Brexit weekly: 5 things

June 1, 2018 2:50 pm

With friends like these

The US caught the EU (and the rest of the world) by surprise this week, deciding to waive temporary exemptions and impose a 25% tax on steel and a 10% tax on aluminium imported from the EU. The move had long been touted by President Trump, and was included in his election campaign, but the abruptness of the new tariffs was still a shock to the system on both sides of the Atlantic.

European Commission President Jean-Claude Juncker has described the tariffs as unjustified and not in line with WTO rules, a statement supported by French President Emmanuel Macron. In what may be the start of a trade war, the EU now plans to retaliate by launching legal proceedings against the US and imposing tariffs on American jeans, motorcycles and whiskey (clearly without reverting to stereotypes).

In its foreign policy strategy for a “global Britain,” the UK aimed to get closer to President Donald Trump, who had previously promised the UK would be first in line for a trade deal after it left the EU. The US’s move –  which will also impact 31,000 Britons employed in the steel industry – shows that the President doesn’t mind putting friendships on the line for his America First ethos and that the UK may not be able to rely on the US in terms of a future trading relationship. Remainers may capitalise on this by emphasising that – in this global trade environment – the protection of the EU’s customs union is actually quite valuable.

Ciao from the continent

For a moment it looked like it wasn’t going to happen, and we were heading towards new elections, but the 5Star Movement and the League in Italy have formed a coalition, which will be led by unknown professor Giuseppe Conte. The EU will be happy to hear that Paolo Savona, who was rejected by President Mattarella for the Finance Minister post, will now become Minister of European Affairs. Savona has called the Euro a “German cage” and wants Italy to leave the Eurozone asap.

Some Brexit supporters may rejoice at the idea of an EU founding member taking a more sceptical approach to the European project, particularly in light of the strong Franco-German views on the future of the EU without the UK. However, while division within the EU makes the bloc as a whole weaker, negotiating with a divided partner – the EU will confirm – is not easy and might further prolong EU withdrawal discussions, which may already go beyond the October 2018 deadline. The June European Council Summit will probably give a good idea of what position Italy decides to take on Brexit.

The man with a plan

Brexit Secretary David Davis has a new plan to solve the Irish border impasse. The “Max Fac 2” scheme involves creating a joint EU/UK status for Northern Ireland and setting up a 10-mile “buffer zone” around the border to aid local traders and farmers. Businesses would have to comply with both EU and British standards to ensure they can trade freely with both sides – eliminating the need for a hard border, which is one of the EU’s key demands.

Mr Davis hopes that this plan will unite the Brexit War Cabinet, which has been split over what customs relationship the UK should have with the EU. Two options were on the table – “Max Fac 1”, a technology-based solution and the “customs partnership,” which sources say is going nowhere. While Davis’ plan might be a good compromise, for others in government there is one sticking point. The DUP, which props up the government, has ruled out having a different status for Northern Ireland to the rest of the UK. Some persuading would still be required at home before facing the challenge of convincing the EU of the plan.

Wales steps up

We’re used to hearing from Scotland, but now a number of Welsh MPs have signed a letter calling on the Government to hold a referendum on the final Brexit deal. The letter, coordinated by Wales For Europe, was signed by 31 senior Welsh politicians, including many from the Labour Party.

One of the signatories came from Owen Smith, who was fired as Shadow Northern Ireland Secretary by Labour leader Jeremy Corbyn for calling for another referendum, which is against party lines. Shadow parliamentary private secretaries Anna McMorrin and Tonia Antoniazzi – who are similarly expected to follow party policy – also added their name to the letter. This again poses questions over Labour’s Brexit position, with many in the Party calling for a softer stance to potentially appeal more to younger voters. With Labour also having a significant leave-supporting base, Mr Corbyn’s challenge to unite his party increases.

Dexit is coming

No, Denmark is not leaving the EU (at least not yet). It has been suggested that the Department for Exiting the EU (DExEU) will be folded up and become part of a beefed up Foreign Office after 29 March 2019. As a government official explains, “you can’t have a Department for Exiting the European Union after you’ve exited the European Union.” This could mark the start of an internal governmental battle over who will be responsible for negotiations with the EU after the UK leaves.

Indeed, the bulk of negotiations concerning the future relationship with the EU will take place after 29 March 2019. The question now is who will be leading these discussions from the UK side. EU negotiators will not have forgotten Foreign Secretary Boris Johnson’s comment that the EU could “go whistle” if it expects the UK to pay a divorce bill (which it now will), nor his accusation that EU leaders are looking to turn the EU into a super state. Perhaps Johnson is not the best placed to represent the UK in these discussions, so will David Davis or Liam Fox then get that honour? We’ll have to wait and see.

June 1, 2018 2:50 pm

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