by Frank Schnittger
Fri Jun 1st, 2018 at 06:54:50 PM EST
With 300 days to go to Brexit, the Brexit negotiations are facing a perfect storm of UK Government incompetence, Italian governmental policy changes on the Euro, and a trade war initiated by Donald Trump. The UK government has still not made up its mind as to what kind of relationship it wants with the Customs Union and Single Market, and seems no closer to coming up with a coherent solution to the problem of the Irish border.
While Boris Johnson continues to waffle on about wanting a clean break from the EU, the UK government is actually seeking ever more complicated solutions to retaining "friction free" access to the Single Market and wants to retain access to the Blue Skies agreement, the Gallileo project, Europol, the Prüm Convention, and to retain influence over European defence and foreign policy. Basically the UK is seeking a partnership of equals between the UK and EU, and the EU is having none of it.
Meanwhile the "Italian Crisis", which is seen by many in the EU as a more serious threat to the Euro and the EU than Brexit, is reminding EU negotiators of just how much they need to show the Italians (and everyone else) of how much they stand to lose if they leave the EU or the Eurozone. The Italy Panic Might Be Bad News for the U.K.
The EU's chief Brexit negotiator, Michel Barnier, stepped up rhetoric last weekend on the need for the U.K. to be worse off. It was sparked by last week's round of negotiations in Brussels in which European officials said they were taken aback by how much the British government wants to continue after Brexit as if Brexit never happened.
Meanwhile the EU has "closed the door" on trade talks with the US after Trump imposed tariffs on Steel and Aluminium imports into the US. The EU has retaliated with tariffs on Bourbon and Harley-Davidsons and the dispute could escalate into a full scale trade war if the US extends tariffs to EU car exports as Trump has threatened to do.
If Theresa May - who apparently has difficulty getting a word in edgeways in meetings with Trump - needed any reminders of how difficult it may prove to be to get an advantageous trade deal with Trump, this is surely it. There can hardly be a worse time to be pursuing "ambitious trade deals" than right now, with anti-globalisation parties gaining influence and a trade war in the offing.
Worse still, the EU is embarking on a new round of internal budget negotiations against a backdrop of cuts forced by the loss of the UK contribution to the budget. With Poland - currently at odds with the EU over it's anti-democratic "reforms" - also the largest net beneficiary, sparks are surely going to fly. Some member states might welcome the increased revenues tariffs on UK and US goods might bring in.
All of which is a long way of saying that the omens for a Brexit deal are not good. The UK government is still negotiating with itself much more than it is actually negotiating with the EU negotiating team and the internal political dynamics of the EU are not helpful to a generous approach. Expectations on both sides are still so far apart, it could be many years before common ground becomes clearly visible to all.
Brexiteer joy that the Italian crisis could bring forward their long predicted collapse of the EU won't have helped the negotiating atmosphere. Neither will the plan to mint special coins to to celebrate Brexit. The EU could well have an incentive to make sure they are worth as little as possible.
But spare a thought for poor former U.K. Chancellor of the Exchequer Nigel Lawson. A long time advocate of Brexit who chaired the Vote Leave campaign, he's preparing for Britain's departure from the EU by applying for French residency, to allow him to continue living in south west France. Apparently he is finding the bureaucracy involved "tiresome."