May’s Speech – Predictable Overreactions

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So, the morning following the speech setting out Britain’s “position” on leaving the EU by Prime Minister Theresa May, the reactions are predictably diverse and some bordering on the hyperbolic.

We are left (in the words of Donald Rumsfeld) with Known knowns, known unknowns and unknown unknowns. Let’s start with the Known Knowns

We will walk away if we have to:

This was the easiest line to predict. Cameron went to Brussels knowing that whatever happened, however little he was given, he would react in exactly the same way. He was always going to put a frock coat on it and show it off like first prize.

Brussels is a place well used to such behaviour, and used him for its bidding, thinking that having the weight of the Prime Minister behind it would turn a dressed up frog into a prince. They didn’t bargain for the British people, who have a tendency to be rather more independent of mind.

May hasn’t made the same mistake – from the outset she is making clear that Britain can and will walk away, and that it is for the EU to weigh up the consequences of that for themselves as well as for us. It’s a standard negotiating position.

We will be outside the Single Market:

Bearing in mind the terms of the campaign, this is no surprise. Remain always pushed the idea that to leave the EU would be to give up single market membership, and Leave always took that as an advantage. Only a few of us in the middle argued a third way (EEA/EFTA). As we had no discernible impact on the outcome, it is entirely predictable that our campaign arguments have little influence in the tactics of negotiation.

But is this the disaster that some are predicting? Not from what I can make out. There will be some issues of course, but this is not a some desire expressed to go ‘Straight to WTO Rules’ by tearing up the 1972 agreement and not holding any negotiation at all. There is still plenty of scope for MRA, Trade agreements and the suchlike, without being members of the single market. For the politics of this, both sides must be seen to gain something, or equally to lose something. That doesn’t make it a zero sum game, politics is not business.

We will leave the Jurisdiction of the ECJ:

This again, is a bit of a no brainer. Even under EFTA/EEA, this would have been at least partly true. The influence of the ECJ would have still been there but its ability to impress its will at least one stage removed to the EFTA court. The amount of EU law would have been drastically reduced. It was never the perfect solution, and was never intended to be a permanent fix.

We will be able to control migration from the EU:

Again, this was an inevitable red line, I cannot for the life of me see why this is causing any consternation. But what it doesn’t suggest is that anyone currently enjoying the right of residence via EU citizenship will face any new hurdles to remain here.

We will seek Customs agreement with the EU:

This is a very sensible move. Along with the idea of Mutual Recognition and services conformity, Customs procedures will be one of the more complicated of the big administrative issues up for discussion. The nature of that agreement is of course, still an unknown at this point.

We will seek a UK/EU FTA:

This is quite ambitious, FTAs can often take a long time to negotiate and get hung up on the smallest of issues. But in a negotiation you start at the boldest point, so this is not anything we should not have expected to hear.

We will seek an Implementation period for that FTA:

So despite the reaction of many to the idea of a ‘Cliff edge’ – the government’s intention is still to avoid one. The open question is now how they will do that.

Known Unknowns:

How will the EU react to our negotiating stance?

Predictions this morning are that the EU partners are saying largely – ‘you’ll get nothing’. But of course, that’s exactly what you would say for public consumption in their position. Behind closed doors, discussion will be much more sensible, this is how negotiations work.

I think we must wait and see what shape the discussions take, and refrain from the panic commentary of “We’re Doomed, doomed I tell ye” that has featured in some places  overnight. Governments like to get re-elected. Clinton was right when he said “It’s the economy, stupid”. May is not going to throw herself under a bus, and there will be compromises along the way.

At the same time we know that the EU has its own internal problems, without now taking a trade hit, or suffering any difficulties in accessing market money for EU based businesses. The objective for both sides will be to first do no harm to themselves.

For one’s self respect and anger management, avoiding the press at this time (on both sides of the English channel) is certainly advisable!

What has been the response to discussions behind closed doors?

The idea that discussions have not been happening is fanciful nonsense. Firstly, these informal discussions go on all the time between officials in corridors, opening up lines of contact that are un-minuted and unofficial. The world doesn’t just exist in the formal sphere. Feelers will be out, on both sides. What we see in public is just the show, not the substance.

We don’t know what the intelligence services are saying either, but we do know that the PM will be receiving intelligence reports that have a bearing on the positions of others in the negotiation, (just as they will have on us). Remember that we are dealing with 27 sets of interests, not just one position. The EU talks like a single entity, but it is much more complex than that.

We also don’t know the response of Norway, Switzerland, Lichtenstein or Iceland. Have we made overtures about rejoining EFTA, and have they been accepted or rebuffed? Again, these are positions we know could be, or might have already been explored, but we don’t know the progress of them.

Implementation period:

What does May intend by this? We know that the entire EU Aquis will be incorporated in to UK law, David Davis has told us this already. Does this mean that the implementation period will comprise of a set time, still under the rules and principles laid down in the EEA agreement? It’s not impossible, and if there was a sunset clause here then it would be more palatable politically in the UK.

Some criticism has been made also that we cannot have an implementation period to a destination that we cannot know, because it will be impossible to agree an FTA in two years. I have some sympathy with that view, but it is not impossible to set out the broad scope of objectives within the two years, leaving the implementation period to thrash out the details. Of course this still creates a deadline, but it doesn’t have to be like article 50 by necessity – in that it relies only on our partners for extension.  We already have some templates, such as CETA, which can be built on. This might not be entirely ideal for some, but it does mean that we are not starting entirely from scratch. It should also be noted that we start from a point of regulatory harmony, something that no other FTA negotiation with the EU has experienced.

As for the implementation period, it would need to be subject to (if it were EEA based) some form of arbitration. And this is where the EFTA nations question arises again – would they agree for the UK to join EFTA, or to adopt the EFTA court as a temporary arbiter of this period? Of course, if May has already had some feedback from EFTA, then she would be in a position beyond that which we know. It should be remembered that EFTA membership is not reliant on EEA membership – Switzerland is outside the EEA. We might retain EFTA membership permanently, even after leaving the single market.

Unknown Unknowns:

Many scoffed at Donald Rumsfeld over this term, but it was an important recognition that there are simply possibilities which we may not have even anticipated arising. As commentators from the outside, we are not in a privileged position for information, so we must accept that with some humility.

While we can of course, read and interpret the statements of ministers, the law as it is written, the treaties to which we bind ourselves and of course the historical precedents, we are still outside the process. Our position is one of being fallible, even if our research is entirely accurate. For most of us, our understanding and interpretation of EU and international law was constantly moving even during the campaign, it would be supremely arrogant to believe that we have somehow reached total understanding now.

DON’T PANIC!

The Hitch Hikers’ Guide to the Galaxy has these important words printed in bold letters on the cover. It’s probably the best advice ever issued in the Galaxy. (Along with the bit about Vogon poetry, that was very important advice).

Panic is futile. It won’t change anything, and you’ll probably give yourself an ulcer.

Article 50 hasn’t even been triggered yet, there is a long way to go. If we start panicking now over every statement that is made it’s going to be a very long two years. Also, it won’t help to heal wounds that have opened up in UK political discourse to rush to hyperbole and exaggeration as if wild articles in the Guardian or Twitter warriors really have an influence on those who will undertake the negotiations. LBC’s James O’Brien will tell you every day, for three hours a day if you can last that long, that its all for the consumption of the Daily Mail – Dacre is the real driver of the government. If you listen to him, you’re likely to have a nervous breakdown by 2019. Spare yourselves, I  implore you! Spare the NHS, it’s stretched enough as it is!

What we really know is actually…not very much. And we won’t know that much until we see the negotiations unfold. May is playing poker with her cards face down, that much is sensible at least. But two years is a long time in politics, and there are many events to come, as any historian will attest.

 

One thought on “May’s Speech – Predictable Overreactions

  1. If you agree that FTA is not possible within 2 years, that the rather vague transitional ‘implementation period’ will need a new treaty which may also be difficult to thrash out in 2 years, and that the WTO option would cause major problems short-term, then surely panic is the right reaction?

    Panic is the only action that could realistically bring about a shift in policy. You seem very optimistic that despite the weaknesses in the speech, there is enough time and political leverage to get a safe result for the UK. It seems likely that her speech was a opening gambit in negotiation. But it appears to be a very poor one, in that everyone can see that ‘a bad deal’ would not be better that no deal, in contrary to what she said.

    You say let us give it time, but what if she realises that an FTA is not possible in a year or 18 months time. What happens then? We end up with a far worse deal than the interim Efta-EEA option. And if we eventually agree an FTA this will be arranged from a position of weakness, and thus likely end up giving us a permanent bad deal, when we could have bargained from a position of strength from within the EEA with time on our hands.

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