How the EU trade negotiation impasse could (and probably should) be resolved with a quick phone call

The torturous Brexit negotiations have been handed a lifeline today. Pessimistic noises were made on Saturday that whatever deal was there to be done was nigh on dead in the water. But a phone call between Boris Johnson and Ursula von der Leyen led to an agreed extension to the deadline and talks will continue.

In truth, only two issues remain outstanding. First, there is the symbolic issue of fishing rights. Second, there is the issue of a ‘ratchet clause’ that would mean the UK had to change its rules every time the EU decided to change its own.

In reality, the issue of fishing is so simple to resolve as to be utterly ridiculous. Everyone has noted that UK fishing makes up less than 1% of GDP, so economically it is no hill to die on. But the issue is very much symbolic of the wider issue of sovereignty. There was a bit of stickiness regarding a phase in period of new rules. The UK want a 3-year phase in, the EU want 10. Meeting in the middle is simple enough.

More wrangling regarding fish revolves around exactly who can fish where. The Guardian report:

The UK is leaving the common fisheries policy and taking back control of its exclusive economic zone: 200 nautical miles from the territorial sea baseline or to the halfway line in smaller stretches of water. Downing Street wants annual negotiations with the EU on what European fishing fleets will be allowed to catch in its sovereign waters based on “zonal attachment”.

This means shares would be set according to the percentage of fish inside each side’s exclusive economic zone. It is argued that this system would be fairer and more scientific. It is already used by the EU in its annual quota-setting talks with Norway. The UK also has priority stocks – around 80% of all the stocks in its waters – where it expects to enjoy an increase in catch. And it wants the six- to 12-mile area around its coast to be exclusively used by British fishing vessels.

The EU are resisting these measures. But given that Norway already use the system being proposed (a point we will return to shortly), there is no reason for the EU not to permit this. Further, as the Guardian report:

In Brussels, the issue of fishing access is not seen as a deal-breaker. “The negotiation is transactional, not about principle, and so is eminently doable,” said one official. In London, the sentiment is not shared. Johnson has repeatedly emphasised its importance to the EU side.

As such, there seems to be little reason for the EU not to largely give way on this issue. Equally, there is little reason for the UK to negotiate around the small 20% figure that would suggest a willingness to concede something on this issue, with minimal implications economically.

The more fraught issue is the so-called ratchet clause. All sides have agreed to non-regression clauses. That is, the terms agreed at the point of the deal cannot be reneged upon meaning neither side can undercut a common baseline of standards. This is not at issue. The problem lies in the fact that the EU insist that if they decide to enhance standards beyond the stipulated terms of the deal, the UK must follow suit and align with their regulations despite not having entered the agreement on those terms.

Of course, the EU are trying to protect the integrity of their single market and future-proof any clauses against inevitable evolution that renders the non-regression clauses obsolete. By the same token, the UK (in my view entirely legitimately) are not prepared to simply allow the EU to change whatever clauses they want and sign up in perpetuity to align with them regardless of what they might be.

In truth, however, the issue of sovereignty – that Boris Johnson (rightly) recognises was a major driving factor in the desire of many to leave – was not really rooted in issues of trade for most people, but in the political goal of ‘ever closer union’, Guy Verhofstadt’s stated aims to create a federal European super-state, and the unelected technocrats from whom various laws emanate. The matter of sovereignty was related to the democratic deficit and the imposition of political will apart from any democratic mandate.

To that end, as Peter Hitchens notes on his blog:

Anyone who knew anything about the EU issue said years ago (as I did) that our best way out of Brussels rule was to copy Norway – stay in the Single Market and get rid of all the political and legal baggage. 

Zealots, who treasure the delusions that we are still a major power with a thriving economy, derided this. No, they said, we must have a total breach, and then we will soar free, our Victorian greatness restored. Few of them ever grasped what it will mean to leave the Single Market, into which our economy has been totally integrated for decades, and they will shortly have a fascinating lesson in that. The trouble is, the rest of us will have to have that lesson too. And it is hardly surprising that France, which has so long resented our standing in Europe and the World, sees this as an opportunity to take us down a peg or two. But remember, before complaining, that we gave them this chance.  

He goes on to say:

The debate has always been between hard leavers and hard remainers. The whole idea of intelligent compromise has been drowned by militant, angry passion. And here I am, dismissed as an ‘extremist’ or worse by much of our culture and by the BBC, and presumably as a ‘traitor’ by many on my own side. Well, I did try to tell you.

Minimally, EFTA (the so-called ‘Norway option’) has been available all along. Whether it is viewed as a stop gap on the way to producing a better trade deal over the longer term (as originally suggested would be wise by Yanis Varoufakis) or it is determined to be the end in itself, it would ultimately achieve the key aims of most who voted for Brexit. It would remove us from the customs union, ECJ jurisdiction and ‘ever closer political union’ – wresting back sovereignty in parliament according to the democratic will of the British people – without totally unhitching ourselves from the Single Market.

Boris Johnson is entirely right that the issue of sovereignty is the key one. It is most certainly – along with the closely associated issue of popular democracy – one of the key drivers of the vote to leave. It is, interestingly, the two issues which uniquely united Bennite Socialists (and those who, whilst not fully paid up, are of a similar Socialist bent like me) with old-fashioned hard right Conservatives along with a host of people in between.

Where Johnson is making something of a miscalculation is understanding exactly where the issue of sovereignty lies. Most people are not concerned exactly what shape our trading relationship with the EU takes. As long as there aren’t food shortages and massive price rises, I suspect the intricacies of the trading relationship will entirely pass people by. No, the issue of sovereignty rested in the issues surrounding ECJ jurisdiction, the democratic deficit and the issue of unelected law-makers. All those issues were, in effect, resolved when we left on the 31st January. The remaining issue now is how we trade with our neighbours and, it seems to me, EFTA membership would grant us a trading relationship with minimal disruption without undermining the issue of sovereignty that Johnson rightly recognises is at issue, but wrongly calculates over what issues it was actually pertinent.

I have no problem with the government attempting to negotiate a better trade deal over the long term if they wish. But I think Yanis Varoufakis was ultimately right:

But, of course, when Socialists from Greece and Mail on Sunday columnists speak, it’s easier just to dismiss them as lunatics and have done with it.