Brexit: Decisions

It would be easy to miss that the Brexit trade deal negotiations have entered what was supposed to be a do-or-die week, with Boris Johnson to speak directly with EU Commission chief von den Leyden. And as we’ll explain, the process has gone full circle. As we forecast back in 2018, “die,” as in no-deal, remains higher odds than conventional wisdom would have you believe.

But to the state of play first. Consistent with an account from RTE’s Tony Connelly last week, the EU is prepared to let the negotiations go down to the very wire. From Politico’s European report yesterday:

HAPPY BREXMAS: The European Parliament is preparing for an extra plenary session between Christmas and New Year’s Eve to give its consent to a possible post-Brexit trade deal with the U.K., according to several EU officials and diplomats. It is likely to be held on December 28, to give EU governments the opportunity to have the very last say, as foreseen by the bloc’s procedures, before the end of the U.K.’s Brexit transition period on December 31.

Unavoidable session: MEPs will be ready to vote on a potential agreement with the U.K. “at any time,” an official told Playbook. The extra session is “unavoidable” in case there is a deal to vote on, said another. We’re beyond the point when Council could provide a text for MEPs to vote on during their ordinary plenaries, Council Secretary-General Jeppe Tranholm-Mikkelsen told EU ambassadors on Friday, according to three diplomats present in the room.

The burden of the office: Some relevant MEPs have said they want to thoroughly study any deal and won’t be pressured into rubber-stamping it. But there’s a broadly shared view among Parliament’s political leadership, according to officials from several groups, that it won’t be a parliamentary recess that pushes the U.K. and EU into the abyss of no deal.

Barnier’s latest comment signals a lack of progress:

And in case you wondered, an extension isn’t an option:

Needless to say, the EU stance also confirms the views of David and PlutoniumKun (and forgive me for not tracking down who offered this observation first), that the EU would not be the one to put an end to negotiations (even though the UK press would manage to find a way to do in the event of a no-deal regardless). The day before this plan was leaked, Richard North spilled some pixels on what the ratification process would/should be, assuming a deal. The implication is the EU is willing to go very fudgy on process, and risk having a roadblock thrown by a holdout, as the Wallonia did with the Canadian trade pact in 2016. The assumption clearly is any problems could be sorted out, presumably via a combination of pressure and bribes.

But let’s go back to the main event, which is deal or no deal. The propensity of most commentators is to project Anglo business-world assumptions onto this process: “Of course there will be an agreement. The stakes are too high not to.” But they said the same thing about Greece in its 2015 bailout negotiations and there was no deal by the deadline of the end of June. As established readers will recall, the ECB yanked its emergency support for Greek banks, which led to the Greek banks going on what amounted to a bank holiday, with funds withdrawals limited to small amounts at ATMs. Food shortages were starting at the wholesale level when the Greek government capitulated weeks later and accepted worse terms than were previously on offer.

Let us not forget that the UK’s choices are now between a very skimpy deal, which would presumably include no tariffs and no quotas, but not much else. Even in that scenario, there would still be a great deal of economic disruption because the UK would still be subject to “non-tariff trade barriers,” as in other border frictions, like documentation requirements, VAT reporting/deposits, and for food products, physiosanitary checks.

There’s plenty of tearing of hair and rending of garments on Twitter:

More cheery news, first from Trans.Info early last week:

Richard Ballantyne, chief executive of the British Ports Association, has said that it „could be completely impossible” for the UK to complete customs checks if it has 3rd-country status with the EU.

Ballantyne made the comments during an appearance at a House of Lords EU goods sub-committee yesterday.

The BPA chief warned that the third-country checks entailed by a departure from the customs union could make it „completely impossible” for some ports to deal with in a practical and sensible manner:

„The Animal and Plant Health Agency effectively set specifications about the amounts of checks goods coming in from outside the EU should be subject to. Their regimes that mirror those third-country checks in a no-deal situation, as we may find ourselves in, effectively could be completely impossible for certain ports to accommodate with any practical, sensible approach.

….The intervention from the BPA comes roughly a week after the Road Haulage Association, National Audit Office, UK Warehousing Association and British Meat Processors Association all issued warnings about problems associated with the UK’s departure from the EU Single Market.

And from Chris Grey’s latest post:

So the situation we now find ourselves in did not arise by accident and it isn’t just something to do with the current phase of Brexit. It is the latest stage and the latest consequence of years of incompetence, if not worse. For, of course, the incompetence is inextricably linked to the dishonesty of the claims and promises made. To give just one example – but a major one – the years of lying about how the UK could leave the single market and customs union but still have ‘frictionless trade’ or something very close to it explains both why no realistic plan for the future was developed and why preparations for border controls were not begun until far too late….

A small round up of recent examples includes: shortage of warehouse space, lack of information for road hauliers(final guidelines are apparently due on 7 December!) alongside lack of awareness amongst truck drivers (£),  no regulatory equivalence for financial servicesin place (this is a separate issue to the negotiations), several trade agreements not yet rolled over, Felixstowe container port in chaos(partly because of pre-Brexit stockpiling), projected labour shortages across numerous sectors(including social care and – yes – fishing), and the dire lack of preparations for the border between Great Britain and Northern Irelandwith attendant risks of a “bonanza for organized crime”.

And remember, there’s no services deal for the City. The EU has already said it’s not giving UK firms “Covid ate our schedule” waivers. Other professionals are finding that efforts to operate in the EU without having operations there are hitting a wall. From Law Gazette earlier this month:

Thousands of England and Wales-qualified solicitors who invested in Irish qualifications in order to protect their EU practising rights after the end of the Brexit transition period appear to have wasted their money.

A review by the Law Society of Ireland concluded today that such solicitors will not be entitled to practising certificates unless they have a presence in the republic The news will come as a blow to the firms based in England and Wales who had rushed to register their lawyers in the wake of the UK voting to leave the EU…

A statement published by the society in Ireland said: ‘Irish qualified solicitors who are based in England and Wales and are seeking a practising certificate from the Society will not be entitled to a practising certificate. This will be the case whether they attempt to maintain certain practice rights in the EU post-Brexit or otherwise. Such solicitors will not be issued with a practising certificate by the Society unless they can demonstrate in the course of their applications that they practise (or intend to practise) in Ireland from a physical establishment in Ireland. Moreover, they must comply with all other relevant legal requirements, including having appropriate PII in place.’

Needless to say, with all sorts of pain about to start, you’d think the Government would feel pressured to alleviate it, since tariffs would unquestionably make this bad situation worse. It’s also often neglected (and we are guilty of this too) that the “deal” would include security provisions (over my pay grade, but I assume to include things like mutual access to databases about suspects). But the Tory press over the weekend had plenty of pieces pumping “No deal is better than a bad deal.”

Recall that on substance, there’s been only marginal progress on the big sticking points: level playing field, fisheries, and “governance,” which means dispute resolution. The fact that the Government tried to repudiate part of the Withdrawal Agreement via the Internal Markets Bill, which would have negated certain sections of the Northern Ireland Protocol, was a stunning demonstration of the UK’s bad faith. The fact that the House of Lords forcefully repudiated the bill does not negate the proof that the Government isn’t “agreement capable,” and the Government has plenty of room for to make mischief independent of Parliament.

Boris Johnson has lost his Svengali, Dominic Cummings, who was also all on board with a crash-out. However, the tabloids are reporting that Cummings was sacked not over Brexit but for insulting Johnson’s fiancée by calling her “Princess Nuts Nuts.” As a result, his ouster may not mean much for the conduct of Brexit. The Financial Times over the weekend argued that Johnson didn’t know his own mind, a grim prospect:

Are Mr Johnson and Lord Frost now ready to make compromises in the next few days to secure a trade deal with the EU — without having Mr Cummings’ favourite refrain “fuck ’em” ringing in their ears? Or will they double down to prove to Eurosceptics they are willing to embrace the hardest of all hard Brexits in the name of national sovereignty?

One senior official says: “To tell you the truth, we don’t know — and frankly, I don’t think the PM knows either.”

So here we are, after a long-ish transition period, and the basic conundrum remains. The two sides don’t have an overlap in their bargaining positions.

It might be possible to stitch up a compromise on fisheries, even though, as Richard North pointed out, any quota-monitoring system would be so costly that the UK would be better off to give the EU all the fish and pay the fisherman their pre-Brexit incomes instead.

However, level playing field is an existential issue for the EU. Contrary to the claims of Tory pols and columnists, the Canada trade deal did include those protections. The EU is not going to budge. The Tories have made this issue into a threat to their pet sovereignity, even though Canada had no such qualms. So it’s about to become the hill on which they will die.1

And bear in mind that this process is about as damaging to UK businesses as it can possibly be. Many are under or unprepared for Brexit. Having no good idea whether there will be a deal or not only adds to uncertainty, complexity, and cost.

And if there is a crash-out, the odds are high that the UK will be back to the EU, petitioning for a trade deal. The EU won’t have any reason to offer a better deal than is on the table now; as with Greece, it might impose tougher terms on some issues. And businesses on the both side of the pond would suffer from having to adapt to the no-deal regime, then in comparatively short order, changing their procedures again to reflect whatever agreement emerged.

2021 is shaping up to be a year to remember, but not in a good way.


1 But they see this as “Charge of the Light Brigade” vainglory.

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  1. Halcyon (formerly AnonyMouse)

    Excellent summary of the utter state that we’re in at this point.

    I still suspect that some kind of “deal” will be arrived at somewhere close to the last minute – probably involving Boris accepting whatever is on the table and making the necessary concessions, then attempting to declare victory, as was done with the Withdrawal Agreement. It’s been left so late that hiccups in the ratification process could be a problem, although the idea of applying the treaty provisionally and then ratifying it later is some extra helpful flexibility on the part of the EU that may well be used.

    As well as generally despairing at the utter incompetence of the government and their disregard for anything like an orderly and organised process – Brexit having become quite the unloved baby now – I also despair at the vast majority of media coverage which is basically incapable of answering any of the detailed questions about what is at stake beyond “Deal or No Deal.” The fact that, for example, for most people there will be *more* not less red tape in the event of Brexit – that there is and always has been a fundamental tradeoff between regulatory alignment (on the flip side, sovereignty) and ease of access to markets – is still not being explained by anyone in the mainstream. Sir Ivan Rogers says it, Richard North says it, and serious analysts obviously agree with it, but most details of any of the tradeoffs beyond the psychodrama of “deal or no deal” are simply absent

    1. PlutoniumKun

      Its worth reading Chris Grey’s article for an overview of just how staggeringly inept the British establishment have been over Brexit.

      I do share your opinion that ‘something’ will be signed at the last minute. The irony is that the inability of the UK media to communicate adequately means that Johnson could well get away with calling it a victory and blaming any nastiness in early 2021 on the EU.

      One issue I think that will be worth looking at in the New Year will be the wider worlds conception of the UK. Its worthy of a few PhD’s in its own right, but from Asia to Africa to the US, my perception is that Britain has always been viewed with a curious mixture of dislike (from colonialism) to respect, with a good dusting of Anglophilia, especially among the elites worldwide. So far, Brexit has damaged, but not irredeemably destroyed this, as can be seen by the eagerness of Chinese in particular to keep buying UK property and invest there, and in many countries sending their youths to get a British education. It is still seen as a strong country and worth taking seriously over and above its actual size. It is usually seen as a senior peer of countries like Germany or Japan or South Korea, despite those countries being for the most part objectively speaking being richer, more powerful, and better run.

      But I do wonder if and when the realisation really sinks in about just how deep the rot has been, what will happen – I suspect that this reputational hit to its soft power, and in particular the faith by investors in its institutions, will be very severe, if very hard to quantify.

      1. Halcyon (formerly AnonyMouse)

        Thank you, yes, I meant to say that Chris Grey was another one of the people I go to for some more in-depth analysis. His blog has been consistently good at highlighting various issues. The bizarreness of it perhaps comes from the nature of who was calling for it and who the leadership has been. It was won in a referendum against the wishes of most of the establishment. Cameron resigned rather than deal with the fallout. Theresa May was never a Brexit ideologue and was more concerned with trying to navigate some impossible splits in her own parliamentary party and do things in “the national interest.” Boris Johnson only ever saw it as his means to getting into personal power and did not care at all about the details beyond banging some patriotic drum… the Faragists and the ERG were never in serious positions of influence and also never wanted to climb down from the revolutionary fantasy of an idealised Brexit to make any actual real-world compromise… the liberal media spent three years entertaining fantasies that the whole thing could somehow be undone or reversed (remind you of any Presidents?) and therefore not engaging with the actual substance of the issue… even supposed hardliner and Brain of Brexit Cummings really seemed to care about it more as a wrecking ball to the establishment with some side benefits like allowing him to chuck money at whatever startup was profiled in WIRED last week… in other words… there has been little incentive for many of the major players to actually come up with a coherent strategy or plan from this, and much more for political bleatings of no substance. Hence the lack of analysis.

        Something will certainly be signed and I imagine they are hoping to sweep any economic damage or disruption under the COVID/furlough carpet at this stage.

        With regards to the UK’s reputation, it’s hard to say that it hasn’t been pretty severely damaged at the very least in Europe. With Biden in the White House, Johnson suddenly seems out on his own as the right-wing populist tide starts to recede. It seems likely he’ll be jettisoned as soon as COVID and Brexit can conclusively be pinned on him, and then it’s back to two very similar shades of neoliberalism in Sunak vs. Starmer.

        I think it will just accelerate the decline. The UK is no longer that relevant as a bridge between EU and US. Eventually the advantage we have from a lingua franca is going to be eroded away [where are my Babel Fish? Surely this technology is forseeable in the next decade or two.] In the final global pecking order it would make more sense for us to be below DE, Japan and SK. Although maybe the recent promise of investment in the armed forces is a reminder that we still have nukes and are therefore special… but then again, does that help France?

        1. vlade

          DE, Japan and SK can have nukes probably within 18 months (at most), and a delivery platform not much later, if they put their hands to it.

  2. Ignacio

    The problem with fishing is that abandoning the Common Fishing Policy, that for some many years has been ruled by the EC in full competence, with a wide and complex regulatory body for every fishing zone, nearly every fishery and fishing ship, plus the technical details, plus the processing and marketing of fishes. This means a restart from 0. No EU ships fishing in UK EEZ and no UK vessels operating in EU EEZ waters. Total mutual exclusion from the market and a problem in the control and management of fisheries with the relocation of fleets. UK ships operating in 3rd country EEZ or international waters will require fresh negotiations with those. Regarding international waters, there might also be problems with the distribution of fishing quotas when the UK fleet no longer is subject to the combined UK-EU regulations.

    To avoid overexploitation, fishing collaboration is a must and this could be broken into pieces in a no deal scenario.

    1. Clive

      Yes, the Common Fisheries Policy (CFP) overwrote (irrevocably) the earlier Fisheries Convention

      Without the CFP, there’s simply nothing extant to govern one of the biggest, if not the biggest single fishing ground in Europe.

      So regardless, there’ll need to be some arrangement (like the U.K. has already completed with Norway). But then there’s nothing to govern how that arrangement would get brokered. It would almost certainly be a bargaining chip in any No Deal future relationship.

      1. Ignacio

        Indeed, though in my opinion, using fisheries as a bargaining chip is a recipe for disaster when full coordination is required in this activity. This has been tried to failure in a few instances in intl. negotiations. But I agree that some arrangement will have to be put in place.

    2. PlutoniumKun

      Welcome back Ignacio, good to see you back here.

      I don’t think anyone has any idea what it will mean for a fishing deal to collapse, not least because many Spanish and French boats are registered in the UK. It might be good news for fish as the harvesting might collapse, or it might be terrible news as fishermen go searching for other stocks. To take one example, if Scottish waters are off bounds for mackerel fishing, its possible boats will instead seek to ‘intercept’ the shoals earlier off the north-west Irish coast earlier in their life-cycle.

      Around the corner from my home, a very nice fish restaurant has just rebranded itself as a vegan sandwich shop. Maybe they’ve seen things coming….

      1. Ignacio

        Yeah, be prepared for the worst, just in case. Shippers will be under pressure to maintain their activity or face closure with the corresponding loss of business and employment. Ships might change flagship, or not, depending if they are being given fishing permits and quotas good enough to keep them operating and it is expected that some many ships will change their operating zones which could mean increasing fishing pressure and competition in zones where there is already an operating fleet. There will also be problems with the landing of captures. What about the channels? Conflicts can be expected there too.

      2. Ignacio

        But regarding the problem you mention with mackerel, those ships that would go closer to the breeding zones would face the problem of capturing too many fishes below the minimum size that cannot be marketed under EU rules, but must be landed and counted against the ship quotas, and risk loosing the permits, so I think this wouldn’t be the best ‘solution’ for a shipper.

  3. PlutoniumKun

    Thank you for this excellent overview Yves, as usual its better than anything you will find in the English language mainstream press.

    Some random comments: Its reported today by Tony Connelly that a huge sticking point in negotiations is meat. This is a bigger issue than it looks as a huge amount of meat products regularly travel back and forth over the Irish border and between Britain and NI for killing, processing and packaging. Even British meat consumed in Britain may have some stage crossed one of those borders. This is a very high profile issue, so the fact that its not been dealt with many months ago indicates that there are numerous land mines hiding under even a deal with more obscure issues and that any deal is ultra minimalist. This is inevitable when you have ‘closed door’ trade negotiations, as there is insufficient consultation with outside stakeholders. Going from comments I’ve seen on Brexit comment boards (I rarely have the stomach or time to read these, but its interesting to see sometimes what the latest bizarre misconception is grabbing their attention), I suspect this has arisen from a half hearted attempt to put pressure on Ireland, as many UK meat processors are owned and operated by Irish companies. But at this stage, its too late to have any political impact. Its just an enormous headache which will impact the UK more than Ireland (Ireland can always export directly to Europe).

    On the law issue, specifically of UK solicitors getting access to Ireland, there are two new office buildings ruction undergoing const at full pelt, even with overtime, just 100 metres away from the Bar Council of Ireland, and half a mile at most from the two main law colleges. I strongly suspect that many a UK law company has already pre-booked some office space. Incidentally, UK barristers seeking to gain Irish approval to practice have hit a big obstacle. They have to demonstrate fluency in Irish gaelic. This has raised a few chuckles in Irish legal circles.

    I don’t doubt that Cummings was an Ultra, and would push for a no-deal, but everything I’ve read and heard about the soap opera in No.10 indicates that it has no real impact, those people are too busy fighting for power to be bothered about minor issues like the economy going over a cliff. Incidentally Yves, I think that your autocorrect changed ‘fiancé’ to ‘finance’.

    On the final point about a post-crash deal. I think this would be even worse for the UK than they think. There is an ongoing dynamic within European countries between national governments who for the most part genuinely want the smoothest transition possible, and at a lower level a multiplicity of European national and regional agencies and local governments who have only one objective – grabbing as many jobs and business as they can for their town or city or region. Its generally assumed in the UK that the EU will not want to risk disruption to the world of finance or supply chains even in a no-deal scenario – but after January I believe we will see a different dynamic whereby a ragbag of local business agencies, mayors, regional governors, etc., will be agitating to attract services businesses and factories from the UK – everything from Airbus wing manufacture to small scale food businesses to the aforementioned law offices. It will be the Europeans who will see themselves as the beneficiaries of disruption, not City of London hedgies.

    1. Yves Smith Post author

      Thanks for calling out the typo (fixed!) and raising the meat issue. I haven’t been following Richard North as religiously as I once did, particularly since he switched over to Covid coverage for a while. He was big on how damaging Brexit would be to the live animal trade with the EU, but he hasn’t been as strong re issues that involve the Ireland land border.

      1. Fazal Majid

        Fiancée, Ms Symonds is definitely of the female persuasion…

        Regarding level playing field and arbitration, now that government has signaled it does not feel bound by international laws or treaties, even Boris meekly capitulating to ECJ jurisdiction would not be sufficient, the only effective remedy to British bad faith would be a swift (30 days or less) administrative, not judicial mechanism to retaliate against noncompliance by immediate suspension of the free-trade provisions.

      2. PlutoniumKun

        There is a further article on it here.

        Speaking on RTÉ’s Morning Ireland, Minister McConalogue said that the issue emerged in recent weeks and is “concerning” and “a reflection of the many issues Brexit is raising”.

        Its really disturbing that such an obvious and high profile issue has only emerged ‘in recent weeks’. It looks like the negotiators have been in their own little zoom bubble and may have missed more than one crucial issue.

        1. vlade

          I’m not in the least suprised. It comes back to the issue that in the normal circumstances, you’re trying to broaden your interactions. So you know what you can’t do but would like to do – the problems you have to solve are well defined, and if something is left out, your delta over normal situation is no worse than the normal situation.

          Now, you’re _restricting_ your interactions. You may know what you’re restricting them to, but no-one knows what are all the interactions. Meaning your problems are largely unknown, and the delta for any missed issues is a situation worse than the current one.

          TBH, I’m not sure whether even the EU negotiators truly understand this. But I’d be willing to bet that the UK govt doesn’t.

          1. PlutoniumKun

            Yup. I must admit that I’d assumed that the sherpas would have covered all the bases, but its entirely possible I think that there could be uncovered issues which will blow up horribly early next year if a deal is quickly signed off. As you say, its far more likely that its the UK that would have made this error, but given the disruption this year its entirely credible that EU negotiators would have taken their eyes off the ball.

            1. vlade

              I honestly believe that the best they could do is to cover all major bases (that matter to them). It’s always much, much harder to describe a complete system than to describe a system increment.

              And that’s the problem Brexit is running into. In normal negotiation, you describe the increment – you actually don’t need to know the full current state, because as I wrote, the worst case is status quo.

              In Brexit, if you describe you need to know both the current state and the delta (or future state and the delta, it’s equivalent), because if you omitt something, you end up in a worse state than status quo – and the least you’d know is the impact of the omission.

              In a friendly situation, you’d do this piece-wise, saying “ok, we want to deal with fisheries”. And deal with fisheries, while holding the rest static. Then you move on the next issue etc. etc. So you can focus on the known important issues first. But this is not compatible with a “clean cut” that most Brexiters (and public tired of Brexit) want. They possibly could, if it was explained to them, but given the ideolougues in charge, it never was needed, and arguably, people like Cummings IMO wanted it to break down, as that gives the best go at a “proper” revolution.

        2. Tom Bradford

          For want of a nail the shoe was lost.
          For want of a shoe the horse was lost.
          For want of a horse the rider was lost.
          For want of a rider the message was lost.
          For want of a message the battle was lost.
          For want of a battle the kingdom was lost.
          And all for the want of a horseshoe nail.

    2. Clive

      The Northern Ireland Protocol stands little chance of being implementable in a No Deal.

      The NI Executive has requested in a fairly strong statement pragmatism from the Commission (and it is on some readings, as the Executive argued, entitled to receive this) but the Commission reiterated its current hardline legalistic stance.

      But will that stance survive a collision with No Deal reality while also permitting a workable Protocol ?

      The meat processing industry is one example of pain points, but it is far from the only one. The notorious preprepared sandwiches marlarkey (where each consignment would, in a strict interpretation, require separate food standards certifications for each foodstuff which the sandwiches contained. This is, unfortunately, a supply chain and logistics impossibility given the profit margins on these products.

      So what about the food standards certifications which are a Commission demand? Well, things that can’t be done, won’t be done.

      So no sandwiches for Northern Ireland then? Hmm. It is here that games of 11 dimensional chess have a nasty encounter with the voters. Saying who voters will blame for what, in what circumstances is a difficult thing to predict. As is how long the narrow legalistic readings and their associated 11 dimensional chess game strategies behind them last, too.

      1. vlade

        Republicans will blame London and nationalists, nationalist will blame Dublin/EU and republicans, nothing to see here – I doubt it will shift enough voters either way, at this stage I’d say they are way past any significant moves (ex demographic ones, but those take time).

        In practical terms, the only question there is whether a support for re-integration referendum will get to the point whether the pressure on No10 to call it will be too much (which may well be, if pushed by Biden admin too), and what will be the result.

        1. Clive

          I’d have said that too, but Sinn Féin putting their name to the Executive’s nastygram to the Commission suggests it might not be quite as knee-jerk as that.

          We tend, because we’re politics nerds, to look at events and possibilities as if they exist in a political Petri dish. Most people aren’t like we are. This isn’t so much succumbing to Group Think, more an inevitable inability to see the world as apolitical people might do. Of course, Northern Ireland is a highly politicised community. But some things are just bread and butter.

          Like sandwiches, for example. Your sandwich was there, on the shelf, for you to buy, yesterday. Today, it’s gone. Or someone is threatening that it won’t be there tomorrow.

          As you say, for the old green/orange fault line, Republicans may tend to blame London and Unionists may tend to blame, variously, Dublin or Brussels. That blame game will start and, as with most things in Northern Ireland, rumble on, usually unresolved — or maybe stagger to some mutually disliked mushy compromise. That is the political process.

          But the political process doesn’t put the sandwich on the shelf. You, wanting a sandwich and seeing no good reason why you can’t have one, save for a political, technocratic or legalistic battle of which you know little and care less about, just want to buy it.

          Strange and perhaps incomprehensible as it may seem to us, many people just want their sandwich. They don’t care, in that moment, whether the U.K. is right that the Northern Ireland Protocol is supposed the guarantee unfettered East-West trade or that the Commission has a treaty obligation to enforce EU Single Market rules (or whatever the rights and wrongs might turn out to be). So if the U.K. government says it will bring in the sandwiches (or sausages or pork pies or non ErP-compliant fridge freezers or whatever) that’s what quite a high percentage of the population will say should happen.

          Michelle O’Neill is smart enough to recognise this political reality, I suspect. Hence why she signed that letter.

          1. vlade

            I do not disagree that if there are no sandwiches in NI, the UK govt would bring them in (well, maybe I do with this govt, but let’s concede it as a genral point).

            That will result in NI-Ireland border hardening though (because the EU cannot leave it w/o response), and that, especially in the NI, will turn into political thing extremely quickly. So your sand thing will became political very very quickly, whether they guy (or gal) w/o the sandich is green, orange or whatever.

            1. John Jones

              It is oft quoted that Martin Selmayer said that NI was the price of Brexit – he may/may not be wrong on that.

              It was unfortunate that the EU weaponised the border as they did – it was bound to have downstream implications .

              The other issue is more simple to grasp – a bad treaty ( even if ratified ) doesn’t make it a good or workable treaty.

              It was a big ask to agree the WA mark 2) when it was put forward – that it now looks to be hard to implement is the fault of both parties.

              As Samual Brittan said of the euro ” it’s hard to sustain the unsustainable” – have a horrible feeling that WA mark 2 will have a similar fate.

        2. PlutoniumKun

          Unionists have been relatively quiet lately – essentially there is a widespread understanding that they horribly overplayed their hand when in the last government and are now paying the price. The noises from more hard line loyalists seem to me to prepare for hard times (in other words, dig your heels in and stockpile weapons). More ‘moderate’ Unionists are a little lost, and are desperately seeking some sort of pragmatic middle ground – but they are an electoral minority.

          Sinn Fein has pretty much destroyed all opposition on the nationalist side, but they are as confused as anyone as to what steps to take. They will avoid doing anything to upset what remains of the GFA, but they are also wary of being outflanked by the small fringe Republican groups. I think they will hold their ground come what may and blame all disruption on perfidious Albion while looking to Biden as their saviour. They don’t want a quick border poll as they are aware that the demographics are not yet in their favour – they are determined not to make the mistake of going for one too early. Their grand strategy has been to get a united Ireland by border poll at a time when they are electorally strong at each side of the border and can legitimately claim to be the only political party with support on each side. Brexit horribly complicates this for them.

          My guess is that they would use no deal (or a confused and chaotic deal) as a catalyst for drumming up sympathy outside NI, including in the US. A Biden presidency will be invested to some degree in keeping the GFA intact as a political entity, even if it is no longer working economically. It makes sense for him politically as he will want foreign policy distractions. SF and the Irish government will be united in trying to drag him into the deal, as they know that with Brussels and Washington pushing, the UK will be in a very weak position to do anything but make polite noises.

          Loyalists may well turn violent, but they were spectacularly incompetent during the ‘Troubles’, but that can’t always be relied upon. Sinn Fein will do everything to keep the renegades quiet within Ireland. But don’t assume that they won’t calculate the value of a ‘deniable’ device under a Tory politicians car. There is nothing like the prospect of high explosives to focus politicians minds, as the Brighton bomb demonstrated. Whatever the truth, it is part of Republican mythology that those 50lbs or so of Semtex brought the Tories to the negotiating table.

    3. Redlife2017

      A week ago there was a business update to senior management and the executive committee of the large London-based asset manager I work at. The firm set-up an Irish entity to be able to have access to EU clients. So, they are not completely stupid.

      This is what is a direct quote from the slide called “General notes on 2021” which discusses Brexit:

      – We expect the relationship with Europe to evolve.
      – We expect the UK to become more competitive in Financial services. Political agenda to create a financial services hub in the north east.

      There is no understanding of what is going to happen. As PK notes above, the Europeans are salivating at taking stuff away from London and the UK. I mean, what can they possibly mean by “more competitive” in the slide above? This is total Tory kool-aid…And I work with these people (ugh).

      1. PlutoniumKun

        Thanks, this confirms for me my suspicion that while some elements of the business community ‘gets it’, many have genuinely fallen for the line that its an opportunity to some degree or other. Its the only explanation I can think of for why everyone from the City of London to small local suppliers aren’t screaming from the rooftops the necessity of a deal.

        One of the first predictions I made after the vote would be that European mercantilist instincts would kick in and they’d try to take full advantage. I was wrong – the overall political instinct to smooth everything over and protect stability proved far stronger, and I’ve been constantly surprised at how much the EU and major capitals have been willing to do to make life easier for London.

        But politics is more than just what happens in a Chancellory or Parliament – the bread and butter of every government is bringing in jobs and wealth, and once the UK fully exits I am sure this will become the primary dynamic over much of Europe. The notion that the EU would just happily co-operate with the UK on financial services when there are jobs to be won for Frankfurt or Bordeaux or Amsterdam is just fanciful. The Swiss are already finding out what happens if they take the EU for granted, as they have for years.

    4. vlade

      Re your last point, that was somehign that the UK never seemed to understand. Especially now, most of the EU countries will be happy to support their own companies to bring in any supply chains they can. Yes, it takes time and is not easy. But they will still do it (or at least try very hard).

    5. rtah100

      It seems very unlikely there is a great flood of UK criminal or commercial barristers looking for rights of audience in Ireland.
      – Governing law and jurisdiction clauses between entities in third countries rarely specify Ireland but they do often specify English law in the High Court.
      – Unless there is a requirement I am not aware of (not the first time!), I don’t believe there are any rules in, for example, EU financial services regulations about the jurisdiction under which a contract (rather than a counter-party) must be.
      – European Patent Office cases are regulated under their own treaties

      Are rights of audience at the ECJ or competition hearings restricted to EU lawyers in some way? That’s the only reason I can see that would require certain barristers, but not many at that, to obtain Irish practising certificates.

      1. rtah100

        Ps there are worse jurisdictional hurdles to jump. My cousin passed his Jersey avocat exams, complete with written and oral pleadings in Norman French, which has only been 800 years in the dying.

      2. PlutoniumKun

        Its not about rights of audience in Ireland, its about competition law, which impacts on a very wide range of commercial law. The key sticking point for many large law firms is professional indemnity insurance. Quite simply, without a base in the EU they won’t get it for offering any legal advice which relates to EU Law.

  4. Mikel

    “… the latest stage and the latest consequence of years of incompetence, if not worse. For, of course, the incompetence is inextricably linked to the dishonesty of the claims and promises made. To give just one example – but a major one – the years of lying about how the UK could leave the single market and customs union but still have ‘frictionless trade’ or something very close to it explains both why no realistic plan for the future was developed and why preparations for border controls were not begun until far too late….’

    I don’t know if incompetence would be the exact source of the problem. Seeing the list of neglected plans and preparation that followed, I don’t really think it was lack of ability or skill.
    Looking at the depths of the prep that would need to be done – it would have been like mobilizing for war. And that puts people – the elected officals and the country at large – in a different psychological state than heated rhetoric.
    I think that was being avoided, but it was a denial of the reality they could be in with the positions being taken on the issues.

    1. rtah100

      Very much agreed. Nobody wanted to undertake any proper contingency measures because of a mixture of normalcy bias in the officials, ideology (preparing to fail) in the politicians and the natural organisation man’s belief that it is better to fail conventionally (Hi, Dido!) than succeed unconventionally.

      We should do more to celebrate the public figures in history who have prepared for the worst. We can start with Joseph interpreting Pharaoah’s dreams of famine but my modern favourite is John Cockroft, who insisted against considerable organisational opposition that the Windscale air-cooled nuclear reactors should have tall, tall chimneys for the exhaust air, with a bulbous filter at the end. These were mocked as “Cockcroft’s folly”, seen against the surrounding Lake District countryside, but saved thousands from serious radiological harm when the graphite reactor pile caught fire and distributed a (much attentuated but still nasty) plume of radioactive iodine and caesium around the countryside.

  5. David

    Thanks Yves and others. I don’t have a lot to add, but I’d pick up on one of Chris Grey’s points about incompetence.
    What we’re seeing is the consequence of, roughly, thirty years of increasing focus on presentation at the expense of substance, such that all that really matters is how an issue plays domestically, in the political wold and in the media. This has produced a system that is incapable of tackling substantive problems, because its political leaders no longer regard substantive problems as important. I’m not sure if it’s post-modernism or just dislocation from reality, but nothing outside the UK, and especially the UK politico-media system, has any objective existence any more. Until, of course, it does, and the coincidence of Brexit and the virus has made this brutally clear. What we are now seeing is the melt-down of the British political system that some of us have been anticipating for the last couple of years.

    As Grey says, the treatment of the problem since the referendum is a shambles, but in a way it has its own weird logic, if you assume that the outside world exists, solipsistically, only as we perceive it. A problem is “resolved” if a course of action satisfies the majority of the Tory Party. A problem with the EU is “resolved” if the EU can be blamed for the failure of attempts to resolve it. And so on. But the system, as TS Eliot might have said, cannot bear much reality. And that’s coming down the pipe now. To be fair, this dislocation from reality is not confined to the UK – it’s typical of many European political systems as well – but I think it’s much more advanced in London.

    It’s worth adding that the way in which I think this will come out is by playing with words. In practice, we’ll move into a new stage in a few weeks, where the same problems will be discussed, but under a new heading. The “transition period” will technically be over (with all sorts of horrendous practical implications, of course) but talks will have to go on, because there are objective issues that need to be resolved, not just from the UK perspective, but from that of many member nations as well. I foresee some quick linguistic footwork to enable the pitiful list of things that can be agreed before the end of the year as an achievement, before we move into, perhaps “post-transitional talks” or something like that. When you can’t change the underlying reality, you have little choice but to change the way you describe it, and hope for the best.

    1. PlutoniumKun

      On your last point – I think that was the initial instinct of the EU negotiators, but there were a lot of contradictory noises coming last week, the upshot seems to be that for now at least, the EU are taking a harder line. It maybe that for whatever political or legal reasons, they don’t see that type of linguistic/legalistic footwork as viable.

      I think it is possible that the EU may decide that a no deal (preferably one precipitated by London) puts them in a much stronger position when negotiations restart, as they must inevitably do.

      Another dynamic is that Sunak and Gove and the others who see themselves as taking over in Spring may be calculating that a drawn out fudge is bad news for them, as they will end up with a ticking bomb on their desk. Sunak has been making ‘no deal is no big deal’ noises lately – his calculation may be that it would be better to have a no-deal which he can then blame on Johnson, and quietly later restart talks which can go on out of the public view to repair the damage, without the Ultras breathing down his neck. As a political calculation, it makes sense, and thats all they seem capable of calculating right now.

      1. David

        I don’t necessarily disagree, I just think that we’re in a situation where most of these words have lost their original meanings. There’s a practical limit to what can be agreed before the end of the year, and I’d venture to suggest that we are now so late in the game that the sum total of what could realistically be agreed wouldn’t make much of a dent in the mass of problems to be resolved. It’s true of course that one option is to agree nothing at all before the end of the year, which would be a big difference politically, even if it made much less difference practically. That’s a very risky endeavour, but more importantly all it does is kick the problems into 2021. Given the amount of disruption that would cause, though, I wonder if it’s realistic to imagine that negotiations could restart quietly and unobtrusively. Certainly the EU would have no incentive to behave that way.

        1. vlade

          Indeed, any deal now will be functionaly not massively different from no-deal, at least in terms of NTBs.

        2. PlutoniumKun

          Going by the mood music this morning, this does seem to be the strategy. Some UK papers over the weekend were anticipating that Johnson would sign an agreement yesterday. But yesterday there was total silence. On twitter today, Tony Connolly is saying that there are still three very fundamental areas still to be agreed. But negotiations are ongoing.

          The only explanation I can think for the failure of the EU to talk about deadlines having passed are that they want the UK to be the one to walk out, or they are resigned to the sort of rolling transitional deals and endless semantic fudging you describe. In some ways, I think this could potentially be worse than a no-deal, as it could cause even more confusion and could lull many small companies into thinking they don’t have to fundamentally change anything.

          What I don’t know is whether this will be considered politically acceptable in the UK. Johnson may think he can fudge things indefinitely, but at some stage the Brexiters will be demanding an absolute ‘stop’ to the negotiations.

    2. Anonymous 2

      I too would like to thank Yves and have only a little to add to what others have said.

      PK raised the question of the impact on the UK’s reputation. One important likely future development which will have a major effect is if, as I expect, Scotland votes to leave the Union. It will be very hard to present the UK as well-run in the circumstances. In addition, the likely future direction of English trade and industrial policy will have an effect. I expect there to be an increasing reliance on facilitating big-ticket white collar crime by expanding the London laundromat and other assistance to fraudsters, embezzlers, dodgy politicians , tax evaders and other crooks. In such circumstances England will of course be seen increasingly as a parasite on the world economy though I would not hold my breath waiting for some effective action to be taken.

      Another important issue is the likely policy of the Biden administration. Will they seek to lean on London to try to bring Johnson and Co to their senses now or wait to see how things play out?

      Like many I am uncertain what happens next but expect that as always so far Conservative Party internal politics will determine what happens. When faced with nothing but bad options (and that is what the UK faces IMO), people tend to gamble. Johnson is nothing if not a gambler so maybe he will go for no-deal thinking that the party will back him and if it all goes wrong engage reverse gear and seek an agreement next year.

      IMO all this is the result of 40 years of bad government in the UK. As it happens, it is about 40 years since Murdoch tightened his grip on British politics by taking over Times newspapers to add to his ownership of the Sun and the News of the World. To my mind this is not a coincidence.

      1. PlutoniumKun

        The late, great Dennis Potter of course named his cancer after Rupert Murdoch. How prescient he was.

        As for Scotland, I think all best are off until the Scottish elections in Spring. If things are bad then and the SNP have a clean sweep, then one can only guess what will happen. I can’t see the current crew of Tories managing to do anything that won’t repel Scots even more. Even threats of the economic hit that would be inevitable with an independent Scotland will not look so bad if the UK economy seems to be a sinking ship.

  6. disillusionized

    In regards to security, while it is a subject shrouded in both mystery, technical and legal detail, and low media interest – its here where governance issues are rife.
    Many of the databases and legal instruments are explicitly subject to the ECJ, and in addition many memberstates have their own interests and in some cases constitutional considerations. This is probably one one of the areas that will blindside the uk and its non-constitution, because the eu is unlikely to want or be able to budge (even if in their own interest). The the reasons are ultimately spelled KGB and Stazi, and as far as the people who care a lot about these issues, they are liable to rank GCHQ up there too. Mind to that the uk is presently under investigation for their missuse of the schengen databases, so it’s not like there is trust to spare.

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