“There’s good news from Brussels,” Boris Johnson announced at a press briefing on Christmas Eve after an agreement was reached with the EU. “Now for the sprouts.” What’s sprouting immediately from the agreement is not quite what the PM seemed to suggest.
The claims to triumph themselves brought reasons for concern. It was not always clear just what the British Prime Minister was saying; the greater concern could be that it may not all have been clear to himself.
Boris Johnson announced there would be as of January be no non-tariff barriers on trade with the EU. Inevitably, he was challenged over this at the press called to trumpet a trade deal with the EU. The British Prime Minister defended his remark over non-tariff barriers with an invocation of plugs.
“As for your point about non-tariff barriers,” the PM said, “it’s important to stress, and what I am talking about is barriers on the grounds of your plugs won’t work in our country and therefore they are banned or whatever. That kind of technical barriers to trade, and there’s a lot in this treaty to reduce all that kind of thing and to make sure that doesn’t, that’s a good thing for business and consumers, and in that sense it’s a great trade deal.”
What was he saying?
Of course, the UK and the European Union countries use different kinds of plugs, but non-tariff barriers are not about the round pins of EU plugs and the flatter ones in the UK. Tariff barriers are not about plugs, they are about regulation now of trade across the board. They stand between the UK and the EU as the thickest of red tape jungles that is sprouting up over just about every product to be bought and sold between the two countries from the New Year. Boris Johnson’s own government has been instructing businesses to prepare for a maze of non-tariff barriers—that he said will not now exist.
Finally, after his declaration that there would be “no non-tariff barriers,” Boris Johnson advised people to go to the government website to figure out how to deal with them. The PM did not sound quite, well, plugged in.
Hardly more convincing was the invocation of pigs to make the point just how independent Brexit would make Britain. Fundamental to this independence has been the British need to throw away the EU rule book for its purposes and plans. The EU on the other hand demanded a level playing field through the course of the negotiations to make sure that subsidies, grants and other support from governments do not give businesses an unfair advantage over the other side. The British counter-argument was that the very point of Brexit was to free Britain from playing the trade game with EU rules.
Is Britain now free of them? Remarks from European Commission president Ursula von der Leyen wouldn’t suggest so. She said the EU has recourse to “strong measures that can be taken if one party does not play by the rules.”
That, she emphasised, includes “strong rebalancing mechanisms that are built into a dispute settlement mechanism to review clauses, and overall review after four years to see whether both sides play by the rules, that the level playing field is level indeed.” She added: “From the experience we’ve had we have built-in safeguards that are necessary to make sure that there’s a strong incentive for both sides to stick to what they’ve agreed to.”
Asked about this, Boris Johnson had the following to say:
“There is indeed a clause in the deal which is nothing as damaging as it was, and in my view neutralised, which says that if either country feels that the other one is undercutting or dumping in some way, then subject to arbitration, and provided the measure is proportionate, and I mean independent arbitration, not arbitration by the European Court of Justice, they can if they really choose put tariffs to protect their consumers and their businesses.
And to give you by way of an example the kind of thing that might occur in the UK, we may want to go further on animal welfare standards, and it might be that for instance, we do something on how you rear pigs that would incur extra costs for our pig farmers, and that they might come in from elsewhere from the EU that was at risk of, we might have undercut it, we might under those circumstances consider imposing tariffs. It would be highly unlikely but we might consider it.
That might be subject to arbitration, it would have to be proportionate according to the arbitrator, and under no circumstances would we be in any way be constrained legally or otherwise by anything that the EU did or chose to do themselves.”
Whatever anyone makes of all this, the agreement is being seen and spoken of as somewhat different on either side. The path ahead looks dotted with disputes unless of course the UK blends in with EU requirements—which is just what the EU has wanted and Brexiting Britain has not.
Boris Johnson stopped just short of saying that Britain is getting to eat its cake and have it. The Christmas Eve deal, he said, “resolves a longstanding and very, very difficult problem, and people said you can’t be part of a free trade zone with the EU, being obliged to follow EU laws, we were told we couldn’t have our cake and eat it, and that kind of thing. I’m not going to claim that this is a cake-ist treaty, but it is what the country needs at this time.” Britain, he seemed to suggest, has the advantages now of trading freely with the EU, but is also free from it.
He was more clear on fish. EU boats will continue to fish as at present in British waters for five and a half years before quotas start to be reworked, he said. In the meanwhile “I can assure fish fanatics in this country that we will as a result of this deal be able to catch and eat quite prodigious quantities of extra fish.”
—London Eye is a weekly column by CNBC-TV18’s Sanjay Suri, which gives a peek at business-as-unusual from London and around. Read his columns here
(Edited by : Ajay Vaishnav)