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1) There’s A Lot Of Buzz Around Staying In The Customs Union
2018 needs to be a “year of decision” after 2017’s “year of division”, the Director-General of the CBI insisted on Monday.
Unfortunately for Carolyn Fairbairn, it seems the decisions that have been taken aren’t going her way.
In a much trailed speech on Brexit, Fairbairn called on the Government to rethink its opposition to leaving the customs union with the EU after Brexit.
Her argument is simple: the trade the UK would secure from being outside the customs union is smaller than the trade the UK has from being inside.
“Now, there may come a day when the opportunity to fully set independent trade policies outweighs the value of a customs union with the EU,” she said, adding: “But that day hasn’t yet arrived.”
In other words, if it ain’t broke, don’t fix it.
Her views found favour with former Culture Minister Ed Vaizey, a man who if you looked up the definition of Cameroon in the dictionary you’d see a picture of his face. And a description of the Central African country, I suppose.
Anyway, Vaizey told Peston on Sunday staying in the customs union “should be on the table”.
When it was put to him that staying in the customs union would prevent trade deals with other countries, Vaizey laughed: “If we were worried about trade we would have stayed in the Customs Union.”
Brexiteers were unsurprisingly not convinced by this argument.
Foreign Secretary Boris Johnson took to Twitter to say: “Staying in the customs union means effectively staying in the EU: the EU *is* a customs union. It means no new free trade deals, no new export opportunities, and no leading role in the WTO.”
That doesn’t exactly undermine the point Fairbairn made. Surely what would have been better is if Boris was able to reel off studies and examples of how the UK could thrive outside the customs union.
Whenever you’re ready, Boris.
2) Brexiteer On Brexiteer Attacks Could Be About To Rise
It seems that Jacob Rees-Mogg is taking a rather different approach to being chair of the powerful European Research Group than his predecessors.
Whereas Steve Baker and Suella Fernandes’ periods in charge of the pro-Brexit group of Tory MPs earned them ministerial positions under David Davis, the Moggster is not too bothered about such patronage.
Why else did he fillet his potential boss quite so spectacularly on Wednesday?
Davis’ appearance before the Brexit Select Committee on Wednesday was producing plenty of newsworthy moments before Rees-Mogg began his cross-examination.
The Brexit Secretary had already dismissed his own claim – made in 2013 – that the UK should remain in the customs union after it leaves the EU.
“Basically I looked at the facts, and as the facts changed, I changed my mind,” said Davis as he defended the Government’s position of leaving the customs union.
He also claimed anyone who used the phrase “red lines” when going into a negotiation was an “idiot”.
Of course, Davis used that phrase himself during a question to David Cameron in 2014 ahead of the then-Prime Minister’s renegotiation with Brussels.
Rees-Mogg used his question to grill Davis on the UK’s relationship with the EU during the two-year transition phase.
“It’s hard to think of any precedent in the world where an independent nation has taken the judgements of a foreign court as its superior and immediate law without having any judge in that court.
“We are a vassal state for a two year period,” he added. “That is a big shift in government policy and a big move away from the vote in June 2016.
“Aren’t we just still acting as if we are in the EU, we are bound by the EU, we are lackeys of the EU? Can’t we be a bit bolder and implement the referendum result?”
Davis argued the one important difference between the current situation of EU membership and the transition period between 2019 and 2022 would be that the UK would be free to sign new international trade deals.
The flare-up between the two Brexiteers was incredibly revealing. It seems that even though Theresa May made clear in her Florence speech in September the rules of a two-year implementation period “would be the existing structure of EU rules and regulations”, many Brexiteers did not quite appreciate the significance of this.
Now they have, and the Government could find itself facing increasing pressure to deliver full-fat Brexit on time, as promised.
If not, MPs might want someone else in charge.
Maybe Rees-Mogg was auditioning on Wednesday, but not to be a junior minister in the negotiations, but to be leading them.
3) The Trade Department Is Hoping Other Countries Aren’t As Keen On New Deals As We Are
Down the corridor from Davis v Mogg, International Trade Minister Greg Hands was dealing with awkward questions of his own.
Appearing before the International Trade Select Committee, Hands was asked about all those trade deals the EU has with other countries, which the UK currently benefits from. Would they still apply during the transition phase? Do we need to ask the EU’s permission? Will we be able to get them all moved over to separate deals before March 2019?
The would “continuity” was used a lot in Hands response. The plan is to get those deals copied over to the UK, and then revisit them later on if needed.
Committee chair Angus MacNeil spotted a flaw in the plan: Other countries might not want to do that.
“If you put yourselves in their shoes, any trade negotiator from a third country who is worth his salt and looking for a promotion from where he is at the moment, he’s not going to let this opportunity pass him by surely?” he said.
Hands claimed other countries would not want to reopen talks on trade deals as they would not “want to risk the whole agreement and the whole trading relations to do that when both sides are clear that we don’t want to substantively change the terms of trade.”
He later revealed if the more than 40 countries which the EU has deals with today decided to reopen negotiations with the UK over the agreements, the Government wouldn’t be able to cope.
“For the reasons I outlined, renegotiating one of those agreements may not be possible, there’s also reasons of continuity, there’s also reasons of resources in our department.
“If we were to enter into 40 plus live trade negotiations, and have to get them done within the space of 14 months, you’ve got to bear in mind what is actually possible.
“But also most importantly we have the ability to return to those agreements in the future once we have made that transition.”
Committee member Chris Leslie said after the meeting: “In the real world, countries are not just going to roll over and do Liam Fox’s bidding, they are going to take the opportunity to try to press for better.”
4) A Divide And Conquer Approach To Brexit Might Just Work
French President Emmanuel Macron showed how a politician should behave in an interview earlier this week, adopting the radical step of actually answering questions and not falling back on slogans and clichés in a chat with Andrew Marr.
On the Brexit negotiations, Macron repeated what he said during a joint press conference with Theresa May two days earlier: if the UK wants all the benefits of the Single Market, it has to pay in and accept the four freedoms.
Yet on financial services, Macron said any Brexit deal “depends on what you’re ready to put on the table in terms of precondition.”
This suggests a trade-off is possible – perhaps money paid into the EU budget in exchange for a deal for the City.
Italian Prime Minister Paolo Gentiloni developed that point in an interview with Bloomberg from Davos on Wednesday.
He said it “is totally unrealistic” to exclude financial services from any deal, and among the remaining EU states there was a “strongly prevailing position supporting the necessity of having a good deal with the UK.”
This position contrasts with that of EU Chief Negotiator Michel Barnier, who said in January: “There is not a single trade agreement that is open to financial services. It doesn’t exist.”
Such discrepancy of opinion feeds into the Brexit-backers narrative that Brussels is focused on playing a political game with negotiations, whereas heads of state are a lot more pragmatic about not cutting off their collective nose to spite their face in order to punish the UK for leaving the EU.
Don’t Get Angry, Get Blogging…
At HuffPost we love a good blog, and here are the finest Brexit-penned entries from this week. Have a read, and if any of them provoke an urge in you to speak your brain, send a blog to firstname.lastname@example.org and you could find yourself in this very newsletter.
Owen Bennett on how Ukip could still rise from the dead
Sam Gyimah on making Britain a 21st Century scientific and technological powerhouse
Anand Menon on surveying MPs on their attitude to Brexit, and the fascinating results
Rabbil Sikdar on what Brexit means for Labour’s ‘internationalist’ reputation
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