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Ignore the rhetoric – a UK-EU trade deal may be closer than we think

Though politicians are still talking about no deal as a serious prospect, behind the scenes, negotiators may be closer than ever to clinching a deal, says Jonathan Roberts, director of external affairs at the CLA.

In 2006, at the end of a gruelling election campaign, celebrated political strategist David Axelrod exclaimed ‘I want this to be over more than I want to win’.

 

I wonder how many British and European negotiators feel the same way.

 

It is almost four and a half years since the UK voted to leave the European Union. A baby born on referendum day will have now started school.

 

For arch-leavers and arch-remainers, it’s been a difficult time fraught with unpleasantries and anger. But as this difficult period draws to a close, I find myself optimistic that a deal is still possible.

 

Just a week ago this will have appeared unlikely, when President Macron of France reiterated his demand for French fishing boats to have the same access to British waters as when the UK was in the EU.

 

Unreasonable

 

It’s always been an unrealistic, indeed unreasonable demand – and many in Brussels know it.

 

But given Macron’s dire approval ratings and a general election in 2022, he has a short-term political incentive to hold firm.

 

I was reminded though of comments made by a friend who served in the Royal Navy as a liaison officer to the French military.

 

He told me, ‘when you sit down to negotiate with the French, remember you are dealing with a thousand years of rivalry. It’s in our DNA. We give them a kicking, they give us a kicking, and then we get on with whatever we’re meant to be doing’.

 

The ease with which the UK and Norway agreed fishing rights last week shows there is a template for agreement.

 

Satisfy

 

If negotiators can kick the can a little further down the road to satisfy Macron’s political dilemma, then my sense is the middle ground is to see a new fisheries ‘implementation period’ of up to five years, allowing EU boats continued access for the immediate term but with an eventual agreement of quotas negotiated on an annual basis.

 

State aid is another curious one. The EU has demanded the UK aligns itself with EU state aid rules.

 

Again, this was always unrealistic, but a landing ground is possible if the UK publishes its plans for a domestic state aid regime (core principles already exist within its free trade deal with Japan), allowing both sides to agree a dispute mechanism should there be cause for complaint.

 

Interestingly, with the UK typically having a less interventionist approach to industry, it would in all likelihood be EU member states, not the UK, falling foul of any such agreement.

 

Protecting

 

And so we come to the final sticking point – the question over the EU protecting its internal market.

 

The allegation has long been that the UK will significantly reduce all regulation and become a ‘Singapore on Thames’.

 

There’s no real substance behind that view; many might say the UK was a driving force behind raising the EU’s standards, not the other way around, and there is no public appetite for deregulation in either the UK or Europe.

 

But it is reasonable of the EU to want to ensure the UK cannot undermine its single market (and vice versa) by weakening its regulatory regime.

 

The EU has now dropped its initial demand for any alleged infringement of EU rules to be adjudicated solely by the European Court of Justice.

 

Balanced

 

This change now opens the gate for both sides to develop a more balanced dispute mechanism.

 

Two markets with high standards handling their disputes fairly and maturely as two sovereign equals – it could catch on.

 

I think it’s significant that Michel Barnier addressed the European Parliament last week saying compromise is needed on both sides.

 

It was a stronger and clearer statement to his own audience than we’ve seen before, and it clearly satisfied British negotiator Lord Frost – who will surely know he will have to relax his red lines too.

 

The question remains as to exactly what latitude both negotiators have been given by their political masters to get the deal over the line.

 

It is difficult to imagine what will happen if they fail.

 

Accurate

 

So much has been said – some of it accurate and some of it hyperbole – for so long about the impacts of no deal that it is impossible for many people to know what to believe.

 

What we do know is no deal would in all likelihood be profoundly damaging to significant sections of British, and to some degree European, agriculture.

 

Like David Axelrod, most of us want this to be over.

 

In one way or another, it soon will be.

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