21-3-19
Dear Partners in thought,
As we are deep into the Brexit Westminster saga. I wanted to tell you about “9 lessons in Brexit” from Sir Ivan Rogers who was Principal Private Secretary to Tony Blair and served David Cameron as Prime Minister’s Adviser for Europe and Global Affairs from 2012 to 2013 when he was named Ambassador to the EU. YR was the most senior negotiator for the UK with the EU until he resigned from his position in January 2017. YR comes across as the epitome of the senior British civil servant who is not swayed by partisan politics – he states very vividly he is not “a politician” – and only thinks about the national interest. His book, which is primarily addressed to a British readership, is “to tell some home truths about the failure of the British political class and the flaws, dishonesty and confusion inherent in the UK’s approach to Brexit so far”. While YR is likely a Remainer (as a matter of simple fact(s)) he is not a zealot and his book, while wanting to state facts notably about the trade and economic impact of Brexit and what treaties actually mean, is not to demean but to clarify (even if some references to “some of the right honourable members for the 18th century for whom it will not end well” is quite clear. With only 80 pages (though at times very long sentences – kind of like mine), his book which is a recap of lectures he has given to various universities since his role in Bruxelles, is a very concise, clear and efficient way to help readers understand what really matters with Brexit.
As JK Rowling’s preface says: “Remember the words of Yvan Rogers the next time you see some plausible posh boy in a suit telling you no deal would not hurt at all”. Besides her artful statement, JK Rowling stresses the key point behind YR’s lessons which is that whatever Brexit deal is on offer, the “No Deal” option lauded by many hard line ERG Brexiteers would lead the UK to the economic abyss, primarily hurting many of the Leavers of the left out category in places like Northeastern England and Wales.
With all that in mind, it is also worth to read Fareed Zakaria’s latest piece in The Washington Post which clearly states that Brexit seems to herald the decline of the UK and more generally that of the Western world as China is rising. What Brexiteers failed to grasp in their inward looking approach to all things Brexit (as seen in the way they shape options without realising the EU is also a negotiating party, quite apart from British partisan politics) is the adverse “global” impact of Leave and the harm not only to the UK but also to the European and Western blocs, notably at a time when the Trump Administration sees little value in the latter.
As Simon Kuper from the FT aptly said recently: Remainers talk about the economy while Leavers talk about culture (to which I would add their versions of “full sovereignty” and “identity” for some and by extension “immigration”, fuelled by fear, for many) so it is the usual dialogue of the deaf. YR’s focus is on the negotiation with the EU so much centring on trade of goods and services (not an easy matter to grasp, especially the latter which is key for the UK in its relationship with the EU). He is not so much into “culture” – not as he is a Remainer (which he is even though he makes no mention of it) but as it was his job to sort out a deal with the EU on matters mainly focused on the economy, even if we know that freedom of movement (which in fairness he touches upon too) was a key point for both the UK and the EU and indeed a breaking point or catalyst for many of the Leavers in June 2016.
The nine lessons (and their, at times, strange headings) and messages are as follows:
1st Lesson: “It has of course to be Brexit means Brexit”.
This was the famous line uttered by Theresa May as she officially succeeded David Cameron as PM as a prelude to stressing it was also the Will of the People that the government would deliver upon, come what May. This truism has consequences too, literally al the way. If you are not in, you are out. It is a major regime change. And if you leave, you cannot pick and chose the terms you like and those you don’t. You lose the solidarity that membership gives and in case of friction with one member other members will support it and not you (think Gibraltar) More assertiveness and multi-day, multi-night summit won’t help getting a more understanding EU all the more as Bruxelles is negotiating with a soon-to-be third country. Thinking about YR’s lines one cannot help wondering about the takes of the British PM and the various Brexit Secretaries who always think the EU will accept what they want and have concocted in the Cabinet or following the latest Westminster debates, even when the EU leadership stressed negotiations are substantially over.
2nd Lesson: “Other people have sovereignty too. And they too may change to “take back control” of things you would rather they didn’t”
In a preemptive act of recognition addressed to Leavers, YR acknowledges that the pooling of sovereignty beyond the mere technical regulatory domain into huge areas of public life can be intolerable for some. However “pooling” for many small member nations of the EU is also enhancing their sovereignty through their adherence to common rules, an approach that can also be shared by leading EU member states that understand the virtues and value of blocs in our day in age. YR could have had an easy comparison that would be grasped by hard Brexiteers in that the EU is like a club in St James’s. As already discussed in other Book Notes and Interludes, one joins the club and can later leave it but one has to adhere to club rules when belonging to it and cannot once having left being allowed to benefit from some aspects of membership like in an à la carte menu. YR stresses clearly that the “taking back control” may be in fact very notional with “the autonomy to make British laws over the real power to set the rules by which Britain will in practice be governed as it is no longer be in the room, potentially not even as an observer, when those are set up”. Strong from his experience, YR feels that the “taking back control” amounts to a “simulacrum for some empty suits in Westminster” who may find their day of reckoning in the years ahead as passion recedes and reality sets in.
3rd Lesson: “Brexit is a process not an event. And the EU while strategically myopic is formidably good at process against negotiating opponents. We have to be so, or we will get hammered. Repeatedly.”
YR stresses how delusional Brexiteers have been in stressing how much the EU had morphed from the initial Common Market the UK joined to get into every aspect of British life but that “leaving” would be done swiftly and painlessly. A trade deal with the EU should have been ready by time of exit which, to say the least, after 33 months is very, very far from being the case. No deal would also pause no problem (as the bold and confident hard Brexiteer supporters’ poster says: No deal, no problem). No number or repetition of “WTO Deal” makes Brexit any more real or effective and their assertions by the No Dealers are fantasies produced by people who would “not have recognised a trade treaty if they had found one in their soup”. Interestingly YR speaks as an expert (a dangerous word in the West in 2019) who has negotiated trade treaties and has concocted many soup recipes over the years. YR thus stresses that the original British sin was not to recognise the complexity and inevitable longevity of the Brexit process while sellers of cheap elixirs were promising the British people the moon, tomorrow. This lack of preparedness was compounded by the naive belief that the UK would do negotiation mince mint of an EU “that was nothing if not expert at using the tensions in domestic politics to force the moves it most wants you to make”, something YR stresses it and the 27 member states cannot be blamed for. As a good example of EU acumen is the self-made trap Ms May displayed with apparent cunning in trying to leverage her No Deal threat to get what she wanted from the EU which in turn invariably played against her domestically, given the looming economic costs to the UK, without making Bruxelles budge, all because of the asymmetry of the contest which sadly for the hard Brexiteers also reflected the future of things to come in many aspects of a new relationship with the bloc.
4th Lesson: “It is not possible or democratic to argue (as hard Brexiteers do) that only one Brexit destination is true, legitimate and representative of the revealed “Will of the People” and that all other potential destinations outside the EU are “Brexit in Name Only”
People voted in June 2016 for Leave or Remain though for a variety of very different reasons. He finds that many Leavers wanted to leave the institutions of political and juridical integration of the EU but were still keen on the Single Market (bringing to memory that even Napoleon had said unkindly that the Brits were “a nation of shopkeepers”). YR actually defends those pragmatists who are disliked by the true Brexiteers for whom there is only one Brexit path that has to be all encompassing. Norway and Switzerland which chose not to join the EU years back and were seen by Brexiteers once as vibrant democracies are now not so admirable a model for the Brexit path to be chosen by the UK as they are yet far too integrated. YR while not being an advocate of a Norway EEA arrangement for the UK or actually Ms. May’s deal (which he also thinks was well negotiated by the EU) is concerned that most political activists we hear barely understand those types of alternatives.
5th Lesson: “If WTO (World Trade Organisation) terms or existing EU preferential deals are not good enough for the UK in major “third country” markets they can’t be good enough for trade with our largest market (indeed the EU)”
YR points to the high wire act of moving beyond WTO terms and striking preferential trade deals with major markets as a major step forward in liberalising trade while deliberately moving back to WTO terms from an existing deep preferential trade agreement, through what is the Single Market, as a major step backward to less free trade with the UK’s main market. While there is no logic and it is unarguable, many Brexiteers do, also forgetting that genuine free trade – which they claim to love – actually trammels cherished national sovereignty. According to YR, Brexit will worsen trade with and market access to the EU which, together with markets with which the EU has a preferential trade deal, accounts for two-thirds of British exports. Every version of Brexit will involve a worsening of the UK’s position and a loss of access to its largest market, not to mention that trade deals the UK would need to strike will be very numerous and will take a long time that Brexiteers do not fathom.
6th Lesson: The huge problem for the UK with either reversion to WTO terms or a standard free trade deal with the EU is in services”.
It is “the case of the dog that failed to bark so far” but will in the next few years while the focus has been on the trade of goods, tariffs (no longer the single big issue it was in trade), the manufacturing supply chain and departing the Single market and Customs Union. This is explained by the fact that the trade in services, always bundled with goods and the huge complexities of its non-tariff barriers, is not easy to grasp. Trade in services represents three quarters of the British economy, which the City of London, actually a small part of the total exemplifies (with many banks ready with their reallocation plans to Paris, Frankfurt and Luxembourg). Many of these services (not hairdressing) are tradable across borders with Britain is clearly very competitive in them like inter alia finance, business consulting, accountancy, legal and education services. They also represent an export to the EU of EUR 90 bn a year in 2016 or as much as what Britain exports to its eight next export markets put together, this leading to a significant services trade surplus with its leading market. This lesson deals with how the needs of the UK’s services industry were sacrificed to the primary goal of ending free movement (also one might surmise as the sector is probably more filled with Tory voters that would not desert their party to back the “new” Labour (pun intended) and Jeremy Corbyn, in spite of the figures at stake). When attacking the EU Single Market on trade, it is also worth remembering that services trade is freer between member states than it is even between States in the U.S. Given the economic imperative for a country that has a world class services industry, the EU knows the UK will have to pay a heavy price to maintain better access to its largest market for its finance, legal and consultancy firms than other third countries have. However there is no real focus on the issue of services trade today. By way of background information EY just released an estimate that the UK would lose GBP 1 trillion to Europe due to Brexit following plans financial services companies had to implement (See FT, 20th March, 2019).
7th Lesson: “Beware all supposed deals bearing pluses”.
The “Canada +++”, “Super-Canada”, “Norway +”, “Norway-then-Canada”, “Norway-for-Now”, “Norway + forever” and now even “No Deal +”, “Managed no deal” or “No deal mini deals” – putting aside the facetious feelings of these names – are depressing to the professional trade negotiator as they all involve dishonest propositions with deficiencies that will disappear once the British team negotiates their own “pluses” version that will make them fly. Out of sheer will and doggedness (à-la-May I would add). To these trade artists who who see “Brexit as a cake-walk”, YR sees only “half-baked alternatives”.
8th Lesson: “You cannot and should not want to conduct such a huge negotiation as un-transparently as the UK has. And in the end it does you no good to try”.
YR is adamant that the EU has been a model of transparency throughout the Brexit negotiating process, rupturing the image of “a bunch of wildly out of touch technocrats producing turgid, jargon-ridden Eurocrat prose”. Conversely the British government and negotiating teams have been at their most opaque as a result of its internal divisions and quite “unable to articulate any agreed, coherent position”. YR reminds us that it is the EU that had to up its game over the years, precisely as it gradually ended up doing more trade deals than any other trade bloc on the planet. In doing so the EU has developed a way to inform its public, something the UK failed to do out of a lack of habit. Constraints and trade-offs were never explained nor were managed.
9th Lesson: “Real honesty with the public is the best – the only – policy if we are to get to the other side of Brexit with a healthy democracy, a reasonably unified country and a strong economy”.
To YR the whole Brexit process of the last 30 (now 33) months has suffered from opacity, delusion and mendacity. He goes through the various positions of the “no dealers” with their bold and decisive jump off the cliff with a delusional WTO rules safety net; the People’s voters who may have a case after so much time (and I would add real facts) but who would alienate those whose views would be ignored once more until they conform; the Shadow Cabinet Members looking for a General Election that would allow Labour to miraculously negotiate a full trade deal that would mimic the advantages of the Single Market and Customs Union that the EU would naturally welcome with open arms and finally the PM’s “bad deal” that has the merit of having been negotiated and signed with the EU but bears the scars of the dishonesty of the debate fuelled by HM’s government since June 2016. The only regret one might have is that YR does not come forward with the “scenario” he would favour as if he still were the senior civil servant of the realm and not a decider.
If there was one key criticism to make it would be that the lesson should be better formulated and perhaps less focused only on trade even if if it is a key area of YR’s expertise and is indeed a major issue to consider. However YR’s negotiating remit was very much on trade-related matters so at least we get the benefit of his expertise on something he knows well and is key. Another one would be that YR does not seem to think much of another referendum (a brief mention is made in two lessons) and is only focused on encouraging the needed debate on viable Brexit options, this is spite of his very likely support of EU membership and of its benefits and believing that he is not a crusader for the Will of the People at all costs to the British nation. Lastly YR does not provide his views on what would be the best avenue to leave the EU even if one can surmise that Ms May’s signed deal with the EU should a viable, if not a perfect option, though one he actually does not support either.
While YR does not dwell enough on it and it might explain many of the problems we have witnessed with consternation – and again being away from the “sound and the fury” is useful to arrive at this conclusion – one cannot miss the obvious precedence of sheer partisan politics over the national interest when dealing with the Brexit process. For many Cabinet members, MPs and other politicians , Brexit is a means and not an end. It has been used as a means to ascertain power, partisan or personal, with the backdrop of the most desolate political landscape in modern British history. Some thinking about a general election, their seats and how to save them, some wanting to deliver on an agenda that has become hollow and dangerous with time. As YR rightly states in Lesson 8, rather than the negotiation process, in and beyond Parliament, politicians would have had to be different from the outset. One of the key elements of concern for Britain and its future “vassal state” status in its relationship with its biggest market and soon to be third party trading “partner” is that it will no longer be able to influence EU laws and regulations as it artfully did for years putting it at a strategic disadvantage and reflecting its relatively small nation state status (conversely the EU – and I regret this deeply – will not benefit from this unique free market flavour in Europe that had to be taken into account in building EU laws and regulations and was a great advantage later on to the UK itself).
All the lessons proposed by YR are worth reading, especially about their specific contents and all the more as we may be going into “some” extension of Article 50. I wish that some cabinet members and MPs would read this Book Note and even more so, the actual book so they could become enlightened for once and remind all of us why Britain is the mother of wise and modern democracy.
Warmest regards
Serge
Desperate Measures 