Let's not pretend the UK isn't after a special trade deal. In fact, it's good that it is

Opinion piece (The Telegraph)
20 May 2020

Yesterday, the UK government published its draft proposal for a future free trade agreement with the EU. It was accompanied by a withering letter from Britain’s chief negotiator, David Frost, to his counterpart Michel Barnier, accusing the EU of treating the UK unfairly and asking for more from Britain than it did other trade agreement partners such as Canada and Japan.

In essence, Frost is arguing that the UK only wants a basic free trade agreement with the EU, and as such EU demands on fishing rights, binding rules to guard against backsliding on environment and labour commitments, and to continue applying EU state aid rules are unwarranted.

But while the UK’s draft treaty is predominantly a smorgasbord of provisions literally copy-and-pasted from other EU trade agreements, it is not true to say that the UK isn’t asking for special treatment in certain areas.

On issues such as the EU continuing to recognise professional qualifications granted in Britain, allowing foreign inputs to count towards the trade agreement’s local content requirements (so-called rules of origin) and including special provisions for roll-on-roll-off freight, the UK is asking for more from the EU than it normally offers in its trade agreements.

This is a good thing. These special requests are in the UK’s interest and justifiable. The trade relationship with the EU is the UK’s most economically significant, bar none, and as such any trade agreement should be ambitious and aim to allow trade to flow as freely as is politically possible.

In this context, the narrative being promoted by Frost and the British government - that the UK just wants a basic trade deal - is both untrue and unhelpful. Of course the trade agreement should be ambitious, and of course the geographic proximity of the EU and UK requires unique provisions.

Pretending otherwise might play well at home, with talk of being treated unfairly getting British backs up. But it has zero influence on the EU’s negotiating position. And when has life ever been fair?

Yet, despite the current animosity, an ambitious deal is still possible. But it will require both the EU and UK to compromise. In practice, the EU will probably need to tone down its demands on access to UK fishing waters and alignment on state aid, while the UK will need to accept it can penalised in the event it rolls back existing levels of environmental and labour protections (something that it will need to accept it trade deal with the US, in any case).

But such a compromise will not be reached by the negotiators, Barnier and Frost; it requires political decisions to be made at the highest level. And British and European politicians are currently distracted, rightly, by the fallout from Covid-19.

As such, we should expect the war of words to continue, and little substantive progress to be made on the negotiations, through the summer. Only once the trade talks land back on Boris Johnson’s agenda later in the year will we know if there is a deal to be done. It would be better if this happened sooner rather than later. 

Sam Lowe is a senior research fellow at the Centre for European Reform.