Brexit negotiations: have we reached the end of the road or is this just political theatre?

By Gareth Jones

With three weeks to go until the end of the transition period, future-relationship negotiations between the UK and EU appeared to reach their crunch point last night with a meeting over dinner in Brussels between Boris Johnson and European Commission president Ursula von der Leyen. The meeting, however, ended in deadlock, with a subsequent statement from Number 10 noting that “the situation remained very difficult and there were still major differences between the two sides.” Both sides have agreed that talks will continue until Sunday, where a ‘firm decision’ should be taken.

The reported policy differences between the two sides are essentially on the same issues they have been for months – fishing rights and the ‘level playing field’. Yesterday, the briefings from the UK government, repeated throughout the media, concerned a specific issue with the level playing field provisions that were reported to be a ‘fundamental stumbling block’ to agreeing a free trade deal. 

Level playing field provisions are a key a concern for the EU. They do not ensure full regulatory alignment, but they do provide a form of guarantee that one side does not gain a significant competitive advantage over the other by undercutting its rules on issues such as workers' rights, state subsidies, the environment and climate change. In negotiations to date, both sides have agreed not to regress on current standards. It is the issue of future standards, however, that has proved to be a trickier to resolve. 

This issue goes to the heart of the two sides key objectives and concerns (and is most likely the priority issue for both sides, rather than fish). For the UK government, who have been clear that it prioritises its issues of independence and sovereignty above other concerns, the ability to diverge on future regulatory standards is considered one of the main ‘wins’ of its post-Brexit future. In their view, this regulatory freedom will allow the UK to be more competitive and more prosperous in future, especially in the industries of tomorrow (thereby counteracting the economic damage caused by increased barriers to trade with the continent). On the EU side, allowing itself to be undercut on its goods and services by a neighbour on its doorstep adopting lower standards is one of its chief fears – potentially rendering its own exports uncompetitive, but also undermining its own standards on workers’ rights and the environment. 

Various options on a mechanism to address the issue have been discussed since the summer – includes proposals on "dynamic alignment" and a “ratchet clause”. Some observers have suggested that a ‘landing zone’ – a compromise that is mutually acceptable – does exist on this issue, it just requires political skill and movement from both sides. It would certainly appear to be in everyone’s interest for both sides to agree a deal. The current logic of the UK government’s argument for not agreeing a deal (that it is not prepared to accept a situation whereby the EU can impose future retaliatory tariffs on the UK – but accepting those very tariffs now under a no deal scenario) does not make a huge amount of sense at first glance. 

However, it should be emphasised that the policy objectives are only half the story in these negotiations. What is really driving events in these final days is raw politics – how these negotiations are being viewed by the two sides internal audiences. Last night’s dinner, the downbeat statements and the coming days of frantic last-minute negotiations are all, to some degree, political theatre – although it is difficult to know for sure for what exact purpose. There are two entirely plausible scenarios.  

The first is that both sides have every intention of agreeing a deal and making the necessary moves to get one – but a ‘negotiation breakdown’ has to be staged in order for them to prove that “this is the best we can get” and sell the final package to the two sides respective audiences. For Boris Johnson – this means the ERG and the Brexit hardliners in his own party. For the Commission, this means the Council. The events over the past few days are indeed consistent with a staged ‘breakdown’. Both audiences now have to be convinced that the final outcome will represent a ‘win’ for them.

The other scenario, of course, is that ‘no deal’ has largely already be determined by both sides. They are not going to budge from their position and do not feel they can make the political concessions to get a deal. However, both sides continue to engage in high level political talks to ensure they are not seen as the ones walking away (and therefore the ones primarily blamed for the consequences) and to maintain a degree of cordiality with each other. 

Presumably we will find out, soon enough, which of these scenarios is true – maybe by Sunday? Or maybe the deadline will be extended again? Some have suggested that negotiations could run deep into December – but it is very, very late in the day.