Time is running short to resolve the Brexit drama

Theatrics and brinkmanship have become a wearyingly familiar part of Brexit. Downing Street’s declaration on Friday that talks on a future trade accord were “over” appears a reprise of Boris Johnson’s tactics in exit talks a year ago: threaten no deal, use that as political cover to make concessions, then sell the final agreement as a triumph for toughness. The prime minister’s claim that the UK is ready to go it alone when the transition period ends in December is surely a bluff. Brussels knows that. The danger is that miscalculations blow up the talks despite both sides’ desire for a deal. That would be worse for the UK — but, on top of a resurgent pandemic, it would damage the EU too.

Both parties share blame for the current impasse. Mr Johnson had raised the stakes by threatening to “move on” if there was no agreement by last Thursday’s EU summit. When, despite recent progress, a deal remained elusive, EU leaders called his bluff. But they fumbled the diplomatic footwork. The summit’s concluding statement implied all concessions must come from the UK. A pledge to intensify talks was removed — apparently to avoid the EU and its lead negotiator, Michel Barnier, appearing to be dancing too much to Mr Johnson’s tune.

The UK premier has not made things easier by adopting a disingenuous narrative: that the EU is unwilling to grant Britain the “Canada-style” trade deal it seeks, and an “Australia-style” arrangement is acceptable. In reality, the UK wants an accord that goes beyond the Canadian model in key areas. Britain’s much closer proximity and higher trade volumes with the EU mean Brussels must take steps to ensure it does not become an unfair offshore competitor. The Australian model is in essence a euphemism for no deal. Unhappy with its current terms, Canberra is even now trying to negotiate an EU free trade agreement.

A year ago, Mr Johnson may have calculated that risking an EU exit without a withdrawal agreement — with all the economic damage that would cause — was politically tenable given his pledge to “get Brexit done”. Today, coronavirus threatens hundreds of thousands of jobs. Despite the prime minister’s narrative, even many Brexit supporters will fail to understand why a trade deal the government once claimed would be the easiest in history could not be done.

Mr Johnson struggles to explain why the arcana of state aid rules or the need to safeguard fisheries — 0.1 per cent of the economy — are sufficient to trigger a rift that would slap hefty EU tariffs on businesses from carmakers to livestock farmers. Tellingly, both pro-Brexit chancellor Rishi Sunak and cabinet office minister Michael Gove are privately pressing him to come to terms.

Failure would be even more of a travesty since the bulk of an accord has already been agreed. A path to resolving remaining sticking points is emerging. After giving some ground on state aid — notably on the idea of an independent regulator — there is scope for the UK to move further and propose an adjudication mechanism for settling disputes. It could also provide cover for the EU to temper demands to preserve the status quo on access to British fishing waters. EU capitals will need to allow Mr Johnson some scope for face-saving. Even France’s tough-talking Emmanuel Macron on Friday hinted at room for compromise on fisheries.

The need to persuade voters they are acting in their best interests means both the UK and EU have reason to hang tough in the talks. With a pandemic raging, however, time is running short for melodrama. The penultimate chapter of the Brexit saga has ended in suspense. Now both sides need to find a resolution in the final act.

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