On the 7th February 2017, The Royal Commonwealth Society held the second in a series of High Commissioners' Round Tables on the topic of Brexit.
The Royal Commonwealth Society convened the latest in its series of Brexit Roundtables on the 7th February 2017, kindly chaired by the New Zealand High Commissioner, Sir Lockwood Smith, and hosted at New Zealand House. The guest speaker was Sir Simon Fraser, former Permanent Under-Secretary at the FCO and Chef de Cabinet for EU Trade Commissioner, Peter Mandelson. Sir Simon's comments are recorded below.
Things are moving fast and Article 50 is likely to be triggered on time in mid-March. HMG want a clean break, with no membership of the Single Market, but maybe some ad hoc partial customs agreements in some sectors and a Free Trade Agreement. It has decided to prioritise the political factors over the economic. The strategic context for all this has been changed by the election of President Trump; and the domestic context should be seen against the background of Scotland and Northern Ireland moving up the agenda.
The Brexit Negotiation Process
HMG needs to achieve two things – a divorce (under Art 50), and an agreement on the future UK/EU relationship. It is unlikely the latter can be sorted in the two years allowed for the former, which suggests a long period of transition after the actual Brexit moment in March 2019. The PM's speech of 17 January set out the Government's aims very clearly – the subsequent White Paper stuck to that framework, but added interesting detail. The details of the divorce are likely to cause some early crunch points, notably on financial issues.
The PM's reference to "progressive implementation of the new arrangements" and the Great Repeal Bill (which allows piecemeal repeal of EU law over an infinitely elastic period following Brexit) implicitly suggest that HMG accept there will be a long transition. For their part the EU are not in a hurry – they are adopting a stance of disciplined non-engagement with the UK, not least as the thirty parties involved (27 Member States, the Commission, the Council of Ministers and the Parliament) all have different interests. The EU welcomed the clarity in the 17 January speech, but disliked the threat to walk away and lower UK tax rates to attract business to the UK. The Commission will lead the negotiations with a mandate from the Council and Member States but the Parliament needs to approve the deal and could refer it to the ECJ. There has been little visible activity in the Commission so far, with Barnier's small task force (40 people) clearly not the full negotiating team which will run to hundreds across all the sectors. The EU's key priorities are (1) to preserve EU unity and (2) to ensure the UK gets no special deal. Elections in France, Germany, Italy and the Netherlands (inter alia) complicate matters during 2017.
The Final Deal
It is too soon to predict the details of the final outcome, but things are moving faster than expected. Sir Simon said that there is a significant possibility that the UK leaves without any deal. In his view the shape of a deal is likely to be closer to the one with Ukraine that the one with Norway or Switzerland. The fundamental problem was that the mutual economic interest in a sensible deal was likely to be trumped by the hard politics on both sides. And the overall deal would likely cover security, defence, borders, CT, foreign and defence co-operation as well as economic issues such as external trade policy.
Implications for the Commonwealth
It is important for the Commonwealth to get its act together quickly, not waiting for CHOGM. (The meeting of Trade Ministers next month will be a useful opportunity to take things forward). And regional groupings need to establish and make clear their priorities (e.g. CARICOM should be working on what it wants to replace the EPAs with the UK after Brexit).
Sir Simon's remarks were followed by a discussion and Q&A session. Read the full report of the round table.