July 08, 2020
Maybe they are not negotiating after all?
Philippe Lamberts MEP shared an interesting snippet of information about the state of the Brexit negotiations. Don't take it for granted that we are in a final stretch. While it appears that negotiations are going on, this is pure illusion. The British are not negotiating, he said. This corroborates our take last week. Lamberts confirmed that these talks did not just end a day early. They actually broke down.
Lamberts was a member of the Brexit steering group in the European Parliament, which accompanied the first part of the Brexit negotiations. We think he may have first-hand knowledge of the state of the current negotiations. In an interview, he said the negotiations were only for show, to give the appearance that something is happening when it is not. And he said the UK government was not really interested in a deal.
As ever, we find it difficult to know what it is going on inside peoples' heads. But revealed preference tell us that Johnson is a late-deadline negotiator and a gambler, which is why it was essential for him to let the July extension deadline pass. We always took that pledge seriously. The ability to extend, ever-present in EU law, did not really work for the Tories before. We think that Theresa May would still be prime minister if she had negotiated a withdrawal agreement under a binding no-extension commitment.
The fact that this month's negotiations are stuck should therefore not be surprising in itself. We all know what the contours of a successful deal will be: no regulatory alignment, unilateral remedies as the ultimate dispute settlement mechanism; respect for the principle of a level-playing field but with no extra-territorial judicial reach; fish quotas; and some minimal extras, for example on the mutual recognition of qualifications; all with an initial time limit. These are all relatively complex issues because they will be impacted by future regulatory divergence. There is no way to pre-regulate this, other than by giving both sides unilateral remedies. We see this deal not as the end of the Brexit process but as the beginning, a framework deal full of holes to be filled later. The deal needs to be sufficiently robust. What the latest episode has told us is that it is delusional to think that a departing country and the EU could ever negotiate a solid future relationship at the first go.
We agree with Lamberts that the UK is not being serious. But we also think that the EU wasted five months with a proposal that was objectively unreasonable, like the ECJ power grab. The EU has systematically misjudged UK politics, and is only now slowly coming to terms with Brexit. Both sides have strong incentives to make a deal. But we believe that both sides really need to hear the ticking clock. They are not hearing it now, but we believe they will hear the ticks more clearly by September.