The UK-EU talks are entering a new phase
Exclusive: Farage scents betrayal, but the Chairman of the ERG remains optimistic that a deal is coming
Michael Gove emerged from Friday morning’s meeting of the Withdrawal Agreement Joint Committee to announce, “we have informed the EU today that we will not extend the Transition Period. The moment for extension has now passed.”
Nobody taking government statements at face value these last four months could have been surprised. But what should be made of the confirmation that – initially at least – Great Britain (without, of course, the still Single Market-compliant Northern Ireland) will postpone full customs compliance on a wide range of imports arriving into the country? The asymmetry is clear given the refusal of the EU to return the favour.
At face value this looks like Britain throwing away a high value negotiating card. Making life more difficult for Europeans trying to export to the UK was supposedly part of the leverage intended to encourage Brussels to agree with the UK a Canada-style free trade agreement (FTA) that would remove the vast majority of customs duties. “The first betrayal. This is a very bad sign” tweeted Nigel Farage.
The Cabinet Office did its best on Friday to assure journalists otherwise. Duties on imported goods are not going to be waved. It is merely that British businesses will not have to submit the necessary paperwork and pay the appropriate tariffs until six months have passed since the goods crossed into Britain. To this, there are some exceptions – for instance there will not be the grace period for “controlled” items like chemicals, tobacco and alcohol for which a licence is required and pre-notification will be required when importing live animals. From April onwards, all products of animal origin (eg. eggs and honey) will also require pre-notification.
Why this staggered introduction of custom compliance? In the government’s version, giving British firms the option to delay submitting the forms and paying the tariffs is not about surrendering the nation’s leverage with Brussels but about giving British businesses a bit of leeway because of the disruptions Covid-19 has inflicted upon them (and to give time to expand UK customs infrastructure at points-of-entry and for private agencies advising firms on compliance to train and scale-up their operations). Foreign imports coming into Britain will still face duties. As a temporary measure, this exceptionalism on selectively delayed form filing would not breach WTO rules on uniformity of treatment.
These announcements come ahead of Monday’s (virtual) “high level conference” between Boris Johnson and the Brussels top brass of Ursula von der Leyen, Charles Michel and David Sassoli, respectively the presidents of the European Commission, Council and Parliament. Coming at the mid-point in the transition year and after the absence of substantive progress achieved in the Frost-Barnier talks, the hope is that Monday’s video conference provides an opportunity to concentrate strategic minds and reset the dial.
it is very important that the Northern Ireland Protocol is effectively negotiated away as part of the free trade agreement
Despite the stony ground thus far tread by the Frost-Barnier negotiations, Mark Francois, the Chairman of the European Research Group (ERG) of Conservative MPs, believes there are three reasons for optimism that a FTA can be concluded before the transition period expires on 31 December.
Talking to The Critic, Francois maintained that Brussels was apprehensive about the advantages that a UK with its own regulatory control would enjoy if leaving on “Australian terms” (those set out by the Withdrawal Agreement) in January. Secondly, he points to the EU’s track record in finding a solution to problems they previously declared to be unsolvable when confronted by tough negotiation and limited time. “They swore blind that they would never reopen the Withdrawal Agreement” that Theresa May struck, “and if they did it would be inconceivable that they would abandon the backstop. Then they did both in three months. So, if we managed to renegotiate the Withdrawal Agreement – a 585 page document – then I believe we can come up with a comprehensive free trade agreement based on a modified Canada deal that is already in existence.” Thirdly, added Francois, “the Prime Minister is a good negotiator.”
For its part, the UK should prefer to reach a FTA rather than trade under the Withdrawal Agreement’s terms as a means of securing amendment to the Northern Ireland Protocol which leaves the Province largely subject to EU regulations and requires checks between the British mainland and Northern Ireland in order to avoid Irish cross-border controls. “As chairman of the ERG,” Francois makes clear, “I and many of my colleagues believe that it is very important that the Northern Ireland Protocol is effectively negotiated away as part of the free trade agreement discussions. The agreement should supercede the Protocol which should no longer be necessary once the transition period is over.”
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