Analysis: Uncertainty and imbalance threaten Brexit outcome

Analysis: Uncertainty and imbalance threaten Brexit outcome

Image via Off2rioro Wikimedia Commons

International lawyer and ex-trade negotiator Miriam Gonzalez presented a sobering assessment of the challenges to a senior UK industry audience. Ian Taylor reports

International lawyer and former EU trade negotiator Miriam Gonzalez gave a stark assessment of the task Britain and Brussels face in facilitating Brexit when she addressed a UK industry audience this week.

Gonzalez, a partner at international law firm Dechert, told the annual Travel Matters public affairs conference hosted by travel association Abta: “We have a clock ticking. Things need to be done by a certain time and in a competent manner.”

She held out limited hope of either.

Gonzalez has good insight of the issues and characters on both sides of the negotiating table.

Her husband Nick Clegg was UK deputy prime minister in the coalition government of 2010-15 and paid the price by losing his Parliamentary seat in the June 8 general election.

She has worked as an EU trade negotiator.

Gonzalez told UK travel leaders: “The question I’m asked most [by business clients] is ‘How can you leave me as I am?’ The answer is I can’t, but we can try for the best possible scenario.”

She suggested: “It’s unfair to discuss whether Europe is in a mood to punish [Britain]. The mood I perceive in Brussels is perplexed.

“They didn’t want Brexit. They gave the UK time. They saw the result of the election and it is less clear than before. They are surprised.”

She pointed out: “Europe is not a whole – there are 27 [different] interests.

“There are a series of issues to be dealt with. The general negotiations have not started. Just the preliminary negotiations started this week – on the rights of citizens, on the money – and this will run until October or November.

“No doubt there will be emotional issues, but this is easy. The real issues will come on the bilateral agreements.”

In these discussions, Gonzalez said: “We have two main problems:

“One, the resources are unbalanced. The [UK] administration has been trying to gather people [to handle the negotiations] from anywhere it can.

“I’m also worried about the imbalance at the top level. Michel Barnier, the European chief negotiator for Brexit, is a divisive figure for some but he has been there for years.

“On the other side is David Davis [UK secretary of state for exiting the EU] – the last time he was in Europe it was pre-single market.

“Second, there is a lack of certainty on so many levels. The [UK] prime minister still talks about no single market and no customs union. The UK chancellor says ‘yes’ to the single market and ‘perhaps’ to a customs union.

“[Labour Party shadow chancellor] John McDonnell says no customs union and no single market, but Labour’s shadow secretary for exiting the EU Keir Starmer says ‘perhaps’.

“The risk is that with all the political noise, no one takes concrete decisions.”

Gonzalez said: “The other big risk is that we have a new political dynamic in Westminster. Every party thinks there could be another election. The likelihood for a standstill is much higher than before.”

Prime minister Theresa May’s government agreed a parliamentary deal with the sectarian Northern Ireland Unionist party the DUP this week in order to stay in office.

But no political commentator expects May to survive a full term, and the latest opinion poll put Labour five percentage points ahead of May’s Conservative Party.

Gonzalez suggested a transitional period, “though I prefer to talk about an interim period”, would be best in the circumstances.

She said: “Time is playing against us. Very few people believe you can negotiate this in two years. We should have a safe harbour so that we know we can continue in the same way for however long it takes to negotiate a good agreement that satisfies all.”

Gonzalez warned: “On the trade side, the issue is not really tariffs or liberalisation, it is regulation.

“No matter whether there is a good agreement or bad agreement with the EU, the UK will have lost its regulatory muscle. It will be difficult to have the same regulatory power as today. We need to replace it.”

She held out little hope of a friction-free agreement, saying: “The UK government is thinking about a Canada-style agreement, and that is what the EU is thinking about.

“That model is not a single market. It is not harmonisation. So what happens when we disagree?

“When you take out the European Court of Justice, there is a gap. If we disagree the only option is to retaliate against each other. We all end up a little worse.”

Speaking at the same conference, an industry insider with experience at the top end of the UK civil service, provided no more optimistic a picture.

Deirdre Wells, chief executive of inbound trade association UKinbound, was formerly a senior figure in Whitehall. She suggested: “The civil service will look at the problems and come up with a solution.”

But she warned: “Coming out of the EU is not unlike un-baking a cake. It is ferociously complex. Doing that in the context of a ticking clock and a difficult political situation is very difficult.

“The only way will be to have transitional arrangements. That is what we are arguing very strongly for. We need to speak with one voice as an industry.”

Wells recalled having “a role in generating the single market”, saying: “There were about 100 of us dealing with customs and tax changes.

She said: “The logistical nightmare of coming out of the customs union overshadows any of the possible benefits.”

See more:

EasyJet’s McCall ‘calm’ about impact of Brexit

Airline association ‘confident’ of Brexit deal

Brexit vote fails to dampen holiday spending plans despite rising costs

 

Comments

This is a community-moderated forum.
All post are the individual views of the respective commenter and are not the expressed views of Travel Weekly.
By posting your comments you agree to accept our Terms & Conditions.

More in tour-operators