New research paper by Futurus – The negotiations will fail

The title of this latest publication from Futurus may appear provocative but the prospect of concluding a jointly agreed leaving process and a future relationship so it can come into effect, possibly with a transition period, by March 2019 seems very remote.

There have been faults on both sides and the UK government’s failure to set out what exactly it wants the outcome to be has been a particular problem.

The UK government need not have agreed to the EU’s proposed sequence of events – the settlement of the Irish border issue and the exit fee – before discussing trading arrangements. Under Article 50, it need not have done so.

A mutually-agreed pause in the negotiations looks likely or else failure looks highly probable.

The full paper can be downloaded here. PLEASE NOTE: The paper has been revised since this article  was first published.

Who will blink first?

Our attention has been drawn to an interesting article which appeared on the Conservative Home website. The author, James Arnell, claims that we in the UK have a different mindset when it comes to negotiations. “In the UK”, he claims, “parties generally start from a position which is more or less reasonable on each side and move together to a deal relatively quickly, seeking to avoid unnecessary escalation up the chain of command.”

The Continental approach is very different:- “Negotiations generally start with almost ridiculously extreme positions on each side….It is not at all unusual for these steps….to be accompanied by walkouts, requiring bosses to get things ‘back on track’. Ultimately, this continental form of negotiation culminates in a relatively rapid final phase of negotiations between the ‘head honchos’, in which, after months or years of painful posturing on both sides, points are traded embarrassingly quickly and a deal is sealed.”

Mr Arnell says that we should really start worrying if the negotiations are going smoothly at this stage as it means that the UK side would have been giving too much away.

The author works for Charterhouse, a private equity firm.  His biographical page on that firm’s website states that he is a barrister who speaks French and German fluently. All things considered, this article on ConHome sounds like it has been written by someone with first-hand experience of the Continental mindset with which David Davis and his team are having to deal during the Brexit negotiations. Maybe this is why not a lot is being given away by the UK government. While such tactics may ultimately turn out to be the best way of getting a favourable deal with the EU, as we have pointed out the lack of the details of any Brexit masterplan is causing concern for a number of business figures who are keen to know in far more detail what the government’s exit plans actually are.

A little extra piece of detail did emerge yesterday morning. According to Open Europe, Theresa May was adamant that even any transitional deal would not involve membership of the Single Market.  “We said we would no longer be members of the single market because we will no longer be members of the European Union.,” she said. Fair enough, but if there is another plan, not only organisations such as the Campaign for an Independent Britain but more importantly, some big names in the business world are straining at the leash for some reassurance.

Some confirmation of Mr Arnell’s analysis of the Continental mindset has surfaced in the shape of a  reference document of the Workshop on “Common Fisheries Policy and BREXIT” held on 21th June 2017, by the European Parliament’s Committee on Fisheries.  Concern has already been voiced about our denunciation of the 1964 London Fisheries Convention, an agreement which pre-dated our joining the EU allowing limited access to vessels from other Western European nations to certain areas of the waters between 6 and 12 nautical miles from our coastline.

As the wording of the original document was vessel-specific and no boats permitted to access our waters in 1964 are likely still to be active, denouncing this Convention could turn out to have been little more than a precautionary measure. The message it conveyed, however, was that the UK is serious about regaining control of all of our waters right up to the 200 nautical mile/median point limit and it was not well received. The response of Geert Bourgeois, the Flemish Prime Minister, was to wave around an ancient charter signed by Charles II in 1666 allowing fifty herring boats from Bruges “eternal rights” to fish in UK waters.  A bit of research showed this action to be nothing more than sabre-rattling. Even nearby Zeebrugge, a far more important fishing port than Bruges these days, could only muster 43 fishing boats in total four years ago.

So it comes as no surprise that the European Parliament is keen to see EU boats continue to plunder our waters. Although trade and fisheries will be handled separately, the report says, “The fact that these issues will be negotiated in separate legal frameworks should not lead to the fragmentation of fisheries issues, which should be addressed in their entirety and together, so as to ensure that the free movement of fishery products is linked to free access to waters and resources and vice versa”. As John Ashworth of Fishing for Leave commented, “The EU will want to tie the whole package together using blackmail on trade” –  In other words,  let us fish in your waters more or less as before or we’ll make it hard for you to sell fisheries products in the EU.

John has studied the issue of historic rights and has concluded that we can take back control of our waters without being open to a legal challenge over this issue. Nonetheless, the European Parliament document says “These historical fishing rights should be taken into account in the negotiations to facilitate preferential access by Member State fleets.” I shan’t repeat his rather forthright comments about this for fear of offending anyone’s sensitivity, but suffice it to say that he is distinctly unimpressed with the reasoning of the European Parliament! As an aside, it is worth pointing out that the European Parliament has a relatively minor role to play in the Brexit process, but its attitude is unlikely to be different from that of other EU institutions.

The bottom line is that if there is no agreement on fishing, the EU will be the clear loser. We would have full control of our waters right up to the 200 nautical mile/median point on Brexit day and no EU vessel would be able to fish anywhere within it. The loss of access to EU waters by our fishermen would be more than compensated by having exclusive access to our own.

This, or course, assumes that Michael Gove does not blink first and give way. The denunciation of the 1964 Convention was a move in the right direction, but the howls of protest from across the Channel are a warning to him that he will need to hold his nerve.

Indeed, it may not just be Mr Gove who needs to take James Arnell’s advice on board. Yanis Varoufakis, the former Greek Finance Minister has written a book called Adults in the Room based on his personal experience of how awkward he found EU officials to be.  On the other hand, while we have the upper hand on fisheries, we certainly don’t when it comes to other important areas of trade. Our negotiators must hold their nerve and not be intimidated, but they know that the mantra “no deal is better than a bad deal” is no more rooted in reality than the prospect of fifty 350-year old herring boats from Bruges suddenly appearing in the Channel demanding their eternal rights to fish in our waters.

Photo by waltercolor

Brexit and some alternative facts

In a time of universal deceit, telling the truth is a revolutionary act. (anonymous, often misattributed to Eric Blair aka George Orwell)

The truth is usually more complex and subtle than the simplistic soundbyte beloved of politicians and media headline writers. Fake news is not necessarily the problem; misinformation can be spread because the basic assumptions are incorrect, the background has not been thoroughly investigated or it is just speculation masquerading as fact.

The following are a couple of quite significant examples.  However, please don’t take my word and incomplete knowledge of these subjects for granted.  A much better source is Eureferendum.com and the original source documents.

Control of EU Immigration Requires Leaving the Single Market – NOT TRUE

How often have we heard or read this, but it is not actually correct.  The Single Market (aka European Economic Area), created by the European Union (EU) and to which the members of the European Free Trade Association (EFTA) also belong has free movement of goods, persons, services and capital as basic principles (set by the EU). The conditions of access of members of EFTA to the single market are set out in the Agreement on the European Economic Area which also includes free movement as a basic principle.

However, the EEA Agreement also includes an opt-out which can be applied unilaterally by members of EFTA (see Chapter 4, Safeguard Provisions, Article 112), but obviously not by Members States of the EU.  It states:

  1. If serious economic, societal or environmental difficulties of a sectorial or regional nature liable to persist are arising, a Contracting Party may unilaterally take appropriate measures under the conditions and procedures laid down in Article 113.
  2. Such safeguard measures shall be restricted with regard to their scope and duration to what is strictly necessary in order to remedy the situation. Priority shall be given to such measures as will least disturb the functioning of this Agreement.

This opt-out is intended to be temporary (until a permanent solution is implemented), but nevertheless can be invoked and maintained in the absence of that permanent solution.  It has been used already by Liechtenstein to control immigration and Iceland to control capital flows in the wake of the financial crisis.

The EU negotiators are already setting terms for the EU-UK negotiations – NOT TRUE

How often has the media reported that this or that person, with an appropriate grand EU-related title, is already laying down tough terms for us? In reality, at the moment there are no negotiators as such – just political nominations by various posturing organisations within the EU set-up and their self-important leaders or other politicians. The small print of the Lisbon Treaty Article 50 states:

  1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
  2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 218(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

Article 218(3) of the Treaty on the Functioning of the European Union states:

  1. Without prejudice to the specific provisions laid down in Article 207, agreements between the Union and third countries or international organisations shall be negotiated and concluded in accordance with the following procedure.
  2. The Council shall authorise the opening of negotiations, adopt negotiating directives, authorise the signing of agreements and conclude them.
  3. The Commission, or the High Representative of the Union for Foreign Affairs and Security Policy where the agreement envisaged relates exclusively or principally to the common foreign and security policy, shall submit recommendations to the Council, which shall adopt a decision authorising the opening of negotiations and, depending on the subject of the agreement envisaged, nominating the Union negotiator or the head of the Union’s negotiating team.
  4. The Council may address directives to the negotiator and designate a special committee in consultation with which the negotiations must be conducted.
  5. The Council, on a proposal by the negotiator, shall adopt a decision authorising the signing of the agreement and, if necessary, its provisional application before entry into force.

Clearly negotiations are with the Council (of the European Union) who nominates a negotiator and, at the time of writing, they haven’t done so, officially at least.

To sum up, all is not what is reported or stated to be true facts and because they are repeated so often, if not vehemently, it is easy to be taken in.

That speech six months on

(C) Mrs M Westrop, 2015

In David Cameron’s speech to the Confederation of British Industry last November, he set a benchmark for his negotiations  with the EU. The reasons for the current “fear” campaign becomes apparent if you compare Cameron’s stated objectives an what he actually achieved.

Here are a few examples:-

“…reducing the pressures that we face through immigration.” It soon became apparent that any hopes of any exemption for the UK from the “free movement of people” principle was going to be a non-starter. The best Cameron could achieve was to claim to have agreed an “emergency brake” on welfare payments to new migrants. All this amounts to in reality is availing ourselves of a 22-year-old provision written in the European Economic Area Agreement, fiddling with minor provisions in existing EU law which now need European Parliament approval and which can be overturned at a drop of a hat. 

…making sure we’re out of an ever-closer union.” We already have opt-outs from both Schengen and the Euro – the two motors of ever-closer union. Did Mr Cameron’s “deal” strengthen those opt-outs? Not according to many legal experts. The Lawyers for Britain group says that “Ever Closer Union” will remain in the treaty and the summit deal makes no difference to the UK’s legal obligations.”

….proper fairness between those in the eurozone and those out of the eurozone.” Similar issues apply here.  In a speech last month,  Owen Paterson MP said “if we Remain, we will be excluded from the very “top tables” in Brussels where the key decisions are taken by Eurozone members. They call it a “lasting settlement” in which “Continued allegiance would be required, but political engagement would be reduced.”

Mr Cameron did make one statement with which we would agree:- “Some people seem to say that really Britain couldn’t survive, couldn’t do okay outside the European Union. I don’t think that is true. Let’s be frank, Britain is an amazing country. We have got the fifth biggest economy in the world. We are a top ten manufacturer, growing steadily strong financial services. The world wants to come and do business here, look at the record of inward investment. Look at the leaders beating a path to our door to come to see what’s happening with this great country’s economy.”  Absolutely! However, we haven’t heard anything anything remotely as positive as this from him recently.  He warned that Islamic State and Vladimir Putin would both welcome Brexit. Big deal. So would John Howard, the former Australian Prime Minister, who said that he would have voted for Brexit.  Cameron also recently warned of the threat of war if we vote to leave.

However, when he said that “If I can’t achieve them {i.e., these objectives}, I rule nothing out“, it was obvious that this didn’t include campaigning to leave the EU, for he completely misrepresented the safest exit route and one which would have achieved all his objctives, the Norway option:-

They pay more per head into the European Union than we do.” WRONG!  One study suggests that Norway pays £1.66 per head of population per annum to access the EEA. Our net EU contribution is much higher, over £100 per head of population per year.

“They don’t have a seat at the table to determine what the rules are.” WRONG! Norway doesn’t have a final vote, but it is consulted in the framing of EEA-relevant legislation, so it DOES have a “seat at the table”. Furthermore, it only has to apply barely 25% of all EU legislation. The rest, not marked EEA-relevant, doesn’t apply .

“It is not a good deal.” But it is vastly better than EU membership. Norway is outside of the Common Agricultural and Common Fisheries policies, it is not subject to the European Court of Justice. if the Eurzone or an EU Member state got into financial difficulties, Norway wouldn’t have to pay a single øre, but we would.

In summary. Mr Cameron came back with nothing of any substance. Given that polling suggested that many swing voters would base their final decision on how successful his negotiations were, he knew that he had to divert attention away from his failure in Brussels. With no sign of the Leave side building up a lead, in the polls, maybe it’s time to return the focus of the referendum campaign to this dodgy “deal.”