The Johnson deal is not perfect, but we cannot afford to delay the Brexit process any further

The Johnson deal is not perfect, but we cannot afford to delay the Brexit process any further

I read Ben Habib MEP’s article on BrexitCentral yesterday and thought it important to explain in a bit more detail why I think he is wrong – and why the Brexit Party is risking Brexit itself and doing so based on a false premise.

I have great respect for all those who have fought so hard for the UK’s freedom. But the single biggest threat to that freedom now is an election which does not deliver a workable majority for the government to embark on the all-important phase 2 negotiations. I will take some of Ben’s key points in turn.

He says:

“Some changes have been made to the Political Declaration which sets out the framework for the UK’s future relationship with the EU. Before going into these it is important to note that Article 184 of the Withdrawal Agreement commits both the UK and EU to use best endeavours to give effect to the terms of the Political Declaration. And because the Withdrawal Agreement is subject to EU law, it is the ECJ that would determine whether or not this best endeavours undertaking had been fulfilled.”

This misunderstands the fundamental nature of the change in both the Withdrawal Agreement and the Political Declaration. Article 184 was certainly a problem, as long as the Political Declaration made a customs union in goods the sought after end state. But that is not the case any more. Gone is the requirement to build on the backstop, gone is the requirement to start from a single customs territory. No, the Political Declaration now makes clear that the Free Trade Agreement is the ultimate end state.

Perhaps more important than this, the significant change from May to Johnson was the change from asking the EU for frictionless trade to asking it for trade as frictionless as possible. That seemingly small change is a seismic shift for the EU. The former can only be delivered by a customs union, the latter can be delivered by a Free Trade Agreement. By doing this, Boris opened the door to a Free Trade Agreement in the end state, and since that was done, the EU had no problems accepting it. We were no longer seeking the irreconcilable duo of an independent trade policy and frictionless trade with the EU which haunted the May negotiations. Since a Free Trade Agreement is the end state, we should welcome Article 184’s best endeavours clause and be prepared to use it if the EU refuses our reasonable proposals.

Ben is concerned about the provisions in the Political Declaration as follows:

  • The UK is bound to operate a regulatory “level playing field” with the EU (para 77 amongst others). This, together with Northern Ireland’s commitment to regulatory alignment, would neuter the UK’s ability to compete as an independent nation and would make establishing new trade deals problematic. The President of the USA was absolutely right when he cited this difficulty.

This is categorically wrong. So-called Level Playing Field obligations apply in all Free Trade Agreements. We will certainly have labour, environmental, competition and state aids chapters, much as I have set out in our draft UK-EU FTA. This is what happens in every trade deal and it will also happen with the US, which is why the US spelled out in their negotiating objectives that the US-UK FTA would ensure that neither side lowered its labour and environmental standards for trade advantage. Indeed this point seems to have been missed by the Labour Party as well, in their rush to paint the US as a villain and not an ally.

But here Ben does make an important point. If we decide not to change our regulatory system (through our own choice), or agree language in the UK-EU FTA that binds us to EU regulations (again through our own choice), then it would be absolutely true that a serious independent trade policy would be impossible to execute. But we do not hear Brexiteers pressuring the government to set its domestic settings to allow for Sanitary and Phytosanitary (SPS) divergence for example (i.e. to allow GM food). The UK’s SPS rules are currently in violation of WTO rules. We must obviously bring them into compliance. Why do we hear nothing from Brexiteers on this point? It’s a bit pointless creating the mechanism to allow divergence at some cost to our EU trade if we are not going to use it. We may as well stay in the EU if we aren’t going to be clear about this.

  • The UK would be bound to align itself with EU state aid, competition, employment, environmental and tax laws, to name a few other obligations. These too serve to neuter the UK’s ability to freely govern itself.

There is no such requirement in the non-binding Political Declaration. It is up to us to negotiate sensible provisions in these areas (I have already done so in the UK-EU FTA referred to above).

  • The UK would be obliged, to the extent possible, to cooperate with EU defence projects and military inter-operability (para 102). No sovereign state could agree to such commitments, which would be made under EU law and subject to ECJ supremacy. The fact that military cooperation features in what should purely be a trade deal informs you that the Political Declaration is about a great deal more than just trade.

The Political Declaration does not oblige the UK to do anything. It allows the UK to cooperate, as we should where we are able and it does not affect our sovereignty and – critically – our US and Five Eyes relationships. There is nothing in the Political Declaration that prevents this.

  • Of totemic importance, the UK would have to go on making available access to its territorial waters for EU member states’ fishing (para 73). British coastal communities have been terribly badly damaged by the over-fishing of our waters by these states and the practice has to be stopped.

When we are clear of the EU, we will retake our seat at the North East Atlantic Fisheries Organisation and other relevant regional organisations. In these organisations, we should strenuously argue for a fair quota. What we do with that quota is up to us. But all nations allow some limited fishing rights for others in their exclusive economic zones. It would be ironic if those who support trade liberalisation – and open and competitive markets – then demanded that no other country should have any access and that all fish caught in UK waters should be landed in the UK. That would be the same sort of protectionism the EU loves and from which we seek to free ourselves. We have set out what constitutes a smart fisheries policy post-Brexit in the IEA paper, Net Gain. The Political Declaration does not preclude these arrangements.

  • There are no stated termination provisions in the Political Declaration for these future arrangements which would be implemented as a treaty. In the absence of express termination provisions, terminating treaties must be undertaken in accordance with the Vienna Convention of 1969. The grounds for doing so pursuant to that convention are extremely narrow, potentially committing the UK to this new treaty in perpetuity.

This is not the case. The Political Declaration is not legally binding. It was the case that the May backstop could last forever, and because that was written as a customs union for all of the UK, we could indeed have ended up trapped in it. The Northern Ireland protocol applies only to Northern Ireland, not Great Britain, and will be superseded by the provisions of the FTA. We will either have an FTA or we will not. If we do not, we will fall back on WTO rules and any mini-deals the EU is willing to do, as well as the NI protocol. This would have a disruptive effect on our economy, and we should therefore be doing everything we can to mitigate this by the rest of our trade policy, and making our domestic regulatory system more open and competitive.

We all know this treaty is not perfect. It isn’t even good. If we had to do it all over again, we could certainly do a better job. But, it is infinitely better than the May treaty. It was negotiated by a team who inherited a truly disastrous, poisoned chalice. They have done remarkably well in a short time which shows what we can accomplish if we would only get on with the FTA negotiation itself. We cannot afford further delay. We cannot afford a hung parliament again.

One reason I was prepared to support the May treaty on the third meaningful vote was because such a vote would have ended May’s tenure and led to a new team and approach. We could have been negotiating the FTA from May of this year, instead of potentially from February 2020 or later. Time matters. The US issued their negotiating mandate for the UK in January of this year. They are perplexed and frustrated that there is still no negotiating mandate from the UK. They will go into primary season in March of next year, and trade promotion authority will expire in July. We have a tiny window with the US and it is closing. Why do Brexiteers say nothing about this?

I wrote in Plan A Plus in September 2018 that the goodwill of our trading partners was wearing thin because of our lack of clarity. Imagine what they feel now. It would be strange if we secured the perfect deal from the EU only to find that all our trading partners had moved on. The Australians and New Zealanders are negotiating with the EU now and soon that negotiation will be more important than their proposed negotiation with us. The EU, by contrast, is quite happy with this delay as every day, it makes our position more and more exposed. Every day of more uncertainty means business decisions on capital allocation are being made and we are losing out.

If there is a hung parliament again, the Brexit Party may well bear responsibility for it. But even if Boris Johnson has a workable majority, I would urge Brexiteers to focus their fire and be as resolute and uncompromising as they can be on the following key points. This is where the real battle lies, not in whether the transition period will be extended or not, before we have even started negotiating.

  1. Why is there no negotiating mandate for the UK?
  2. Why are we not clear that we will have regulatory flexibility and we will use it to create the most pro-competitive regulatory environment on the planet?
  3. Why do we not have clarity on the country specific negotiating mandates for the US, EU, CPTPP, Australia, New Zealand and Japan?
  4. Why is our foreign service not developing leverage from all of our trading partners to push Brussels to accept our reasonable proposals?
  5. Why is the Northern Irish Unionist case for what is necessary to protect the Belfast/Good Friday Agreement in our UK-EU FTA and in the NI Protocol not being aggressively put to foreign governments by our own?

Brexiteers need to hold the government to account on these questions. Ultimately international negotiations have both political and legal dimensions. Hard politics usually wins – especially if political and economic power is properly applied to the negotiating process. There is now a pathway to success. I urge all Brexiteers to accept it, imperfect as it is, and focus their fire on the critical issues which will determine our future.