The obstacles to a Brexit deal are not what you think

Negotiations on the future UK-EU relationship are finally intensifying. In London it is reported that Michael Gove and Rishi Sunak, favouring a deal even at the cost of signing up to the EU’s conditions, are up against Boris Johnson and David Frost, who are comfortable without one and fearful of cries of betrayal from Brexit hardliners. In Brussels, there are discussions among EU member states about the extent to which the UK can be trusted to stick by a trade deal, or whether strict enforcement rules are required. In neither capital city, though, can it be said that a broad settled consensus exists as to how the future relationship should look.

In the more public negotiation, UK and EU teams continue working through the details of formal legal text for a free-trade deal, hoping to find some agreement on the issues that have bedevilled talks since day one. After many weeks of such talks, hopes are not high of an imminent breakthrough.

But the true barrier to a deal isn’t really issues like fishing or the level playing field; those are rather the symbols of genuinely deep uncertainty on both sides as to what the future relationship should look like. Without that clarity, and some degree of shared vision, any relationship is going to look shaky.

We focus on what is happening between the two parties when the discussion within them is what really matters for the outcome. The deal, after all, can only take place in the space between the red lines of the two parties, dictated by their respective visions. So what about when neither side is quite certain what it wants? On the EU side, there is no existing model which it thinks works for the UK. Neighbourhood policy is aimed at smaller and weaker countries. Deep integration is for potential future members (except for states in the European Economic Area, which reject full membership but still follow EU rules). Free-trade agreements are for distant countries, small and large.

There is an awkward compromise relationship being constructed for the UK, consisting of parts of all of these. It isn’t comfortable, not least as there is a fear of the UK undermining the single market by deregulating, hence the insistence on a level playing field. The fear is that the UK is being given too much, and offering too little, in the absence of an appropriate off-the-shelf model.

We know there is also no settled UK view on the future relationship. At least half of the population now views leaving as a mistake, but the government elected only last December is happy to go with no deal. Again, none of the models make sense. Too distant a relationship, and the trade barriers will be too high for the UK to remain a part of European-wide manufacturing supply chains, at cost to some Northern towns in particular. Closer, and we are rule takers without a say, the phrase “Take Back Control” hollow in meaning. Added to this there is a deep-seated lack of trust in an EU thought to want to trap us in some way.

It gets worse. In continuing to deny the major impact on Northern Ireland and the need for a border somewhere, and on Scotland, where rejoining the EU is part of an independence campaign that looks to have at least 50 per cent support, the UK is not even being honest with itself.

What we have in summary is a confused, low-trust, low-vision UK-EU relationship. This is not in any way the usual basis for a trade agreement, where both sides agree to reciprocally grant preferential access to their markets because there is some sort of shared understanding of what the parties should do together. The two sides here are only talking for the fear of no agreement being even worse.

It seems improbable that a post-divorce arrangement arising from fear, lack of trust and the absence of better ideas can be sustainable for any length of time, whether there is a deal or not. From the end of the transition period all trade irritations—and there will be many, from lorry queues to restrictions on the rights of individuals to work—will be ascribed to the inadequacies of the deal or the intransigence of the other side. Businesses will want barriers removed or regulations mirrored. Those who oppose closer ties will demand tough conditions.

At least if there is a deal there will be some kind of structure to manage relations. Without one, the formerly regular two-way schedule of official and ministerial visits will slow to a trickle, misunderstandings growing as relations weaken.

Those who study the EU’s external relationships have long suspected that the UK is destined to be stuck in a permanent negotiation over everything from fishing rights to product regulations, financial services to professional qualifications, and above all goods crossing the borders. Right now, though, that might look like a blessing, for keeping contact will give both sides a chance to think in more detail about what they actually want, and revise any arrangements entered into in haste.

Ultimately, we’re neighbours, and will have need to talk and to trade. So while both sides work out what they actually want—which could take a while—we better accept that today’s negotiations are just another stage in the likely long-running saga of UK-EU relations.