UK’s former EU rep: government’s No Deal threats unconvincing
The UK government’s attempts to use the threat of a No Deal Brexit to force further concessions out of the EU carry little weight on the Continent, the former UK permanent representative to the EU said last week, because it is obvious to everyone that reverting to World Trade Organisation (WTO) trading rules would seriously damage the UK economy.
“Nobody views No Deal as a permanent end state – and nor does the British government, incidentally,” Sir Ivan Rogers told an audience at the Institute for Government. “Why is [international trade secretary] Liam Fox and his department touting himself around the world to get continuity on existing free trade deals which we have by dint of European union membership? Because WTO terms are not as good as FTA [Free Trade Agreement] terms.
“If that is true in global terms with the FTAs we have by dint of EU membership, it is true of our relationship with the EU,” he added. “So I am afraid the other side is never going to believe for one minute that the government is at all serious about a No Deal option, because they don’t think a No Deal sustainable for the UK economy.”
An obvious bluff
UK prime minister Theresa May spent years arguing that “No Deal is better than a bad deal”, and has worked to frustrate efforts by MPs to block off No Deal as a possible outcome – fearing that it would reduce her leverage in persuading MPs to back her Withdrawal Agreement proposals.
She is set to make another attempt to win parliamentary support for her deal next week. And if it is rejected, she has pledged to permit votes on whether to leave with No Deal or request a delay to the UK’s departure from the EU. She has told the House of Commons dozens of times that there will be no delay, leaving her with an awkward decision over her position on these follow-up votes.
Meanwhile, UK ministers have been trying to force further concessions out of the EU, attempting to win legal assurances that the ‘backstop’ agreement will be temporary. Its only real leverage is the threat of No Deal – but as Rogers pointed out, EU negotiators find the UK government’s position unconvincing.
Fox’s department has made strenuous – and almost entirely unsuccessful – efforts to replicate the EU’s FTAs with third party governments. And Rogers noted that EU negotiators “look at the behaviour of UK ministers, as opposed to what they say, and they know UK ministers are acting as if WTO terms with anywhere else in the world where we don’t [currently] operate on them are bad and a reversion to something worse than they have got at the moment.
“If that is true in EU FTAs, it is true for the EU as well. No Deal is therefore not a sustainable end state, and they know it. There are multiple sectors where WTO terms are essentially meaningless. What does that mean on energy and aviation and data and multiple other areas? So their view is that there is no such thing as a sustainable No Deal. In the end the Brits will want, and should want, a preferential trade deal.”
Get your act together
If an exit deal is eventually agreed, Rogers argued, the UK will have to improve its systems and capabilities in order to negotiate an FTA during the subsequent ‘implementation period’.
This task should not be left to the Department for International Trade, he said. “I would run it from the centre; I would have a sizeable but not huge team at the centre running the trade negotiation, and draw in all the capabilities of the departments.”
The UK’s former EU lead raised concerns over the government’s readiness to conduct negotiations. “You have got to…have confidence as the chief trade negotiator, both at official and ministerial level, that you have got a highly competent set of people in every area, from aviation to energy to phytosanitary to competition to employment,” he said.
“In every area you have got to have vetted that team: know it has got the capability; know it has got the resources; know it has got the legal framework; know it has got the background and [will] be at least as good as the people on the opposite side of the table. That is not the case [now]. We are not in that position.”
Strong leadership required
Rogers said the role of the top civil servant chosen by the prime minister to coordinate the efforts of departments in future trade negotiations will be crucial.
“I have done two main co-ordinating jobs – one for Tony Blair and one for David Cameron,” he said. “They are difficult jobs to do, because the person who is in possession in number 10 is the prime minister’s ears and nose and mouth and also the person advising personally the prime minister what counts, what doesn’t count, what is my assessment both on the substance and on negotiability.
“Of course, in that job you are going to disagree with various secretaries of state who have got their own particular interests. And you are saying: ‘Yeah, but they are overemphasising that, and that isn’t as important as this.”
Ministers will have to accept compromises in order to get the best outcome for the UK from trade talks, he added: “They have to understand that their interests and their bottom lines may get traded off in the end game by the prime minister, who has in the end to be the arbiter of what counts most for the country,” he said.
Open up
And Rogers warned that the government must become more transparent over its negotiating positions and trade plans during future trade talks.
“You need much more openness, much more collaboration. I am not saying everything has to be open to the public world but we are going to have to think about transparency in trade negotiations,” he said. “You can’t operate in the way this government has operated in the withdrawal agreement, I am afraid, in a trade negotiation.”
Rogers was speaking as MPs pushed for the government to reveal its planned tariffs in the event of No Deal. The Cabinet has agreed a plan to cut most tariffs to zero under that scenario, keeping inflation down – but leading to cheap imports that would threaten British businesses, and giving away much of its leverage in future trade talks. Two days after the Institute for Government event, the Treasury select committee urged the government to reveal its planned tariffs, pointing out that MPs are likely to be asked to vote on a No Deal next week without having had sight of the government’s plans.
About Colin Marrs
Colin is a journalist and editor with long experience in the government and built environment sectors. He cut his teeth in local newspaper journalism before moving to Inside Housing in 1999. He has worked in a variety of roles for built environment titles including Planning, Regeneration & Renewal and Property Week. After a spell at advertising industry bible Campaign magazine, he became a freelancer in 2010. Since then he has edited PublicTechnology.net, local government finance publication Room151.co.uk and contributed news and features to Civil Service World, Architects’ Journal, Social Housing, management titles and written white papers for major corporate and public sector clients.
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