Political declaration settles nothing and just postpones future punch ups

The UK and the EU have agreed a draft political declaration that pledges an “ambitious, broad, deep and flexible partnership.” The draft is due to be approved at a summit on Sunday. Donald Tusk, the European Council president, said the draft declaration had “been agreed at negotiators” level and agreed in principle at political level, subject to the endorsement of EU leaders. Now, the divorce negotiations are truly over.

The political declaration settles nothing. It binds nobody. It does not give answers on what the future relationship will be, it merely sets out the choices and those choices remain the same as they have always been. This is a statement of intent which aims to give guidance on the aims for the future relationship and provides a broad framework for negotiation.

The declaration opens with warm words, which show the central aim in the negotiations will be to achieve a close and comprehensive economic and political partnership:

3. In that spirit, this declaration establishes the parameters of an ambitious, broad, deep and flexible partnership across trade and economic cooperation, law enforcement and criminal justice, foreign policy, security and defence and wider areas of cooperation.

But this all heavily caveated by the usual red lines:

4. The future relationship will be based on a balance of rights and obligations, taking into account the principles of each Party. This balance must ensure the autonomy of the Union’s decision making and be consistent with the Union’s principles, in particular with respect to the integrity of the Single Market and the Customs Union and the indivisibility of the four freedoms.

These red lines are going to cause persistent trouble during the next round of negotiations. The depth of the partnership will depend on the balance between the UK wanting autonomy and its willingness to accept obligations and shared sovereignty. This is an entirely unresolved debate in the UK which means we are set for further political ruptures which will hinder the government in negotiations.

What is abundantly clear is that Theresa May’s only true red line is the pledge to end reciprocal rights of free movement between for citizens of the UK and the EU. The whole deal is driven by this desire. The section on mobility is one section where Theresa May has really got what she wanted. Free movement will end unless the government changes policy on this in the future.

Both sides “aim to provide” visa-free travel, but only for “short term visits” – meaning visas will return for non-short term travel between Europe and the UK. The PM will point to this as a major win, while many others will look on this with despair and seek a change of course in the future. Expect the debate about this to intensify.

The parts of the declaration that refer to the economic partnership and trade are designed to please several different parties and leave the possibilities very open. There is a pledge to “develop an ambitious, wide-ranging and balanced economic partnership” which will be composed of a “free trade area as well as wider sectoral cooperation” which will be “underpinned by provisions ensuring a level playing field for open and fair competition.”

There is a clear vision here of deep regulatory cooperation and continued participation in EU agencies, but this is all heavily caveated.

The UK must respect “the integrity of the Union’s Single Market and the Customs Union” and the EU must respect “the United Kingdom’s internal market” and recognise the development of the UK’s independent trade policy. There is clear recognition here of the possibility of the UK seeking regulatory autonomy, plenty here designed to tantalise hard Brexiteers.

Significantly however, there is no reference to “frictionless trade” and it is made clear that divergence will lead to increased regulatory and customs checks. Paragraph 28 is a key part of the document:

28. The Parties envisage that the extent of the United Kingdom’s commitments on customs and regulatory cooperation, including with regard to alignment of rules, would be taken into account in the application of related checks and controls, considering this as a factor in reducing risk. This, combined with the use of all available facilitative arrangements as described above, can lead to a spectrum of different outcomes for administrative processes as well as checks and controls, and note in this context their wish to be as ambitious as possible, while respecting the integrity of their respective markets and legal orders.

Essentially, this means that the UK is free to diverge in its regulations but this will have implications for the frequency of border checks on UK goods. The ambiguity here hints at the political battles to come in the UK when we get down to the real negotiations.

On services, there is some talk of equivalence but overall this whole section is very weak:

38. Noting that both Parties will have equivalence frameworks in place that allow them to declare a third country’s regulatory and supervisory regimes equivalent for relevant purposes, the Parties should start assessing equivalence with respect to each other under these frameworks as soon as possible after the United Kingdom’s withdrawal from the Union.

It hints more at the kind of weak provisions found in Free Trade Agreements, rather than anything more comprehensive like the government was seeking. Unless this is further developed, we risk a hit to our services sector.

Overall, there has been an attempt here to retain enough ambiguity to allow a change in direction later, and an attempt to placate different parties. The EU has seemingly tried reasonably hard to allow the UK government some points to sell, like lip service to the possibility of using technology to facilitate the Irish border problem, and floating the possibility of the UK diverging in its regulatory regime.

Reading the declaration it would seem we’re heading for a broad Association Agreement that encompasses wide-ranging cooperation that goes far beyond the EU’s normal relations with third countries. On trade however, as it states that ‘”the parties will form separate markets and distinct legal orders” the trade agreement will look more like Canada plus than the EEA.

However, the choices essentially remain open and the issue of Northern Ireland remains. The UK can have a Free Trade Agreement like Canada or South Korea, with add ons, but it will mean Northern Ireland being given ‘special status’ with extra ties to the EU. Alternatively, it can change policy and drop red lines and opt to include participation in the Single Market in the Association Agreement, accepting the four freedoms, including free movement of people.

What does it all mean? To coin a phrase once favoured byTheresa May: nothing has changed.

The debate, essentially, remains the same as before. Worryingly, this doesn’t bode well for the next stage of negotiations. If we had a sensible, strong and stable government with a decent leader and a majority in the Commons, we could expect UK negotiators to be given a mandate and a set of priorities to pursue and then given a degree of freedom to negotiate the future partnership.

What is more likely to happen is that EU will be ruthless in pursuing its aims, going methodically through its detailed processes, while British ministers and MPs fight like ferrets in a sack. This isn’t over, not by a long shot.