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Ok, another crunch week (one of many). Here are my latest thoughts on the state of play.
The big issues now are: how long can the talks go on, what impact will the upcoming Finance Bill have, and will an averted Covid rebellion free Boris Johnson's hand in going for a deal.
The big issues now are: how long can the talks go on, what impact will the upcoming Finance Bill have, and will an averted Covid rebellion free Boris Johnson's hand in going for a deal.
1/ If there are new clauses in the Fin Bill which override the NI Protocol + it lands the week when both sides conclude a deal it would put Michel Barnier in a ludicrously difficult position: ie, concluding an agreement with a partner which has twice breached the previous deal
2/ A senior EU diplomat said: "It would make sense for the Commission not to conclude until they've seen the Finance Bill, given the experience we've had with the Internal Market Bill."
3/ The diplomat said a Bill with more clauses breaching the Protocol would short circuit the entire talks process and go down very badly. While the European Commission will want to show they can conclude a deal, an offensive Finance Bill "will not fly in the Council [MS] or EP"
4/ All that assumes a deal can be done + signs are that it may not be possible this week, not least because Johnson is consumed with Covid Tiers + backbench revolts. One theory: with the Tiers vote out of the way the path might be clearer for Johnson to relax his position on LPF
5/ Both sides appear to be some distance apart on LPF, especially the non-regression/evolution clauses, despite briefing from the UK over the weekend that it was now all about fish
6/ Diplomats believe that for London to frame the talks as only about fisheries, then it creates the useful narrative for the UK that the EU is entirely unreasonable in bringing down the talks just because they want to "keep our fish"
7/ Indeed, Michel Barnier and member states had hoped to avoid a situation where fisheries was the last bowling pin standing. As per 10 days ago large parts of the legal text were closed...
8/ ...but things like energy, road haulage and rules of origin were kept open (as well as fish, LPF, governance) to ensure that Barnier's team could link these issues (ie, you want access to our energy market, but deny us access to your fishing grounds)
9/ Even if Boris Johnson does decide he wants to compromise, would it be a swift acceptance of LPF and a suboptimal deal on fisheries? It seems unlikely, as that would seem like surrender. So the talks may go on for some time
10/ The Finance Bill has to appear soon so it may well be that it could come ahead of a Free Trade Agreement breakthrough. If there are new clauses breaching the NI Protocol then that's a problem.
11/ But there is already a choreography of sorts around the Internal Market Bill. Both sides have been working thru the issues that the UK wants movement on and that indirectly relate to the IMB (supermkt food consignments GB-NI, the EU presence in NI, exit summary declarations)
12/ If the Finance Bill gives ministers the powers to override the Protocol provisions on NI remaining in the EU VAT system for goods, or to unilaterally decide what GB-NI goods are at risk of crossing the border and thereby attracting a tariff, then that spells trouble
13/ Again, these are issues being dealt with by the Joint Committee. I'm told that while there are still technical challenges, there are currently no political stand-offs between EU and UK over the most sensitive parts of the NI Protocol
14/ So it may well be that the Finance Bill does not needlessly contain more "offensive" provisions. If it does, then there's an agenda there that may be linked to a No Deal scenario. It's hard to say...
15/ Either way, while separate, the Joint Committee's work is profoundly linked to an FTA deal. Of course, the Protocol comes into effect on January 1 whether there's an FTA or not, but issues like "goods at risk" and state aid rules will be simpler if there is an FTA
ENDS
ENDS
