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Would you buy a used car from one of these men?

This article was first published on The UK in a Changing Europe.

The negotiations between the UK government and the European Union make it
quite clear that neither Boris Johnson nor Michel Barnier would buy a used car
from the other on trust.

That’s not because they differ about whether the driver’s wheel should be on the
right or the left. It is because there is mutual distrust, albeit for different reasons.
The Prime Minister doesn’t want the guarantee that Barnier is offering for
enforcing any agreement about the UK’s future trade relations that they must
meet an autumn deadline in order to avoid having no deal. This is because the
EU would like any guarantee with the UK to be settled by EU law.

Barnier wants an enforceable guarantee because he does not trust Boris
Johnson to keep his word. In order to get Brexit done, Johnson signed a
Withdrawal Agreement that promised a significant customs barrier between
Great Britain and Northern Ireland.

This lost him the trust of the Democratic Unionist Party. To assuage their
concerns, Johnson has since said the new policy would be enforced with a light
touch, and this lost him the trust of Barnier.

The normal thing to do when buying a used car is to ask the salesperson if there
is a guarantee if its condition is not as promised. No guarantee means no deal.
By contrast, the normal thing in reaching a political agreement with a group of
countries is to treat their commitments with a light touch, because there is no
guarantee that the terms can be enforced.

The agreement that the UK and EU teams are currently negotiating is intended
to cover a substantial number of commitments. These could include the rights of EU and British citizens living in each other’s jurisdiction, tariffs, state aid, competition and the protection of workers’ rights and the environment.

As with any set of regulations, especially when they are stated in both French
and English, issues can be expected to arise about how each partner
implements the agreement.

The potential for disagreement is high, because the purpose of Brexit, as far as
Downing Street is concerned, is to allow the UK to depart from EU policies and
rules.

In discussions with the EU, British negotiators say new standards will be as high
or higher than EU standards.

In discussions with Conservative MPs, the emphasis is on Britain differing from
EU regulations in ways that give it a competitive advantage.

How British standards affecting trade will differ from the EU in practice is
unclear, because the UK government has yet to spell them out.

This is not so much a Machiavellian strategy of hiding a well-prepared plan of
action, as it is a sign of the UK government not yet having decided what specific
measures will be changed to give substance to the Brexit rhetoric of ‘taking back
control.’

To Europeans who believe in a social market rather than in an unregulated free
market this signals that the UK might engage in social dumping, seeking to
boost exports by adopting lower standards than its EU competitors.

Before buying an agreement with a Prime Minister with a used-car salesman’s
reputation, Michel Barnier wants a guarantee that can be enforced. What he doesn’t want is what is implicit in the rhetoric of British negotiators: enforcement
provisions that the UK can slip out of.

The starting point for enforcement puts the two sides in a position of political
distancing. The EU would like enforcement by the ECJ whereas the UK
government veto this as inconsistent with regaining sovereignty.

Consultation is accepted in principle by both sides. This can reveal whether a
complaint is due to a misunderstanding that can be resolved by discussion or
whether there is a substantive disagreement about what obligations their political
agreement imposes.

There is recognition in principle of the need for arbitration when disagreements
arise about the rules governing future UK-EU resolutions.
Since neither Britain nor the EU is willing to let the other’s courts having the final
say, a special arbitration tribunal will be required to which each side can
nominate one judge and they can agree a tie-breaking third judge.

The first point of disagreement is about the scope of arbitration: the EU wants it
to cover all points in a single general-purpose agreement, while the UK wants it
to leave some matters free of binding arbitration.

The disagreement could be resolved by narrowing the scope of the agreement
by dropping those issues that the UK government wants to leave free of binding
arbitration. Narrowing would be welcomed by hardcore Brexiters and
acceptable to the EU because, by default, all the remaining topics would be
subject to arbitration.

The biggest dispute is about what rules an arbitration panel should follow. The
EU does not want any terms of the agreement to be dismissed as non-binding if
they contradict a hastily adopted Act of Parliament. It wants the arbitration panel
to refer to the interpretation of disputes to the ECJ.

While this is logical from a Brussels perspective, the chief British negotiator,
David Frost, has stated that the superiority of EU to British laws would be
contrary to ‘the fundamentals of what it means to be an independent country’.
To maximize the enforcement of the agreement, EU negotiators are insistent
that if any arbitration finds any one condition violated, then the offended side can
unilaterally suspend the whole agreement.

The British position is that this would be disproportionate punishment. But that is
just the point. If the UK government showed it was untrustworthy, the EU would
be glad to be quit of further disputes by abruptly cancelling the UK’s favoured
access to EU markets and leaving Britain with no deal.

The effect would be relatively small for the EU. However, this would affect not
only British sellers of used and new cars but also all engaged in EU trade, from
the Conservative red-wall constituencies in the north of England to the City of
London.


By Richard Rose, Professor of Public Policy at the University of
Strathclyde. His newest book is: How Referendums Challenge European
Democracy: Brexit and Beyond.

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