Comment: Likelihood of a no-deal Brexit is higher than ever

Business Post article on Thursday 4th June, by Neale Richmond

As video-conference negotiations fail to find progress and leaders are distracted by fighting Covid-19, the outlook is bleak for Irish and British businesses already reeling from the pandemic.

For the fourth time, this week Michel Barnier’s negotiating team is meeting David Frost’s negotiating team by video conference in an attempt to work out a future relationship between the EU and the UK.

As it stands, we are halfway through the Brexit transition period and the UK is still applying the terms of EU membership without actually being a member any more.

So far the negotiations have not gone well. It was always ambitious that a far-reaching deal could be achieved in such a short period but the Covid-19 crisis has had a major impact.

Firstly, negotiating by video conference is sub optimal to say the least and adds further to the fractured nature of the talks, which are already broken down into parallel talks based on each sector.

Secondly, the understandable focus of every EU member state, the EU itself and the UK has been on responding to the Covid-19 crisis and this has taken much of the political pressure away from these vital negotiations.

Thirdly, it is not insignificant that major actors in these negotiations have been laid low by the virus, both Barnier and Boris Johnson have contracted it while Frost was also required to self-isolate.

The divisions between both parties in these negotiations have been long flagged and are clear.

The EU is sticking to the spirit of the Political Declaration that accompanied the Withdrawal Agreement in aiming for as close a relationship between the EU and the UK as possible. Part of this is the adherence by the UK to the rules and standards of the EU’s single market in order to gain access to it.

The EU is the largest economic bloc in the world; favourable access to its single market is sought by all other trading nations, based on an acceptance of clear rules and standards. Awareness of this seems absent from the current British negotiating strategy which has been referred to repeatedly as “cherry picking“.

The risk of allowing the UK access to the single market without guaranteeing adherence to standards and rules would be extremely detrimental to the EU’s members; allowing for undercutting and diminishing the very structures that make the EU’s single market so successful.

The area of fisheries is a hugely symbolic one for Britain, and the recent Conservative resurgence in Scotland has been closely associated with a strong stance in fishing communities. The EU’s negotiator has signalled some flexibility here but the geographic position of Britain means that overlap and compromise on this area is a must for overall progress. Again, the EU’s member states cannot be expected to wilfully undermine their own fishing industries to satisfy the political desires of part of the Conservative Party.

Many other issues are also at play and while there is a surface-level undertaking that both sides are seeking to achieve a mutually beneficial agreement, the contracted timeline and selective British rhetoric does not augur well. It must always be said, of course, that despite the rhetoric, whatever is achieved will not be as good as the status quo. There is no such thing as a good Brexit.

This week’s round of negotiations are the final set before a stock-taking exercise and a window at the end of the month where Britain can request a one or two-year extension to the transition period in order to hammer out a more comprehensive deal.

The likelihood of an extension being sought is extremely slim. Frost and a number of other British politicians have consistently stated that an extension would not be requested. This is clearly a political point to appease an electorate that sought simply to “get Brexit done” last December. For his part, Barnier has indicated that the EU remains open to an extension request.

The strident line in relation to an extension has been accompanied by some choice accusations from Frost that the EU is being intransigent amongst other things. Such hollow claims are no doubt made to prepare the ground for blame if a deal is not reached. The EU’s position has, of course, been extremely clear for years despite Britain’s position changing many times. Let’s not forget, in advance of the Brexit referendum, Johnson was adamant that Britain would not leave the single market.

So where does this all leave us? The likelihood of a no-deal Brexit occurring and the UK departing to trade with the EU solely on World Trade Organisation terms is higher now than ever before, even without the baying cries of “let’s go WTO” from the extreme Brexiteer fringe. If a deal is to be achieved before the end of the year, it is hard to see how it will be anything more than bare bones.

Neither prospect is good news for Irish or indeed British businesses currently reeling from the economic and societal impact of the worst global pandemic in over a century. The Irish government has announced that current events mean another Brexit Omnibus Bill will have to be introduced while the “get Brexit ready” campaign remains active.

Such a bleak vista is a disappointing one for all involved, no less the many Irish, British and European actors keen to see a deal materialised despite the disappointing political direction coming from Westminster.

Neale Richmond is a Fine Gael TD for Dublin Rathdown and the former chair of the Seanad’s special committee on Brexit.

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