Day 87 – M. Barnier tells it like it is . . .

Speech by Michel Barnier at the European Economic and Social Committee Plenary Session on 10 June 2020 . . .

This is a long read, but an important one. M. Barnier, in his usual patient way, sets out in French and English a summary of the Withdrawal negotiations so far. I doubt you will see or hear much about this on the BBC or in the newspapers except versions along the lines that the EU is being difficult, or bullying, which it patently is not. My French is not good enough to translate the Part in that language, so I offer you Google Translate’s version which seems pretty accurate to me given that M. Barnier, no doubt, speaks good grammatical French.

So, here is the text as I have transposed it from the original . . .

Mr. President, dear Luca Jahier,

Ladies and Gentlemen, members of the European Economic and Social Committee, I am pleased to participate once again in your plenary session even if, in these particular circumstances, many of you cannot be physically present today. In the midst of this period, where our collective priority is naturally the response to the health, economic and social crisis, I would like to thank you for the continued attention you bring to negotiations with the United Kingdom.

For my part, I continue to consider the European Economic and Social Committee as an important partner in this negotiation. Indeed, Brexit is not just a political story. Brexit has real consequences for unions, businesses, and the people you represent. This is why I have already come to speak to you at three key moments since the United Kingdom’s decision to leave the European Union – the last time on 30 October 2019, when we had just agreed with Boris Johnson the terms of the withdrawal agreement and the Political Declaration setting the framework and parameters for our future relationship.

On the basis of this withdrawal agreement, the United Kingdom left the European Union on January 31. I am sure many of you regret his departure, as I regret. I always thought we were stronger together at 28. But we have to get used to this new format. We want to build a close and complete partnership with the United Kingdom, this great neighbor, friend and ally. And this partnership seems to me even more necessary in the current economic and geopolitical context. We share much more than a common history, starting with values ​​and a commitment to multilateral institutions which we clearly see at the moment the need, faced with the major current challenges such as climate change, the fight against poverty. , security and the fight against terrorism, or mastery of the global financial markets.

And obviously, the current Coronavirus crisis accentuates our collective responsibility – we Europeans and British – to find an agreement and not to add to the economic shock.

My goal is therefore to find an agreement. But not at any cost.

Wanting this partnership does not prevent us from being lucid: the United Kingdom, in addition to being a close political partner, positions itself as a direct economic competitor, at our doorstep. Of course, this competition is welcome – provided it is built on a fair and equitable basis. Finding this balance between ambition and realism with our closest partner and competitor is what is at stake in this negotiation which has occupied us for four and a half months now.

Let us not forget that the United Kingdom is not just any partner. It is in a unique position – unprecedented – due to its geographic proximity to us (32 km between Calais and Dover), and the volume of economic exchanges that we maintain. This is why the partnership that we are going to conclude will not resemble that which we have with other countries, like Canada, South Korea or Japan, which are much more distant, and with which we do not have the same economic relationship.

Ladies and gentlemen,

Since the start of this negotiation, our objective has always been to move forward on all subjects – 11 negotiating tables – in parallel. After four rounds of negotiations, three of which were organized by videoconference, this objective was not achieved. If certain subjects are easier than others, we are faced with the refusal of British negotiators to seriously engage with us in four areas that we consider essential:

The level playing field, that is to say the rules of economic and commercial fair play which are essential to avoid distortions of competition and unfair competitive advantages between us.
Fisheries, for which we want a fair solution, linking access to water and access to markets. And I repeat, there will be no commercial and economic agreement without an agreement on fishing or on the level playing field.
Police and judicial cooperation in criminal matters, since the United Kingdom insists on lowering current standards and deviating from approved data protection mechanisms. It also refuses to enter into an agreement with us on guarantees for the protection of fundamental rights and individual freedoms flowing from the European Convention on Human Rights.
The governance of our future relationship:

o We have made some progress, but not much. We want a single governance framework and not a ditching between separate sectoral agreements. We consider this framework essential to build a close and complete partnership, and thus guarantee the efficiency and transparency of its implementation.

We were also disappointed by the lack of ambition and commitment from the UK in other areas:

I am thinking in particular of foreign policy or defense;
I am also thinking of the fight against money laundering or cybercrime;
Or mobility issues, and the inclusion in our agreement of mechanisms for consulting our parliaments, British and European, and civil society.
We believe this consultation is essential to ensure the democratic legitimacy of our agreement and allow parliamentarians, the social partners and civil society to give their opinion. I know I can count on your support on this point.
None of these points should come as a surprise: they all figured in the Political Declaration agreed between the 27 and Boris Johnson last October.

We are asking for nothing other than compliance with this text in order to be able to succeed in these negotiations.

Ladies and gentlemen,

We are coming to a new key moment in these negotiations, since we are now halfway – a way which is quite short, since the United Kingdom has told us that it will not accept to extend the transition period. This means that, if we take into account the time necessary for ratification, we have less than 5 months – that is until October 31 – to conclude an agreement on our future partnership.

For our part, we have always been open to the possibility of extension, one or two years, provided for in the withdrawal agreement. Given the current situation, our door remains open.
But this requires a joint decision before June 30. And we know that this is not the British position. We must therefore use the time available in the best possible way to move the negotiations forward.

This is why I proposed to the British negotiator, David Frost, to accompany, at the end of June, the rounds of negotiation on all subjects, more restricted meetings to focus on the difficult points. This will naturally not change our commitment to the transparency of these negotiations, in particular vis-à-vis the Member States, the European Parliament, the social partners and civil society, which I will continue to inform regularly.

We hope that this will give new impetus to the negotiations. However, the current bottlenecks are not linked to the method or the timetable, but to the substance and, in particular, to the fact that the United Kingdom is constantly going back on its commitments in the Political Declaration. To remove these bottlenecks, it is essential that everyone understands three fundamental points of the mandate that the 27 member states have set for me for this negotiation with our closest partner and competitor – a mandate which is supported by the European Parliament and which you know well.

1 / First point: an ambitious agreement is only possible within a framework of fair and equitable competition.

In terms of trade, the partnership we offer in the United Kingdom is unprecedented: zero tariffs, zero quotas on all goods, which is a first in the history of the free trade agreements negotiated by the Union.

And this partnership would go far beyond goods. It would cover services and investment, intellectual property and public procurement, energy, transport, fisheries and many other sectors.

But, obviously, such an ambitious economic partnership must be based on a framework of fair and equitable competition, a level playing field. We want free and strong competition. But it must also be fair. We simply cannot give the UK access to our market of 450 million people without precise rules ensuring compliance with the rules of economic and commercial fairplay. For now, the UK is asking us to take their word for it, ensuring that it will never engage in unfair competition, nor seek to lower European standards. He even tells us that he will maintain standards higher than ours.

Yet British negotiators refuse to commit to our agreement – as we agreed in Article 77 of the Political Declaration – to maintain the common high standards applicable in the Union and in the United Kingdom at the end of the transition period for:

competition and state aid,
environmental protection and the fight against climate change,
social and workers’ rights,
tax matters.

Without these guarantees, who tells us that, in the future, no party will have recourse to state aid or derogations from social or environmental standards to gain a competitive advantage?

This would create unfair competition for our businesses.
This would harm workers in both the EU and the UK.
This would weaken consumer protection.
And that would not help us to tackle the major challenges that lie ahead, such as climate change, pollution and rising inequalities.

On this subject, I am ready to find compromises, but the British must accept that the Political Declaration is a precise text, which must now be translated legally. This text, which we negotiated point by point by mutual agreement with Boris Johnson, contains very important points, such as the non-regression clauses for social and environmental rights, commitments on the climate; and the objective of eliminating between us the risk of unjustified competitive advantages.

We are not asking for anything else that what is written politically be translated legally.

Our position is therefore clear: a balanced level playing field agreement and a fishing agreement are an integral part of our future economic partnership.

Ladies and gentlemen,

2/ This brings me to my second point: we cannot accept the UK’s attempts to cherry-pick parts of our Single Market benefits.

During its 47 years of membership, the UK built up a strong position in the EU market in a number of strategic areas: financial services, business and legal services, and also as a regulation and certification hub and a major entry point in the EU single market. In great part, this was made possible by the fact that the UK was an EU Member State, within the Single Market.

As it prepares to leave the Single Market and the Customs Union, we must ask ourselves whether it is really in the EU interest for the UK to retain such a prominent position.

Do we really want to consolidate the UK’s position as a certification hub for the EU, knowing that it already controls some 15%-20% of the EU certification market?
Do we really want to take a risk with rules of origin that would allow the UK to become a manufacturing hub for the EU, by allowing it to assemble materials and goods sourced all over the world, and export them to the Single Market as British goods: tariff- and quota-free?
Do we really want the UK to remain a centre for commercial litigation for the EU, when we could attract these services here?

When considering our options, we need to look beyond the short-term adaptation costs, to our long-term economic interests. Even more so in the context of ensuring Europe’s economic recovery after the Coronavirus crisis. The United Kingdom insists it is asking for nothing more than well-established precedents. But the truth is that, in many areas, it is demanding a lot more than Canada, Japan or any of our other FTA partners! In many areas, it is looking to maintain the benefits of being a Member State. It is looking to “pick and choose” the most attractive elements of the Single Market – without the obligations.

For example, the UK demands:

To maintain almost complete freedom of movement for short-term stays for UK service providers;
To maintain a system for the recognition of professional qualifications that is as complete and broad as the one we have in the European Union;
To have its customs rules and procedures recognised as equivalent, while refusing to commit to the necessary compliance checks and monitoring, or alignment to EU rules where necessary.
To be able to co-decide with the Union on decisions relating to the withdrawal of equivalences for financial services, when they know these are – and must remain – our own, autonomous decisions.

We cannot allow, and we will not allow, this cherry-picking.

For one: the United Kingdom chose to become a third country. It cannot have the best of both worlds!
For another: this is simply not in the overall long-term political and economic interest of the European Union.
And finally, there is no automatic entitlement to benefits given by the EU under previous FTAs.
Every agreement we have – with Canada, South Korea or Japan – has been tailor-made to the partner with which we negotiated.

Ladies and gentlemen,

3/ My third point is that: However good the agreement we reach with the UK, our trade relationship will never be as fluid as it is today.

We need to accept this and prepare for it. The UK has chosen to leave the Single Market, the Customs Union, the VAT and excise duty area,and all the EU’s international agreements. This choice – its choice, not ours – will have automatic – mechanical – consequences as of 1 January 2021, even if we reach a good agreement with the UK.

Businesses in the EU and in the UK must prepare for these changes.

Let me give you some examples of what will happen on 1 January 2021, whatever the outcome of the negotiation:

UK firms will lose the benefit of the financial services passports.
As a third country, the UK will no longer be able to grant marketing authorisations for pharmaceuticals or type-approvals for cars for the EU market.
There will be customs formalities for all goods entering the EU customs territory.

All these are mechanical consequences of leaving the Single Market and the Customs Union. No FTA – no matter how ambitious – can change this.

Therefore, it is the responsibility of each of us, in particular businesses and public administrations, to prepare. I know that your Committee is reflecting on initiatives to raise awareness on the need to prepare, and I am grateful for this. The Commission, too, will be stepping up its readiness actions. It has already published a series of “notices” to help. These should be mandatory reading for every industry stakeholder exposed to the United Kingdom – and we would be grateful if you could share them with your partners.

Ladies and gentlemen,

We want a very ambitious economic partnership, but it must reflect the long-term economic and political interests of the EU. This is not a dogmatic or technocratic position. Simply: we will never compromise on our European values or on our economic and trade interests, to the benefit of the British economy.

Sometimes I hear people in the UK public debate say that the EU has unreasonable positions.

But they are only unreasonable for those who refuse to accept that Brexit has negative consequences for the UK.
They are only unreasonable if your starting point is that the EU should not have the sovereign power to define its own conditions for giving access to its own market.

Our position has been known for years – it was already set out in the European Council guidelines of 2017.

And our negotiation mandate has been carefully elaborated on this basis:

to protect our interests;
to protect our greatest achievements – in particular our Single Market;
and to limit the economic damage that Brexit inflicts on EU businesses and consumers.
And this mandate is sufficiently flexible to find compromises with the UK.

During the past negotiation rounds, the UK must have taken note of the EU’s willingness to search for compromises. What we now need to make progress are clear and concrete signals that the UK, too, is open to work on an agreement. There is no need to change or adjust the EU mandate. We can find the necessary compromises, on the condition that the UK changes its approach and accepts a proper balance of rights, benefits, obligations and legally binding constraints, based on the respect of the agreed Political Declaration of last October.

That declaration is the only valid starting point for the negotiations.

In addition, the UK must demonstrate that it is making real tangible progress on implementing the Withdrawal Agreement in all its dimensions.

In particular on citizens’ rights, where we continue to be extremely vigilant with regard to more vulnerable citizens that have difficulties applying digitally. And on our side, Member States also need to ensure the rights of British nationals, in the same way.
And on the correct and effective implementation of the Protocol on Ireland and Northern Ireland.

In this respect, the UK Command Paper published in May is useful to help focus on what remains to be done. But there are still a lot of questions on which the UK needs to provide detailed answers, if we want to move from aspirations to operation, in line with the Protocol, which is a legally binding text. Together with Maroš Šefčovič, we will discuss these matters this Friday, in the Joint Committee, with the UK. Only a precise and rigorous implementation of the Withdrawal Agreement can create the confidence we need to build our future partnership. Member States made that very clear in the mandate given to the Commission.

As you can see, there are still major hurdles ahead of us. I hope that the High Level Discussions with Prime Minister Johnson that will take place this month will provide a new political impetus to our talks. With determination on both sides and preparation from the business community, I am convinced that we can overcome the difficulties. And build an unprecedented partnership between the EU and the UK for the long term.

The text can be found HERE

About The Author

Born 9 December 1933. Former Royal Air Force person. Retired Church of England Clergyman. Father. Grandfather, and now, Great Grandfather. Citizen of Europe and Fervent Remainer. Thinks that Members of Parliament and especially Ministers of the Crown, who lie to Parliament should be brought before a public tribunal where the evidence can be heard, and examined, and suitable penalties awarded.
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