The EU managed to put paid to one pet Brexit fantasy today, and via a concrete action, rather than the usual route of the EU’s chief negotiator Michel Barnier and European leaders saying things the UK keeps refusing to hear.
The Government has been doing the Oxbridge version of Trump’s patter that he’s going to be able to negotiate great trade deals once it is free from those nasty Brussels overlords. Due to having the backing of a captured and clueless press, plus terrific diction, the boosters have had their ideas be treated with far more seriousness than they warrant.
Given that the EU27 is a much bigger market than the UK is, why anyone should be champing at the bit to negotiate a trade pact with the UK is a bit of a mystery. But Brexiteers have rung the changes on this theme, arguing, for instance that the UK can become the new Singapore (forgetting that Singapore has all of 5.6 million highly educated people, clean government, and a strategically advantaged location) or that the Commonwealth can make up for diminished commerce with the EU.
Today, the EU announced that it had approved starting bilateral trade negotiations with Australia and New Zealand. The Guardian highlighted the implications:
The EU has leapt ahead of the UK in the pursuit of free trade deals with Australia and New Zealand after member states gave the green light for talks to start within weeks.
….the announcement from Brussels opens up the possibility that the EU could enjoy better terms with the two Commonwealth nations after Brexit than the UK will…
The international trade secretary, Liam Fox, had recently spoken of “reinvigorating” the Commonwealth partnership with a host of trade deals after Brexit, labelled “empire 2.0” by sceptical Whitehall officials.
But the UK will not be able to start its negotiations over future trade with New Zealand and Australia until 30 March 2019. The European commission president, Jean-Claude Juncker, has vowed to complete the EU’s talks with the two countries by 31 October of that year, when his time in office expires.
Another proof of the EU’s relative advantages is that it expects to be able to protect key industries:
The EU has made it clear before its negotiations with Australia and New Zealand that the size of its market offers bountiful opportunities, without the need for the bloc to expose its agricultural sector to cheap imports.
The mandate given to the commission for the talks, due to be formally launched in Wellington and Canberra next month, envisages special treatment for agricultural goods in order to protect European producers.
In contrast, there are some voices in the Brexiter wing of the Conservative party who would like to radically liberalise the farming sector in the UK, and open it up to challenge from highly efficient antipodean agricultural exporters.
And when we see the EU showboating with the announcement of trade talks with Australia and New Zealand – that could give it better terms than we could achieve – we have to recognise that the free-trade ambitions of the “Brexiteers” are as empty as their rhetoric.
The EU getting out ahead of the UK is important for a second reason: trade negotiators have limited bandwidth. Trade agreements, unless they are largely dictated, US style, take time to work though. I would be very much surprised if the EU and their new antipodean counterparts reach a final understanding by the end of October 2019. In these treaties, the devil is in the details, so even if Juncker can correctly claim that the EU and Australia and New Zealand have settled the principal terms, that is a long way away from a completed deal.
The UK starting later means it will unquestionably second in the queue. Australia and New Zealand will no doubt also make efforts to move a UK deal along too, but unless the EU negotiations go pear shaped or are suspended, it’s highly unlikely that the UK would be able to leapfrog the EU talks.
But the British officialdom keeps acting as if all these pesky details will somehow be sorted out, when if even they dimly understood the profiles of the many problems, they don’t begin to have the operational capacity to address them. And as we have said repeatedly, it is ordinary British citizens who will bear the cost of this grotesque leadership failure.