Roderick Crawford: We have interests in the rest of Europe, but must be free to run our own foreign policy

6 Jul

Roderick Crawford works on conflict resolution in countries such as Yemen, South Sudan and Iraq, and on Brexit-related matters. He is a former editor of Parliamentary Brief.

One could be forgiven a sense of déjà vu as we enter the second round of accelerated talks, this time in London. The high hopes of breakthrough at the start of last week’s talks were dashed as they broke up on Thursday last. The same sticking points remain: the legal structure of the agreement, level playing field commitments, including state aid, and of course fisheries. Specific details have not been released, so it is hard to comment on why the progress on getting agreement on underlying principles has failed to materialise.

Though working through the underlying principles of the agreement should help identify where the barriers to agreement lie, a look at the overarching principles of the negotiating positions of the two parties may throw better light on the lack of progress.

Last month, Der Spiegel ran an interview with the Anglophile former German Ambassador in London, Peter Wittig; he provided a revealing glimpse into the EU’s perspective on the negotiations. Asked whether, in effect, the EU should accept a hard Brexit and let the UK go, he says, no:

‘We should continue to endeavour to tie Britain as closely as possible to the European Union. Europe can only survive in the competition between the USA and China if it is strong and united. I always thought it was good that the Federal Government was the voice of pragmatic reason in all these difficult negotiation phases. I advise everyone not to think about the short-term effect, but to keep a strategic eye on where Europe should be in five, ten or 15 years.’

The quote is interesting because it is part of an intra-German conversation from a friend of the UK expressing pragmatic views on the big picture in which Brexit sits. While the UK has been caught up in its own arguments and political storms – and of course running ourselves down – we have lost sight of the impact of Brexit on the EU: it has been considerable.

The EU has lost its only global city, its only global finance centre, its most dynamic services economy, 12 per cent of its consumers – more when weighted for income – and its only universities ranked in the world’s top ten. It has lost a major pillar of good governance (the UK was a consistent upholder of the EU’s rules-based system) and a source of sound counsel.

As the EU looks to develop its common foreign policy and defence co-operation, it does so now from a far weaker base. The UK was one of two EU permanent members of the UN Security Council, one of two nuclear powers.

It had the only blue-water navy capable of working with the US; China has just achieved a two aircraft carrier capability – the UK will soon be there, too. It has a battle-tested professional army and air force. The UK alone had the capability of power projection across the world – albeit with limitations – and the will to do so. The Foreign Office, despite its shortcomings, is still world class and the UK’s influence is, arguably, stronger across the world than any single EU member state.

The EU is diminished, while the fault lines on which it sits become more unstable. To its east, Russia is reviving in confidence as its actions in Ukraine, Syria, and its challenges to the West demonstrate. Turkey has become a regional player, outside of the NATO fold, and looks to a future untied to the EU. The Middle East and North Africa are unstable, and a source of potential and probable mass migration to the EU driven by demographics, economic and political failures and climate change.

The UK looks out across the North Sea to Norway, Denmark and the Netherlands, and across the Channel to Belgium and France; to our west lie the USA and Canada. It is an envious position to be in, though not one deserving of complacency: we still want a secure and stable EU. We are committed to the peace and security of Europe through NATO; in these respects, our interests and obligation in NATO, we are tied in.

One of the problems in the current negotiations is that the EU has re-written history to build up its own role in keeping the peace of the last half century. One of its foundational myths is that it has been the EU that has kept the peace in Europe. It even claims responsibility for the Belfast Agreement.

But its claims to success are absent of evidence. It is the transatlantic partnership that has kept the peace in Europe; it was the Northern Irish, London and Dublin – with US support – who brought about the Belfast Agreement. The EU forgets its role in the break up of Yugoslavia, and the subsequent wars and civil wars ended only with US engagement. Its diplomatic bungle over Kosovo, when it resurrected the July 1914 ultimatum to Serbia, ended likewise – and at great cost in civilian lives. The EU has not kept the peace in Europe.

The EU’s ambitious partnership proposal is overly ambitious, based as it is on inflated ideas of its own story and present capability; the ideas of uniquely shared values and interests ignore that they are shared with the English-speaking world and beyond. When the myth is removed, and the reality of the EU’s position is seen — its risk levels, its lack of investment in NATO and its own level of defence preparedness, and its poor relations with its neighbours — it is hardly an attractive partner; more of a liability.

The EU, quite understandably, wants the UK as closely tied in as possible to its defence and foreign policy (and economy). The UK, quite understandably, does not. Present commitments through NATO provide sufficient security to the EU’s members and help balance much, though not all, of their security concerns. The UK will do more, through co-operation bilaterally with members and freely alongside the EU too.

The EU and UK can co-operate to secure shared interests, but ultimately, though the UK wants a stable and secure EU and stability and security for its member states, there are differences in interests. The UK must be free to run its own foreign policy, champion alliances that may take precedence over that with the EU and policies that the EU will oppose — even the freedom to support member state interests against those of the EU institutions. It cannot be tied-in to a punitive governance structure to prevent it exercising such choices.

The overarching principles of the EU and the UK as regards governance of the future relationship are in conflict — we can’t be tied-in and free simultaneously; papering over the differences would breed confusion and likely lead to fresh upsets in the future. The UK cannot afford to accept a single overarching governance structure or claims upon it in the field of the EU’s common foreign policy and defence.

Stephen Booth: While UK-EU talks gather momentum, Britain should continue to diversify its trading relationships.

25 Jun

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

There are signs that the UK-EU negotiations on the future relationship may be gathering some momentum.

Last week’s stock take meeting between the Prime Minister and Ursula von der Leyen and Charles Michel, the European Commission and European Council Presidents, respectively, confirmed there will be no UK request to extend the transition period beyond December 31 this year.

Both sides agreed to inject fresh impetus into the negotiating process, with talks set to intensify in July, August and September. This marks the make-or-break period to reach a trade agreement and new arrangements in other areas such as cooperation on policing and security.

In my previous column, I argued that the nature of the impasse – essentially whether the EU is prepared to cut a deal under which the UK would be free to leave Brussels’ regulatory orbit – means that it is incumbent upon the EU to move on the key sticking points.

These are fishing and the demand for ongoing UK alignment with EU law on the “level playing field”, particularly with regard to state aid. Important UK-EU differences remain but there are encouraging signs that this is now happening.

Following her meeting with Boris Johnson, von der Leyen signalled in a speech to the European Parliament that the EU was prepared to compromise without, of course, putting into question “our principles and the integrity of our Union”.

In her speech, von der Leyen made no mention of the EU’s initial demand to maintain EU boats’ access to UK waters on the basis of the status quo. “No one questions the UK’s sovereignty on its own waters,” she said. “We ask for predictability and guarantees for our fishermen and women, who have been sailing in those waters for decades.”

Neither did von der Leyen mention the demand for ongoing alignment with EU law on state aid or a role for the Court of Justice (ECJ) in overseeing the level playing field. “It should be a shared interest for the EU and the UK to never slide backwards, and always advance together towards higher standards,” she said.

Notably, she limited her remarks on the role of the ECJ to the part it should play “where it matters” in the area of police and judicial cooperation, rather than in the wider trade deal. If the UK wishes to retain access to EU crime and policing databases, these are underpinned by EU law and there is no escaping that the Court has the role of interpreting how law applies on the EU side.

Though, as the UK has pointed out, the EU has consistently agreed treaties with non-EU countries on policing and judicial matters without requiring the ECJ to settle disputes between the two parties. Equally, the Government has said it will not agree to the extraordinary EU demand for treaty provisions that would oblige the UK to maintain its existing implementation of the European Convention of Human Rights in domestic law.

Meanwhile, there is speculation that a compromise on the level playing field is being explored, under which Britain would assert the right to deviate from the EU rules that it will inherit after the transition period expires. And, in return, the EU would have the ability to apply tariffs on British exports if regulatory divergence amounts to unfair competition.

Neither side has formally adopted the idea yet, but there are reasons to suggest it might have legs. The UK would regain regulatory independence (and the consequences), while the EU would retain the ability to control access to its market in instances where it perceived the UK was lowering standards.

Brussels would need to give up on its desire to export its regulatory model to the UK indefinitely by treaty and the UK would need to compromise on its current position that any commitments on subsides, labour and environmental rights should be exempt from dispute resolution.

It is also an idea hiding in plain sight. The EU’s draft UK trade agreement text already proposes so-called “temporary remedies” and “interim measures” in the event of non-compliance with treaty commitments.

Such a model would not be without difficulties. The UK and EU would still need to agree on the relevant benchmark for identifying a breach of level playing field commitments. The UK could insist that evidence should be required to show that the effects of divergence are harmful to open and fair competition. The EU could continue to insist that the letter of EU law is the benchmark.

Equally, the prospect of the EU using tariffs or market restrictions as a political tool to secure leverage over the UK in other areas of the agreement cannot be discounted. This has been a feature of the EU-Swiss relationship in recent years. However, this needs to be weighed against the prospect of UK-EU trade facing the full panoply of tariffs on day one, if talks break down completely and trade reverts to World Trade Organisation terms.

Critics have noted that rather than providing for managed divergence, such a mechanism would create perpetual conflict. But, ultimately, while it would be nice to avoid it, the likely reality is that the UK and the EU will face disputes in the future, just as they have in the past. This is a feature, rather than a bug, of an independent UK. Some disputes may be easily resolvable through treaty dispute mechanisms, others will require political resolution.

One way for the UK to insure itself in the event of such disputes is to diversify its trading relationships outside of the EU. And negotiations with the UK’s priority non-EU markets, the US, Australia, New Zealand and Japan, are also intensifying over the coming months.

This week, Hiroshi Matsuura, Japan’s chief trade negotiator, called for a UK-Japan deal to be secured in just six weeks to be ready for ratification in the Japanese parliament. The challenge is to replace the existing EU-Japan agreement, which is due to expire at the end of the Brexit transition period, and Japan is insisting on a bespoke UK deal rather than a simple rollover of the existing EU agreement.

This may mean that the deal is less ambitious than the UK would like on agricultural tariffs but Japan and the UK could go further than the EU was prepared to in areas of mutual interest such as services and digital.

Unlike the Japanese deal, the talks with the US, Australia and New Zealand are about fresh deals and the talks are expected to run into next year. UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership is next on the agenda. India would be another potential candidate for the future.

With this week marking the fourth anniversary of the EU referendum, the contours of the UK’s international trade policy are beginning to take shape.