Brexit – Friends no more?

epa08265018 European Union chief Brexit negotiator Michel Barnier (R) and the British Prime Minister's Europe adviser David Frost (L) at start of the first round of post -Brexit trade deal talks between the EU and the UK, in Brussels, Belgium, 02 March 2020. The first round of talks will run until Thursday 05 March. EPA-EFE/OLIVIER HOSLET / POOL

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This article by Matthew Bugeja was first published on Diplomatique.Expert

Brexit is done. Sort of. But not really. The interesting part is just beginning.

When there is a divorce, there are two parts (although those who have been through a divorce might dispute this, depending on how cooperative their former partner is during proceedings, but I digress). There is the part in which the partners divide up assets and agree to a split in the first place. That part is done, as far as the UK & the EU are concerned. Then there is the second part, which can be a little tricky in some cases. That is trying to determine how the two parties will coexist after the divorce, which can be a minefield when children are involved. In the case of the UK & the EU, there are no children per se, but neither side is looking to ignore the other once the UK no longer forms part of the EU’s legislative framework. Trade is a big deal for the two sides, amongst other important areas of cooperation such as security, justice, taxation and financial services.

That is why developments in the past week have taken a rather nasty turn.

This past Thursday, the British government released its objectives for the trade talks, which would guide its mindset moving forward.  The UK has rejected an EU demand that it remains close to European standards on labour issues, environmental protection and state aid. All of these have their own merits, but the last one in particular will be seen as jarring in Brussels. State aid is effectively when the national government intervenes in order to assist an industry or company through the means of subsidies or direct financial intervention. If the British government were to do that, it might provide British companies with what is a comparatively unfair advantage in comparison to EU companies and governments, who must abide by strict rules in cases of state aid.

To add to the tensions, the Prime Minister’s top advisers have said that if the outlines for a deal were not completed by June, they would begin to make preparations for a no-deal Brexit. This is something that economists and policy makers have long warned would have considerable implications for the British economy, with some impact also for the European economy. The British government is also rejecting any notion of the European Court of Justice being granted the ability to adjudicate whether it is abiding the terms and standards of any deal agreed. In short, the two sides are very, very far apart on some fundamental issues.

Could this be a part of the British negotiating strategy? Of course. When two sides approach a negotiation, they tend to be quite far apart on reaching a mutually agreeable compromise. The difference here, however, is that the British have made what they call “reclaiming sovereignty” a key tenet of the negotiations, and of the new Boris Johnson government. This means that they would find it difficult, in principle if not reality, of reaching any compromise which makes it seem like not much would change in the relationship between the EU & UK. Politically, it can be done, with a bit of PR spin. But reclaiming sovereignty is a big issue for Boris Johnson, and he will make sure that the European authorities know that.l

A deal can be reached between the two sides. It is not impossible. But given the short time frames, being that of the end of 2020 (let alone June), it is going to be quite difficult to reach a comprehensive agreement that covers all sectors, ranging from health to immigration, from financial services to trade. All the good will in the world cannot overcome the communication required between negotiators and their leaders, whilst balancing against impacts on national industries and the general population. The UK has made it clear that it will not budge on a few key issues, but they will have to, if their aim is to reach a mutually-beneficial settlement by the end of 2020. Time is short. Now is the time for the opening gambits and posturing, but that should be disposed of quickly, and the real negotiating should begin sooner rather than later.

Brexit has been a challenging issue for the last four years or so. It is time that it is brought to a close. Negotiations are tough affairs, not meant for the faint of heart. But if the UK and the EU are to move forward together as partners, there needs to be some element of flexibility. Without it, they are bound to drift apart – and that would be unfortunate for all involved.

This article by Matthew Bugeja was first published on Diplomatique.Expert.

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