It takes years to work out what is most important and how to achieve it in international negotiationsby David Henig / November 26, 2019 / Leave a comment
The commitment is clear, even in a Conservative manifesto of frequent vagueness. “We will negotiate a trade agreement next year—one that will strengthen our Union—and we will not extend the implementation period beyond December 2020.” There continues to be much discussion about whether such a timetable is feasible, given the EU has never concluded a major trade agreement in anything close to that time and the UK has for decades now not concluded any at all.
There is another big issue with the timescale which has been less discussed. For some time, when discussing a future UK-EU trade agreement, I’ve used the following formulation: the EU couldn’t agree a trade deal in one year, and the UK shouldn’t. I rather suspect that many of those pushing for a quick trade deal don’t actually know what tends to be in them, in particular that they involve fixing the rules of trade between partners for the foreseeable future.
Trade deals are often considered with analogies to dating, marriage, and in the case of Brexit, divorce. In most trade deals there’s a phase in which the two parties consider the likely scope of agreement before starting formal negotiations, to make sure asks are roughly compatible (something like dating). But clearly 11 months isn’t long enough to do much scoping, and the UK and EU will be instead like a divorced couple trying to instantly write a contract for a new marriage. Only the marriage contract is going to be over 1,000 pages long and will go into great detail about every aspect of the relationship. It isn’t a perfect analogy, but it should provide some pause for thought.
Let’s look at some of those details of a trade agreement that one should take time over. Start with tariffs, where there is a widespread assumption that a deal will ensure there are no tariffs between UK and EU. Wrong. Only a UK-EU customs union could remove all tariffs; the best a trade agreement can do is to set them at zero provided certain conditions, known as “rules of origin,” are met. Get the rules of origin wrong, and either your producers will still face tariffs or they will have to change their sourcing of components…