs. It’s a little like building a large and rather complicated house, where the builders are quietly getting on with laying the foundations (concrete, naturally), even though the architects are still arguing around them about how many floors they want and how many bathrooms, whether there should be a conservatory or a roof terrace, and of course, who’s going to pay for it and when.

2. The UK’s new approach may be starting to gain traction

For months, the UK has largely been on the back foot in the negotiations. The EU published its position papers first, set the timetable for the talks, and won the all-important “who has more papers on the desk at the photo-op” competition. Michel Barnier descended from the Berlaymountain to deliver the EU’s positions as if on tablets of stone, while the UK’s were dismissed out of hand like something scribbled on the back of a dirty napkin on its way to the bin. Jean-Claude Juncker was reinvented by large segments of the British media as some sort of great prophet, occasionally stirring from his deep meditations to pass infallible and impartial judgement on the UK’s paltry negotiating efforts.

The gloss slowly seems to be peeling off that EU-led narrative. The week started off with EU jibes of British unpreparedness, “magical thinking” and unicorns, with Barnier directly goading Davis on Monday for a supposed lack of “serious negotiations” so far. There were no such remarks in today’s press conference, with Barnier instead praising the “competence” and “serious commitment” of both negotiating teams. Following the UK team’s legal demolition of the EU’s Brexit bill demands on Wednesday, he was probably wishing the UK had a bit less of both.

The British counter-narrative to EU accusations of unpreparedness has been that a stubborn and inflexible European Commission is unreasonably holding up the talks in the face of fair and serious proposals from the UK. This stems from the EU’s insistence on a strict sequencing of the talks, with “sufficient progress” needed on what the EU has designated “separation issues” before talks can move on to the future relationship between the two sides – citizens’ rights, the Irish border, and the financial settlement.

The UK’s decision to publish position papers which cover these issues but also look ahead to the future relationship – which it argues is essential to properly resolving many of these separation issues – has predictably been given short shrift by the Commission, and has raised the tension between the two sides with the Commission unhappy with what it sees as attempts to undermine its authority.

However, around Europe and indeed the UK, businesses and politicians are starting to pay proper attention to what the UK is proposing, and many cases, liking the look of it. The President of the French region of Hauts-de-France, for instance, broke ranks yesterday to praise the UK’s proposals on streamlined customs arrangements, which will have a particularly significant effect on his region containing the port of Calais.

The longer the Commission continues to put off trade talks, the more others around Europe will start looking at the issues the UK is putting on the table and asking why the Commission isn’t talking about them. The logic of securing citizens’ rights first is eminently sensible, but the EU’s position that receiving a large dollop of UK taxpayers’ cash is somehow an essential prerequisite for trade talks to even begin is unlikely to garner anything like as much sympathy, and will only come under more scrutiny the longer the deadlock continues.

3. Davis hits his stride, Barnier hits out at the Council

There was a marked change in demeanour of the two chief negotiators in the final press conference compared to what has gone before, with Davis calmly but firmly defending the UK’s stance with a renewed confidence, while Barnier came across more “defensive politician” than “unflappable bureaucrat”, as he has generally done in the past.

Davis was particularly robust on the UK’s approach to the Brexit bill, stressing that the UK would always meet its international obligations, but that those obligations must be “real” and “well-specified”, saying that he had a duty to UK taxpayers to make sure that every line of the EU’s Brexit bill demands was rigorously challenged. A Barnier barb about British “nostalgia” was cooly dispatched with an off-the-cuff quip from Davis not to “confuse a belief in the free market for nostalgia.”

Impromptu verbal sparring aside, it was notable how Barnier’s responses to the charges of inflexibility levelled at him centred less around trying to defend the EU’s sequencing in its own right, but more on deflection, with Barnier frequently alluding to the fact that he was only able to negotiate within the mandate handed to him by the European Council of member states. The fact that Barnier felt the need to depart from the trope of unbreachable EU unity and pass the buck instead is a further sign that UK pressure is slowly starting to be felt.

With EU officials indicating that the European Council has yet to set out in detail what its criteria for “sufficient progress” are, Barnier’s effective admission that his hands are tied on the big compromises – over sequencing and the role of the ECJ – will give Davis renewed confidence that the UK’s new proactive strategy should ultimately pay dividends, as European leaders come under pressure themselves to give Barnier more room to negotiate.

However, while both sides are well-aware that stoking rows is a key weapon in a successful negotiating strategy, this does not cancel out the fact that the mood has been particularly ill-tempered at this round of talks. While this is unavoidable in the period immediately around a negotiating week as each side tries to establish its preferred narrative and jockey for leverage, a week or two of détente would not go amiss right now, before tensions inevitably ramp up again ahead of the next negotiating round.

4. Timing isn’t everything

The UK’s refusal to budge so far over the Brexit bill has lead the EU to cast doubts on its original pencilling in of October as the time when talks would be able to move on to the future relationship. Barnier himself is particularly fond of referring to ticking clocks at every given opportunity – this is an area where the EU clearly feels it has the upper hand. Indeed, a well-worn EU negotiating tactic is to stall for extended periods of time to stir up a sense of crisis in its negotiating opponent, before striking a deal at the last minute after the other side blinks.

However, Barnier’s confirmation during the press conference that a transitional period remains on the table if the UK wants it – as mandated by the negotiating guidelines set by the Council – removes much of the pressure on the UK to give in to the EU early or risk running out of time. Both sides now appearing to be working under the assumption that a transitional period will essentially perpetuate the status quo immediately after Brexit, which should give the UK more room to hold out for concessions.

The press conference itself ended on a rare note of agreement between Davis and Barnier, when they both agreed that the quality of deal was more important than getting it wrapped up as quickly as possible. In terms of getting the best possible deal at the end of the process, that suits the UK just fine right now.