Fears mount in Whitehall of another Brexit cliff-edge at the end of the year
Boris Johnson will this week urge Ursula von der Leyen, European Commission president, to open intense trade negotiations within weeks, as fears mount in Whitehall that the EU will push the UK against another Brexit cliff-edge at the end of the year.
Ms Von der Leyen last week used an end-of-year interview to suggest that Mr Johnson would need more time to negotiate a trade deal, telling Les Echos she had “serious concerns” about the deadline of December 2020 set by the prime minister.
The new commission president, who will meet Mr Johnson on Wednesday and make her first big Brexit intervention at a speech at the London School of Economics, also suggested that both sides might conclude by the middle of 2020 that “an extension is needed”.
Mr Johnson, who returned to Downing Street from a 12-day Caribbean break on Sunday, will insist that a trade deal can be agreed and ratified in less than a year and that he will not countenance any extension of the standstill transition period, currently due to end on December 31.
“His message will be that we need to crack on with the process,” said one ally of the prime minister, adding that Mr Johnson did not want to be drawn into a pointless argument about whether the transition period was going to be extended.
Mr Johnson has repeatedly insisted that the transition will not run into 2021, suggesting that if a trade deal was not in place then Britain would trade with the EU on World Trade Organization terms, with tariffs, quotas and a host of regulatory checks.
The prime minister and his ministers are bullish about the prospects of a trade deal, but some inside Whitehall share the concerns of Ivan Rogers, Britain’s former EU envoy, that negotiators in Brussels will try to run down the clock.
Sir Ivan said last year that the strategy was seen in Brussels as “a huge open goal”, which would be exploited to the full. “It runs the clock down towards the next cliff edge and confronts a desperate UK prime minister with a binary choice between a highly asymmetrical thin deal on the EU’s terms and ‘no deal’ towards the end of the year,” he added.
Mr Johnson is targeting a deal that removes tariffs and quotas, but that would still leave other customs-related “rules of origin” paperwork and a new regulatory barrier because Mr Johnson wants the UK to diverge from EU rules and standards. It would not cover services.
Ministers are already facing fierce lobbying from industry about the potentially serious disruption this would cause, particularly to industries such as automotive, aerospace and pharmaceuticals which have complex supply chains across Europe.
But ministers privately tell colleagues that the concerns are overblown. “We are expecting the heaviest lobbying from industries that are in secular decline,” one senior minister said. Some in Whitehall say they expect Britain’s car industry to decline, regardless of Brexit.
Mujtaba Rahman, of the Eurasia Group consultancy, said the right to diverge from EU rules was seen as an inviolable principle of Brexit. “Key players in this government see the principle of divergence as Brexit’s big prize,” he said. Paul Everitt, chief executives of ADS, the aerospace industry body, insisted ministers were listening.
“We had a conversation with [cabinet secretary] Michael Gove and he said that if it was in the UK’s interests we would pursue closer regulatory alignment,” he said shortly before Christmas. Mr Johnson wants to banish the “Brexit” word from the Whitehall lexicon after the country leaves the EU on January 31 and to suggest that the trade negotiation with the EU will be just part of a new trading relationship that the UK will forge in the 2020s.
Liz Truss, trade secretary, wants the UK to pursue trade talks with the US in parallel to the negotiations in Brussels, although Mr Johnson is cautious that trying to negotiate simultaneously with two trade partners with widely differing regulatory demands could be too ambitious.