Back to “no deal”?

A lot has happened in the last year. Twelve months ago, Britain was in the middle of an election campaign, which was billed as deciding once and for all the issue of the country’s exit from the European Union. Just the previous month, prime minister Boris Johnson had apparently staved off the threat of a chaotic “no deal” exit by concluding a last-minute withdrawal agreement with the EU.

Johnson went on to win the election comfortably, and Britain officially ceased to be an EU member at the end of January. Yet here we are again, at the threshold of “no deal”, with officials on both sides of the channel preparing for the possibility of logistical chaos.

As I explained a couple of months ago, last year’s withdrawal agreement didn’t settle the question of future trading relations between Britain and the EU. It provided for a transitional period, which expires on 31 December, and put the onus on the parties to reach a new trade agreement to manage their relationship beyond that point. This they have so far failed to do.

Now, with the deadline only five weeks off, matters are getting serious. The EU is not a fast-moving beast; once a deal is signed there is an elaborate process of ratification by its various organs to be gone through, including the need to translate it into 23 different languages. Add in the restrictions imposed by Covid-19, not to mention the Christmas holidays, and the difficulty becomes plain.

After being video-only for the last week, face-to-face talks are expected to resume in London this weekend.* Both sides profess themselves eager to reach agreement and minimise the size of the remaining obstacles. The EU’s chief negotiator, Michel Barnier, who retires in January, is said to be particularly keen to end his career on a high note by clinching a deal. And with other things on their minds, it’s very possible that the EU’s leadership will be giving him more latitude than might otherwise be the case.

But the EU is also conscious of the fact that its negotiating position is considerably stronger than Britain’s. For it, “no deal” would be an inconvenience rather than a disaster. And with this year having already brought so many restrictions on freedom of movement, the imperative of keeping trade flowing has probably lost some of its urgency, at least psychologically.

For Johnson, however, the available room to manoeuvre has become smaller. This month’s United States election deprived him of a key ally; instead, president-elect Joe Biden is particularly interested in the preservation of peace in Ireland. He’s therefore most unlikely to look kindly on Johnson’s threat, in the event of “no deal”, to tear up the provisions of the withdrawal agreement that make special provision for Northern Ireland.

Meanwhile on his other flank, Johnson has antagonised much of his backbench with his (in their eyes) undue slowness in relaxing the Covid-19 restrictions. Since the sort of MPs who think lockdowns are unnecessary are also likely to be among those most hostile to making concessions to Brussels, that’s going to make it harder for him to make the trade-offs that will be needed to avoid the “no deal” outcome.

Like the Republican Party in the US, Britain’s Conservative Party is plagued by an inability – of which Johnson is symptom as much as cause – to take policy questions seriously. Instead, trade policy is framed in terms of culture war (Anglosphere good, Europeans bad) without engaging with the fact that difficult decisions need to be made.

But there’s a difference: Britain is a great deal more dependent on trade than the US is. Donald Trump’s “America First” policy speaks to a long tradition of isolationism and protectionism within (and outside) the Republican Party; its abandonment of free trade may have surprised some pundits, but not anyone who was familiar with its history.

For Britain, retreating behind a tariff wall is not really an option. Although the Conservatives have usually been the more protectionist party, even the most Europhobic among them tend to frame their argument in terms of openness to the rest of the world (often coupled with not entirely unfounded complaints about the protectionist EU). Whatever their views on a particular trade agreement, they are not – yet – willing to market themselves as anti-trade.

So my guess is that, some time in the next week or two, Johnson and the EU will both swallow some of their pride, compromise on a few points and fudge a few others, and produce an agreement that will keep things moving in the new year. But don’t be too surprised if this particular game of Chicken should instead lead them over the cliff.

* I can’t resist drawing attention again to the BBC’s recurring problem with arithmetic. This morning’s report that I just cited says there is “less than six weeks left” to reach agreement. But a week earlier, at the six week mark, it reported that there was “just five weeks remaining”!