Thursday 13 September 2018

Letter to my MP - Deals and No Deals



This morning we saw Dominic Raab announcing in the Telegraph that "Britain will not pay its 'divorce bill' in the event of a no deal". He appeared on the Today programme to make the same point, but the discussion included a statement (from the presenter) that the £39bn payment agreed by the prime minister last December "could be slashed in half in the absence of a comprehensive trade deal".

Yesterday at PMQs Chris Philp asked "When it comes to Brexit, the joint statement of 8 December last year said that 'nothing is agreed until everything is agreed'. Does the Prime Minister agree that this means that the payment of the £39 billion exit payment and the Northern Irish backstop are dependent on agreeing satisfactory final-state trade arrangements?" Mrs May replied (in part) that "we need to have a link between the future relationship and the withdrawal agreement".

In recent months I have heard Suella Braverman try to convince a select committee that the principle "nothing is agreed until everything is agreed" means that the withdrawal agreement which is being negotiated at the moment is conditional on a final trade deal with the EU which is not currently being negotiated.

I could quote other examples, but I hope this selection is enough to demonstrate that the government is taking - at the very least - an ambiguous position.

If we fail to conclude a withdrawal agreement, the financial settlement defined in that agreement falls as well. That much is clear. The EU would try to pursue what we have accepted are commitments freely made, and Mrs May still maintains that "we are a country that honours our obligations", so it could drag on for some time.

But that is apparently not what we are talking about here. Mr Philp refers to "final-state trade arrangements", which can only refer to a full trade agreement (not the political statement on a future relationship which should be delivered along with the withdrawal agreement). Yet he is setting that up as a condition for the payment of any of the money that was agreed last December. Later in his question he refers to "the legally binding withdrawal agreement, which also requires those final-state trade agreements to be fully agreed and implemented by 31 December 2020 in a form acceptable to this House". And Mrs May did not demur.

Even if everything goes according to the current plans there is no guarantee of a trade agreement by the end of 2020 - I can't see the "requirement" that Mr Philp refers to in the Joint Report - and it would be a separate agreement negotiated by different teams on both sides under different law and treaty provisions on both sides. There was no agreement in the Joint Report that any provision of the withdrawal agreement which we are negotiating would be conditional on achievement of a separate agreement which we are not yet negotiating.

On the face of it, these discussions are an attempt to revisit things which have already been agreed, and it has reminded observers of David Davis's statement after last December's EU Council that the Joint Report was 'much more a statement of intent than it was a legally enforceable thing', which he had to "clarify" the day after.

Not only is every word uttered by our representatives watched and noted by negotiators and governments in "Brussels" and every EU27 capital, so too can negotiators and governments in countries which might have an interest in future trade deals with us see what has been said. The Financial Times's legal commentator (and many others, with a professional interest and not) are very worried by this. To quote David Allen Green of the FT (in a series of tweets):

"The UK is proposing to renege on the payments to the EU it has already agreed in principle. This is dangerous madness. As a post-Brexit UK makes its own way in the world, it is crucial that future partners see UK as trustworthy in its promises... And it is because of the UK's propensity to backslide that the EU27 is right to seek solid contractual obligations from UK. Wouldn't you, if you were the EU? A sensible UK government, acting in the national interest, should be making a show of honouring its obligations as it departs EU. This would impress potential trading partners in future trade deals. But we do not have a sensible UK government, acting in the national interest. If the UK were serious about entering into post-Brexit international trade deals then it would be using the exit negotiations as a showcase for how seriously it took international agreements. Instead we offer dappy pantomime while the world watches. And this will hurt the UK in long-term far more than any supposed advantage the UK thinks it is gaining by larking about in the exit talks. Worst possible start to UK's post-Brexit future."

I believe that the government's maintenance of an ambiguous, or even cynical, position goes far wider than a short-term negotiating tactic. It is taken in by those of us watching the news and reading the papers, and by our international partners and our prospective future partners, and it does not look good. Whatever you think of Brexit - and I consider it to be a serious mistake - this approach is short-sighted and likely to be counterproductive.


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