LONDON (Reuters Breakingviews) - The European Union is offering Boris Johnson only a few crumbs. The 27-nation bloc wants the United Kingdom to abide by its standards in return for a tariff-free trade deal. It’s hard to square with the British prime minister’s goals. Yet Brussels has left some wiggle room - and Johnson has compromised before.
Just two days after the UK formally left the EU, the two sides already seem at loggerheads. Chief negotiator Michel Barnier on Monday set out tough conditions for any potential trade deal, which needs to be agreed before the end of 2020, when the UK will no longer have access to the EU’s single market. In exchange for keeping trade going without tariffs, Brussels wants Britain’s commitment that it will not undercut continental businesses on areas like environmental law and workers’ rights, as well as providing state aid to ailing companies. It also demanded that its fishermen be granted access to UK waters.
At first glance, Johnson will not swallow any of these. Many Brexit supporters see the right to diverge from EU rules as one of the critical benefits of leaving the bloc. In a speech on Monday, Johnson said there was no need to accept EU rules on competition or social protection, arguing that the UK often voluntarily adheres to higher standards anyway. He also said fishing rights should be negotiated annually.
On the face of it, that means London and Brussels are heading for another cliff-edge showdown later this year. The EU’s position does not make a deal impossible, though. While it has insisted the UK abide by existing labour and environmental laws, it does not require the country to continually adapt to new EU rule-making. And, while its stance implies some role for the European Court of Justice, it does not make the UK adopt the legal body’s rulings slavishly. The trade deal would be overseen by a governing body made up of both EU and UK representatives, with the ECJ’s role limited to interpreting EU law. Moreover, the EU has not tied its hands on fishing rights; negotiating the same access as it enjoys today is merely an aim.
Johnson also has reasons to give ground. He has not prepared the country to start dealing with its largest trading partner without an agreement as early as December, which could cost an estimated 600,000 jobs according to a 2016 report by PwC. It would be hard to justify such economic pain for the theoretical right to undermine workers’ rights. Johnson has already backtracked once, when he accepted separate terms for Northern Ireland in the agreement governing the UK’s withdrawal from the EU. Despite the rhetoric, he is likely to do so again.
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.