Updated: Jun 20, 2020
A personal commentary by Arne Mielken
The European Parliament released its report (download the report, access the press release and video of the press conference*) on the EU-UK Future Partnership. One thing is clear: Without a Level Playing Field and a deal in fisheries, there will be NO DEAL.
The European Parliament (EP) is the voice of the people of Europe. The 700+ Members represent some 450 million citizens. In other words, their opinion matters! The report was adopted by 572 votes in favour, 34 against and 91 abstentions,
As the voice of the people, the EP is also a co-legislator in the European Union. This means that WITHOUT a positive vote of the EP on the future EU-UK Free Trade Agreement, there will be NO DEAL.
This week, the EP made three things crystal clear:
No Swiss-like collection of mini-agreements.
The Level Playing Field is a MUST! Do you hear me? A MUST!
No ambitious deal on fisheries = no overall deal! Even LUXEMBOURG (!) agrees :-)
The longer the UK refuses to engage on this and continues to misrepresent the EU position ("They force us to keep EU law" - RUBBISH), the more time we lose and the more likely a no-deal becomes.
Let's explore a little, why the EU insists on this. If you think about it, it's not rocket science:
A SWISS NIGHTMARE - #NEVERAGAIN
A very basic Free Trade Agreement between the EU and CH was signed in 1972. As a consequence of the rejection of the EEA membership in 1992, Switzerland and the EU agreed on a package of seven sectoral agreements signed in 1999 (known in Switzerland as "Bilaterals I"). These include:
free movement of persons,
technical trade barriers,
air and land transport.
In addition, a scientific research agreement fully associated Switzerland into the EU's framework research programmes.
So there were 6 separate agreements which all have to be managed separately.
A further set of sectoral agreements was signed in 2004 (known as "Bilaterals II"), covering, inter alias,
participation in Schengen and Dublin,
agreements on taxation of savings,
processed agricultural products,
participation in the EU Media Programme and the
In 2010 an agreement was signed on Swiss participation in EU education, professional training and youth programmes.
In overall, more than 100 bilateral agreements currently exist between the EU and Switzerland. These bilateral agreements between the EU and Switzerland are currently managed through approximately 20 joint committees.
And remember - Switzerland is small!
What would this mean for the EU-UK? The EU would get bogged down in administration and there would be NO end to it.
So, the only option for the EU is to go for ONE deal with a single administration framework.
The EP's text emphasises that EPs consent to any future trade agreement with the UK is conditional on the British government agreeing to a level playing field (common rules and standards) in the area of, among others, environmental protection, labour standards, and state aid.
NO LEVEL PLAYING FIELD - NO CONSENT! Hello, UK, is anybody there? Do you listen?
The EP writes: "This is a necessity due to the UK's geographical proximity, level of interconnectedness and already high level of existing alignment and interdependence with EU rules".
We need to talk about two aspects in particular:
Why does it matter so much that the EU will never give it up?
Does this mean the UK must adhere to EU laws? Will the UK be obliged o take over relevant EU legislation?
I WILL NEVER GIVE IT UP
Let's be real.
The EU is worried.
EU businesses are worried.
The UK is in the EU's doorstep. Literally, it is some 30 miles (ca. 48 km) from France and it shares a border with Ireland.
The UK already benefits from English as a first language (the language of the world) and if the business environment is significantly easier to deal with, then businesses may choose the UK to set up rather than in the EU.
Why are Google or Facebook in Ireland? Why are the banks and Amazon in Luxembourg? Taxation
Why are businesses setting up in Dubai? No income tax, low company tax.
The OECD says "Competition in the global market needs to be fair":
A level playing field in global trade means that all countries and firms compete on an equal footing to offer consumers everywhere the widest possible choice and the best value for money.
Organisation for Economic Co-operation and Development (OECD)
Just imagine the EU giving in on level-playing field AND offering zero tariffs and zero quotas. IT IS MAD and would be selling out EU businesses.
What if the UK undercut European businesses by providing greater subsidies to British industry – or introducing a more relaxed competition regime. And what about corporation tax? If the UK cuts the low rate further, the UK could outperform the EU as an attractive place to base business. And if the UK would be able to trade with the EU on preferential terms, what incentives would a global business have to set up in the EU.
Then, think about social and environmental protection for just a second. EU businesses have HIGH costs to grant workers much needed social protection and strong unions engage in costly wage negotiations. Doing business in Europe is already expensive (in return for high-quality labour). Now add environmental, health and safety and - new - climate change costs. In other words, a business needs to make a lot of profit, just to pay for all these.
Would any EU business accept that UK businesses can compete with them not having to adhere to the same standards and rules? Wouldn't this give UK-based business a competitive edge – or force the EU to reduce its own standards to be able to compete? Any new business might very well end up in the UK again! Especially, if there are no border taxes.
There are many more reasons as to why the EU will never give up on a level playing field including the fear of US chlorinated chicken.
If you want to summarize this, it comes down to two elements:
UK is in the EU's neighbourhood
The EU and the UK trade almost everything imaginable, so there is a high interdependence.
Because the UK is so close to the EU, a new business could set up in the UK and would face only low costs to get their goods onto the EU market, too.
The EP said that the "level playing field guarantees are a crucial element of any agreement with the UK, as this is not dogmatism or ideology from the EU's side but a prerequisite to establishing an ambitious and balanced partnership with the UK and preserving the competitiveness of the internal market and EU companies, as well as maintaining and developing in the future high levels of social, environmental and consumer protection".
Without that, no deal!
Does this mean the UK must adhere to EU laws? Will the UK be obliged o take over relevant EU legislation?
PLEASE STOP THE MISINFORMATION. You are deliberately distorting the truth. With a trade deal, the UK will not be forced to adopt EU law. Not dropping below mutually agreed standards is NOT the same as having EU law forced upon you.
From 1 January 2021, NO - I repeat NO - EU law is applicable in the UK. Basta. Finished. Done. Dusted. Get it? Deal or No Deal!
Only international agreements exist then and standards.
ITS NOT LAW, ITS JUST STANDARDS, STUPID
International standards are technical standards developed by international organizations (intergovernmental organizations), such as Codex Alimentarius in food, the World Health Organization. Or the Paris Agreement on Climate Change. All global things the EU and the UK have agreed to.
Every businessman get's this:
"Hey, can you make sure you meet ISO 9001:2015?" - "Sure, no problem".
DOES NOT MEAN
"Hey, can you adopt my Italian law on quality?" - "Scusi?"
The EU is only asking the UK to agree not to drop below STANDARDS.
That is NOT saying: "UK IS OBLIGED TO ADOPT EU LAW" - No Way, Jose!
In fact, the UK can and must have its own laws. No EU law at all will be applicable. Get it in your head.
FISHERIES: "JUST KEEP SWIMMING"
"No comprehensive agreement can be concluded between the EU and the UK if it does not include a complete, balanced and long-term agreement on fisheries and fisheries-related matters"
European Parliament Resolution
I am still impressed with Christophe HANSEN from Luxembourg (we also share a birthday, so I like him anyway for that).
He was totally in favour of a strong fisheries' agreement with the UK, as a landlocked country and was defending the EU's position.
Why on earth does Luxembourg care about UK fish?
If you understand that, you understand the EU's entire position on the deal. Let's dissect (not the fish).
Solidarity - The EP and the EU Commission and the EU 27 are more united than ever on the UK-EU partnership position. If you need proof, look at Luxembourg and fish.
If you do not get that it's not only about catching fish but also processing and eating it, you do not understand a) fishing b) the EU Single Market. Luxembourg processes fish for consumption and benefits from the CFP.
It's a principle thing and - yes - some ideology here, too. The poor fishermen. The war on the high seas for fish. The French fishers....we have to protect them. I get it.
Christophe, in the press conference, presenting the report, also made a great comment on history: The UK is unhappy and says it cannot fish enough for itself because it sold its fishing quotas to the other EU Member States in the 90s ("Quota hopping"). And a report from the Independent confirms this "Foreign vessels are legally taking a large chunk of the UK's fishing quota. But it is our own government's double-think and double-talk that is to blame rather than the minefield of EU rules". Again, not Brussels fault - but the EU gets the blame anyway.
So, it's a fishy affair - but without a deal of fish that largely replicates the status quo for the EU - there is NO overall deal!
We need to get real - the EU cannot move on level playing field and fish! It's just not realistic. The EU-27 won't budge, the EP will not approve any other deal. Sticking to the "cherry cake - have it and eat it" position can never succeed. If the UK can finally accept this, we can move on.
Get a Deal or Stop Wasting Time. EU business - get ready for NO DEAL once again, cause this fish - more and more - stinks!
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