Boris must play hardball in post-Brexit trade negotiations

Even through the fog of disruption and chaos that the coronavirus epidemic has created it is possible to discern a significant change in the trade negotiations that Britain is conducting with the EU. Although several of the principals involved, including Michel Barnier, have temporarily succumbed to the virus and the talks have had successively to be halted or conducted virtually, the sea change that has occurred is largely independent of those circumstances.

The whole climate of the negotiations has changed unrecognisably from the days of Theresa May’s inept interaction with Brussels. In the first place, these are not “Brexit negotiations”. Brexit occurred on 31 January, it belongs now to history. The current talks are simply about the future trade relationship between a sovereign, non-member state – the United Kingdom – and the European Union.

That is hugely important. Gone is the apologetic, deferential mentality that Theresa May and some of her instinctively Remainer colleagues brought to the past three years’ Brexit negotiations. The atmosphere was that of delinquents carpeted in the headmaster’s study: they knew they had transgressed against the code of the cosmopolitan elites and were suitably hangdog about it. Britain’s so-called negotiating stance resembled that of a prisoner seeking early release from a parole board.

Beyond that, the more extravagant Eurocrats such as Donald Tusk and Guy Verhofstadt were sustained in their delusions of somehow cancelling Brexit by a vocal Remainer cadre occupying most of the commanding heights in British public life, especially at Westminster. Last December’s general  election swept away that Greek chorus proclaiming imminent disaster. With the accomplishment of Brexit last January there is no longer a constitutional dimension to Britain’s continuing discourse with Brussels: these are not Brexit negotiations, simply trade talks.

The psychological effect of that transformation is enormous. Britain, a nation that historically played a major geopolitical role in world affairs and was frequently an arbiter of the European balance of power, is back in business. Its government, too, has been strengthened by a large electoral mandate. In the face of this new reality the tired ploys of the Brussels oligarchy, such as declaiming that the United Kingdom is facing 27 other states, look pathetic. There are only two parties to these talks: Britain and the EU.

Ursula von der Leyen and her colleagues, in the current climate, would be unwise to harp on the “27 nations” theme, since it is precisely the loosening of the integrated EU in the face of a financial crisis aggravated by the pandemic that is becoming their biggest problem. Even the most sympathetic and sober observers of the Eurozone car crash are beginning to canvass such hypotheses as should Germany, the most powerful economy, exit the single currency to render it more viable, or is it preferable to ditch the basket cases such as Greece, Italy and Spain?

The EU has never been so discredited as it is today. In recent years, with growing integration, there was a notional concept among member states that if the continent ever faced a major crisis – financial, health, natural disaster – the powerful organs of the EU would dispense assistance and supervise a concerted response, rather than national governments. Today Europe is experiencing just such a crisis and the EU has proved itself wholly impotent, while national governments have reasserted themselves in defending their people’s interests. How many beleaguered Italians or Spaniards are crying: “Reopen the churches, please, so that we can give heartfelt thanks for the great help lent us by the EU”?

Before the pandemic fully hit, when the illusion of normality persisted in the early weeks of this year, the EU demonstrated its divorce from reality by presuming it could conduct the post-Brexit trade negotiations in the same arrogant style in which it had led the pre-Brexit political talks: “status quo” fishing arrangements, a “level playing field” that would keep much of British commercial activity as hobbled as if it had never left the Brussels protection racket, a European court overriding British laws.

UK acquiescence was taken for granted; thereafter, further salients would be driven into British independence until a neat package was tied up, leaving the United Kingdom as a virtual colony of the European Union but, like pre-1776 Americans, with no representation or voting rights. It is slowly beginning to dawn in Brussels that, on Boris Johnson’s and chief negotiator David Frost’s watch, that is not going to happen.

Lately, Barnier et Cie have become strident in denouncing Britain for wasting time in the negotiations. In fact, time-wasting, by such institutionalised devices as sequencing topics for discussion, has long been a favourite EU ploy. At first Brussels thought that Covid-19 meant les rosbifs would have no choice but to extend the transition period into 2021 or 2022. Lately, however, the more acute Eurocrats have begun to worry that Boris Johnson’s repeated exclusion of any extension is so consistent and categoric as to make them wonder if he actually means what he says.

After all, it was only force majeure – no U-turn on his part – that prevented Boris from implementing his pledge to exit the EU on 31 October, 2019; and after that setback he forced a general election which enabled him to implement Brexit on 31 January, just three months late. Now, with no hostile parliament hobbling him, why would he not keep his word about ending transition on 31 December?

None of us knows what is going on in the Prime Minister’s mind. It is doubtful that he has reached a hard-and-fast conclusion. It seems likely that Boris would prefer a negotiated agreement rather than no deal; but unlike his predecessor he will only accept an agreement that respects all Britain’s key interests. As a realist he will know he cannot obtain such a deal from the intransigents in Brussels.

The new element in the equation is the likely economic damage resulting from the pandemic lockdown. Every optimist hopes that somehow Britain will quickly shrug off the effects of weeks of economic paralysis; but since that economic atrophy is a global phenomenon, that is unlikely to happen. Conventional wisdom holds that, with the economy badly damaged, it would be paramount to extend the transition period, to avoid further negative impact.

The evidence of polling suggests that is the current instinct of the public, to play safe by deferring the impact of leaving the EU on WTO terms. That is a very understandable response. But there is an alternative scenario that is gaining in credibility. Supposing the post-lockdown economic situation represented such a lunar landscape that the relatively minor disruption of switching to WTO trade relations with the EU would go almost unnoticed amid the greater devastation?

In that event it could be argued that the best course would be to rid Britain, once for all, of the last nagging problems of Brexit, to bulldoze the debris of EU influence and start anew. Would people who had experienced the loss of loved ones, the destruction of businesses, the reduction of living standards be easily terrified by the prospect of trading with the EU under mutual Most Favoured Nation WTO status, with average tariff rates, as now, of 3 per cent? Britain could also unilaterally lower tariffs for all WTO partners, including EU exports.

In the balmy days when Remainer grumbling was an affordable luxury people could indulge themselves by shrieking at the horror film of Brexit produced by its opponents. Today, the bogey of yesteryear seems as harmless as a discarded zombie dummy in a film studio, compared with the awful reality that has overwhelmed us.

In all events, the only game for Britain to play is hardball.