Daniel Hannan is a writer and columnist. He was a Conservative MEP from 1999 to 2020, and is now President of the Initiative for Free Trade.
Liam Fox was right. The former trade secretary has been much mocked for his remark that a trade deal with the EU would be “one of the easiest in human history”. Two and a half years later, that deal has still not been done and, as I write, there is a real prospect that the talks will break down. Yet Fox’s reasoning was sound. The most difficult aspects of trade negotiations, in general, are the opening of markets and the recognition of each other’s standards. In this instance, neither issue arises. Britain and the EU already have access to each other’s markets and reciprocal standards. Every barrier would be a costly move away from the status quo. For once, the inertia bias pulls towards free trade.
So what is the problem? Why wasn’t a deal struck long ago? Well – and this is where Foxie was correct – it wasn’t because of differences over trade. The purely commercial aspects of the deal seem to have been agreed easily enough. The hold-up, as everyone knows, is over other matters, notably fisheries and what Brussels negotiators (and most British media) misleadingly call the “level playing field”.
Neither of these disputes is primarily economic. We keep being told that the fishing industry accounts for a tiny proportion of Britain’s GDP, but the same is true for the EU. More to the point, the only way in which EU trawlers would be wholly excluded from British waters is if there were no deal. A deal would mean a phased reduction in access for Continental vessels, but not a reduction to zero. Whatever the EU’s reasons for holding out on fisheries, concern for French skippers is plainly not one of them.
Similarly, when it comes to the level playing field, Brussels doesn’t truly fear that Britain will abolish the minimum wage, scrap its environmental rules or subsidise its industries with a view to hostile dumping. British social and employment standards are higher than the EU’s requirements, its green targets more ambitious and its levels of state aid lower.
No, in both cases, the issue is emotional rather than economic. Eurocrats are still affronted by the 2016 referendum result. A few explicitly want Britain to suffer, even if that means that the 27 suffer, too. Even those who, rationally, accept that the best way to maximise their own prosperity is to have a free and open trading relationship with their biggest market sometimes struggle, psychologically, to follow that logic all the way through. Hence all their snide remarks and passive-aggressive tweets.
Britain’s other trade talks – first with Japan, Australia and New Zealand, then with the United States, then with India, Mercosur and the Gulf states – have been premised on the idea that both sides want to maximise their prosperity. We recently agreed a deal with Switzerland which covers pretty much the same ground as the EU talks. Foxite in its simplicity, it largely involved the two sides agreeing to leave things as they were. Indeed, the main complicating factor was EU pressure on Switzerland not to agree to too much.
Why, then, do Brussels negotiators talk of “granting” tariff-free access as if trade were an act of kindness? Because, in truth, they have not come to terms with Brexit. The EU thinks of itself as a modern empire (see speeches by José Manuel Barroso, Guy Verhofstadt et al) and its attitude to Britain is that of a metropolitan power toward a renegade province. They find it hard to let go. They want some remaining emblems of suzerainty.
We British should understand. We have, from time to time, found ourselves in the EU’s shoes. When the bulk of Ireland broke away, for example, London struggled to reconcile itself to the notion that it there was now a truly independent country next door. It imposed all sorts of conditions on the new state, including an oath of allegiance to the Crown, the continuing use of three Irish ports and a guarantee that the Anglo-Irish Treaty would have legal precedence over measures adopted by the Irish parliament.
In truth, these measures were more decorative than functional. Ireland after 1921 was, in its essentials, an independent country; but another generation passed before it formally assumed the final attributes of sovereignty without British opposition.
Fisheries and the level playing field are, so to speak, the EU’s treaty ports and oath of allegiance – symbols that Britain is a semi-protectorate rather than with an equal sovereign power. While Eurocrats would no doubt phrase that sentence differently, the truth is that they see Britain as a rule-taking dependent, like Macedonia or Ukraine, rather than as a wholly independent nation.
The funny thing is that, when Theresa May offered them such a relationship at the 2018 Salzburg summit, they threw it back in her face. Perhaps, as reports suggested at the time, they were simply put off by her manner. Perhaps they were not prepared, on principle, to agree to anything proposed by the renegade province. Either way, they must now wish they had grabbed that deal.