Brexit Briefing: Barney In Brussels

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1) The EU Negotiators Are Showing Just Why So Many People Voted Leave

The gloves are finally off. After a couple of ‘yeah everything’s going get’ press conferences from David Davis and Michel Barnier, the latest round of negotiations delivered a decidedly testier spectacle.

In the EU corner, Barnier was clear there had not been enough progress on the divorce bill for him to recommend talks begin on the post-Brexit trade deal.

“EU taxpayers should not pay at 27 for the obligations undertaken at 28. This would not be fair,” said Barnier as he highlighted spending commitments such as loans to Ukraine and projects in Africa and the Caribbean.

“These are not recognised by the UK as legal obligations,” said Barnier. “With such uncertainty, how can we build trust and start discussing a future relationship?”

He also said it was “simply impossible” for the UK to expect its product standards to be “recognised automatically in the EU” as he attacked the UK’s plan for engaging with the Single Market.

Davis tried to sound more upbeat, saying there had been “some concrete progress” in the latest talks, but as he went through the issues still to be settled it sounded like the two sides were just as far apart as they ever have been.

On the divorce bill, Davis said the UK has a “very different legal stance” to the EU – although the Government was willing to recognise its “moral obligations” when it comes to handing over cash.

After the flurry of policy and position papers produced by the Government over the summer, Davis clearly felt like the UK was being much more creative and inventive when it comes to tackling issues such as customs arrangements and the Irish border.

Indeed, he felt able to paint the EU out as the ones dragging their feet.

“Our discussions this week have exposed yet again that the UK’s approach is substantially more flexible and pragmatic than that of the EU, as it avoids unnecessary disruption for businesses and consumers.”

So where does that leave us? It all comes to who blinks first – well, next actually, seeing as the UK already gave ground on the structure of the talks back in June.

With the clock ticking to March 2019, both sides are playing a high risk game. And it is not painting the EU out in a particularly good light. Eurosceptics have been telling the UK for years that Brussels is inflexible, overly-bureaucratic and so obsessed with process and procedure they neglect what really matters. Watching Barnier in the press conference in Brussels all those criticisms were brought to life. There is supposed to be give and take in negotiations, but there is little sign of any give from the EU.

2) If We’re Just Going To Copy And Paste EU Trade Deals, Why Are We Brexiting?

Securing new trade deals is supposed to be Liam Fox’s job, but after the ‘Would you eat chlorinated chicken?’ headlines generated by his trip to the US, Theresa May has clearly decided to take over.

The PM travelled to Japan this week to talk about future trading relations between the countries. In September last year, the famously polite Japanese government came close to saying what it really thought about Brexit in a detailed memo on the vote.

“In light of the fact that a number of Japanese businesses, invited by the Government in some cases, have invested actively to the UK, which was seen to be a gateway to Europe, and have established value-chains across Europe, we strongly request that the UK will consider this fact seriously and respond in a responsible manner to minimise any harmful effects on these businesses.”

In other words: “We’ve pumped loads of money into your country because we thought it would get us tariff-free access to the Single Market, and now you’re taking that away. Get it sorted or we’ll up sticks and leave.”

I wrote a more detailed piece here on the importance of Japanese direct investment to the UK, but the topline is: it’s very important.

But in further ‘What even is Brexit’ news, it was confirmed today UK and Japan would seek to strike a trade deal practically identical to the one agreed between the Asian country and the EU in July.

Seriously. The UK is going through the Brexit divorce talks and negotiations and upheaval and everything else just to copy the trade deals the EU is already agreeing.

Taking back control – of the photocopier.

3) By The Power Of Greyskull, Labour Have An Actual Brexit Position!

In the most surprising news of the week, Labour has an actual, genuine, coherent position on Brexit.

After weeks of talks between key Shadow Cabinet members, Labour is now calling for the UK to stay in the Single Market during an interim period after March 2019.

That puts the party at odds with the Government, meaning some serious Parliamentary battles can begin.

One area where Labour is in agreement with the Tories is on the need to stay in a customs union with the EU – not the customs union.

Such a deal could allow the UK to negotiate trade deals with other countries, although not enter into them, unlike the current arrangement (makes you wonder what Theresa May’s talks in Japan are classed as…).

The need for a coherent Labour position came to a head after the trade unions got spooked by Shadow International Trade Secretary Barry Gardiner saying in July that staying in the customs union would be a “disaster”.

A source close to the shadow cabinet told me trying to come up with a position which satisfied everyone’s concerns was like playing whack-a-mole at a fairground. “As soon as you’ve knocked one issue down another one pops up,” they said.

4) It’s Not Project Fear To Worry Shelves Could Be Empty After Brexit

I’ve used this briefing to bang on about the future customs system the UK needs after Brexit a few times, because I believe it’s a genuinely underreported but massive problem facing the UK.

Turns out, the British Retail Consortium agrees with me.

In a report published on Thursday, the association warned that if the right customs system is not put in place, it will “affect availability on the shelves, increase waste and push prices up.”

With three quarters of our food imports coming from the EU, the BRC calls on the Government to replicate the current food standards the EU operates in order to allow smooth transition through customs and “avoid unnecessary interruption to trade”.

The BRC said “Getting this right is essential to ensuring UK consumers are able to buy the products they want after Brexit. With annual customs declarations in the UK estimated to rise from 55 million to 255 million from March 2019, a no deal Brexit could mean new delays at ports of up to two to three days.”