Syed Kamall is Chairman of the European Conservatives and Reformists Group and is an MEP for London.
According to the European Commission it took the EU27’s Brexit ministers just two minutes on Monday to rubber stamp the terms for a transition deal with the UK.
This was revealed in a tweet by Michel Barnier’s deputy Sabine Weyand, who clearly intended to hammer home to her 19,397 followers (including almost every journalist in Brussels) the message that member states are united behind her boss as we enter the crucial second phase of Brexit negotiations to decide the future UK/EU relationship.
It is a point that is being repeated at every opportunity. But while ministers from a number of EU countries tell me that they will respect this EU unity in public, some have expressed concerns over the European Commission’s opening gambit that there can be no compromise on single market access.
These ministers understand that their own economies will suffer if new barriers to trade with Britain are erected post-Brexit and are pressing hard behind the scenes for the EU to engage constructively with the world’s fifth largest economy. Some are also beginning to say so publicly, hence the flurry of “we stand united” utterances from Brussels as the Commission tries to cover up the emerging cracks in its negotiating position.
To illustrate these tensions, consider some of the comments made by senior EU27 politicians during January.
At the beginning of the month Carlo Calenda, the Italian Economic Development Minister, said that, in the Brexit talks, a “Canada plus plus plus trade deal will be the minimum that we need to achieve.” Speaking in Davos, his Prime Minister, Paolo Gentiloni, directly contradicted Michel Barnier by stating that any agreement with Britain must include financial services. Exluding them would be “totally unrealistic”, he insisted.
Xavier Bettel, Prime Minister of Luxembourg, called for a deal that does not punish UK citizens or the City of London. He told Bloomberg: “I think that we should refrain from an orthodox or binary thinking. My top priority would be to limit the negative impact for both sides. Pragmatism will be needed in these negotiations.”
Finland is also becoming increasingly worried about the economic impact of Britain’s withdrawal, both in terms of lost trade and pressure for it to increase contributions to the EU budget. Sampo Terho, Europe Minister, revealed last week that Finland would be pushing for a Brexit deal that allowed trade to be “as smooth as possible” and hoped that the UK would continue to be “a close friend.” Kristian Jensen, the Danish Finance Minister, stated his country’s priority was “to have a good relationship and a free flow of products, primarily on agriculture and food.”
Even EU loyalist Emmanuel Macron has said that what is likely to be on offer to the UK is a bespoke deal, “something between full access and a trade agreement.”
Then there is the survey conducted by the EU’s Committee of the Regions which examines the localised effects of Brexit across the bloc. In its response the German city of Bremen points out that the UK is its third-largest trade partner, while Britain is the number two destination for exports from Murcia in south eastern Spain, including 75 per cent of all the region’s agri-food exports. Flanders, in Belgium, puts the value of its UK exports at €27.7 billion and estimates a hard Brexit would lead to the loss of 42,000 Flemish jobs, falling to 10,000 if a trade deal is struck.
What all this tells us is that the UK’s negotiators must not be cowed by the Commission’s talk of unity and the impossibility of any compromise on market access. They need to be clear about the relationship they want to see by Brexit day in 2019 and the end of the implementation period in 2021, while pushing for a comprehensive trade deal, including services, that will benefit businesses in Liege and Copenhagen just as much as those in London and Coventry.
The EU may talk tough and the UK may be tempted to respond in a similar manner, but now is the time for pragmatism on both sides so that EU and UK companies can plan for a successful future.