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Despite the shambles of the past few days, the Brexit negotiations will push forward – but it won't be easy

A soft Brexit is far superior to crashing out, but it is also inferior to the status quo, where there is certainty, security and, above all, a strong British voice in the affairs of the largest economic bloc on the planet

Friday 13 July 2018 12:06 BST
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Dominic Raab, the new Brexit secretary, may be enthusiastic and capable, but will he be more persuasive to the EU than his predecessor?
Dominic Raab, the new Brexit secretary, may be enthusiastic and capable, but will he be more persuasive to the EU than his predecessor? (EPA)

With 100 days to go before the crucial summit at which the EU and Britain must decide their future relationship – the last practical point for any chance of an orderly outcome – the government’s policy is, at last, crystallising. Even Michel Barnier, speaking on a visit to New York, sounded unusually upbeat, remarking that 80 per cent of the decisions about Brexit have been agreed – though he was polite enough not to point out that the remaining 20 per cent contain the most intractable issues.

After waiting some two years for the remotest level of detail about future trade and economic ties, having to wait another week or so for the white paper is hardly a great inconvenience, if only because we’ve come so used to shambolic government.

From what is known about the direction of thinking after the Chequers meeting, and from what is all too visibly clear about the state of the Conservative Party, there is cause for some measured optimism about the eventual outcome. There are, however, risks.

On the basis that Boris Johnson and David Davis found the formulations cooked up at Chequers, it suggests that the UK is inching towards the type of “soft” Brexit they abhor. With the prime minister, wisely, refusing to rule out future concession in negotiations, there is every chance that the British will eventually agree something that looks very much like the type of arrangement Norway has with the EU when the crucial summit arrives in October. Thus, the UK will find itself inside the single market for large parts of the economy, technically outside the customs union but with an as yet untested “arrangement” to minimise friction at the Irish border and British ports, plus some form of association with various other EU agencies.

It is worth repeating that while any such deal is far superior to “crashing out”, it is also inferior to the status quo, where there is certainty, security and, above all, a strong British voice in the economic affairs of the largest economic bloc on the planet. It is still not impossible, given the political turmoil, that Britain might somehow, almost accidentally, find itself remaining in the EU after all.

However, the resignations of Boris Johnson, David Davis and others do, for the moment, have the perverse effect of strengthening the prime minister’s position and her chances of carrying her Chequers plan in her party and in the House of Commons. An ever softer Brexit looms.

That said, just as the best military plans never survive their first contact with the enemy, so too will the Chequers plan not emerge unscathed from the attentions of Mr Barnier. As one EU diplomat reportedly said, the UK is now looking for “three and a half” of the EU’s famous four freedoms, proposing free trade in goods and services, and free flows of capital, but imposing some sort of cap or qualification on the free movement of labour – one of Theresa May’s “red lines”.

It is this, above all, that the EU will find it most difficult to agree to in principle. It is not a matter of theology, though the EU’s leading figures, Chancellor Merkel and President Macron, place great faith in this freedom as a symbol and reality of European unity. It is simply that if the British are allowed to have such a special treatment, then every other nation in the EU will be looking for a similar opt-out. At a time when the EU is trying to deal with migration in a fair and humane manner, with many national governments raising objections to allowing the free movement of people, the EU has to protect this pillar of the European project from erosion. It might be that the British will have to offer some other concession in return for taking back control of the borders, but this might well prove costly indeed.

Who is new Brexit Secretary Dominic Raab?

The second problem for the new Brexit secretary, Dominic Raab, is an understandable scepticism about the UK restoring an effective veto over the parts of EU legislation and European Court rulings it doesn’t like. The UK may say that it is a veto that wouldn’t be used often, and that the consequences of loss of market access would be accepted, but that does not necessarily make it palatable to the EU. It is akin to the current agreements with Switzerland, which entail constant negotiation over fresh Swiss and EU laws, a task the EU finds increasingly irksome. Once again, the EU would require incentivising to accept this sort of proposal.

Third, the longstanding problems with the “customs agreement” remain. Nowhere in the world does one nation voluntary collect the tariffs and duties imposed by another at its own borders, with a complex system of rebates and differential taxation being required for every consignment.

The glib answer offered by ministers that it can all be solved with technology has always aroused scepticism in Europe – “magical thinking”, as they say. Mr Raab is unlikely to be more persuasive than Mr Davis was for the simple reason that this has never been done before. It may, in reality, take many years, and long after the proposed transition period, to see such software arrive. Meanwhile, the UK might well find itself left inside the EU customs union, because being outside it would destroy so much of what’s left of British industry.

So the government has a fresh look, some enthusiastic and able new ministers in important jobs, an unexpected degree of unity among the cabinet and something of a sense of relief in official circles at the departures of Mr Johnson and Mr Davis. Yet the old problems of securing a “good Brexit” remain.

It will be a surprise if the EU accepts the white paper in its entirety as the universal solution to the historic question of settling Britain’s role in Europe. Eventually a compromise should be reached, because the alternative is too terrible to contemplate. At that point all involved will rediscover the power of the old adage that a really good compromise is thing that leaves both sides dissatisfied.

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