EU Insists on Orderly Brexit as U.K. Battles for Upper Hand

  • Flurry of U.K. documents seeks to showcase clarity of vision
  • Barnier resisting pressure for EU to move on to trade talks

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Britain is in a hurry to get Brexit talks to envelop trade. Not so fast, the European Union says.

Prime Minister Theresa May’s government is issuing on Tuesday its third position paper in two days on how it sees its future relationship with Europe. The latest details focus on civil judicial cooperation -- covering disputes from cross-border business to divorce and child custody -- ahead of a much-anticipated document Wednesday on the role of the EU Court of Justice.

The aim is the same: rebut criticism from the EU that the U.K. is unclear about what it wants and pressure its divorce partner into discussing commerce.

The U.K. returns from the summer break with a strategy to force a conversation on the future much sooner than the EU wants. The release of a flurry of policy specifics seeks to demonstrate that Britain has thought things through as it builds the case that the myriad issues are complex and interconnected enough to require trade to be part of the mix.

Brexit Secretary David Davis has adopted a more forceful attitude and is reopening for debate the EU’s stipulation, which he had appeared back in June to finally accept, that the divorce needs to be settled first.

His chief adversary, EU chief negotiator Michel Barnier, tweeted Monday that the new round of negotiations next week will “focus on orderly withdrawal” and that he’d been “clear and transparent since day 1.”

In other words, the EU is not budging. So where does that leave the U.K.?

Dazed and Confused

While much has been made of the batch of position papers coming out, one U.K. government official said that many of these are devoid of much substance and that most of the preparatory work is being done behind the scenes.

Irish Prime Minister Leo Varadkar said in an interview with Bloomberg Television in Toronto on Monday that he remains “confused and puzzled” about the U.K.’s plan for trade after Brexit. Varadkar dismissed the U.K.’s position as unrealistic and repeated that he wants no border on the island of Ireland, ahead of a visit to the U.S.-Canada frontier on Tuesday.

And despite the rhetorical posturing from the U.K. government, both papers out Monday were uncontroversial in reiterating that Britain wanted the “freest and most frictionless trade possible” and also to preserve existing rules on confidentiality.

In fact, the paper concerning "goods on the market" drew praise from British businesses concerned their products will lose regulatory approval the day after Brexit even if they run off the same production line as those shipped on the day the U.K. departs.

The U.K. listed examples of how products from pharmaceuticals to cosmetics could be caught up in Brexit if the issue isn’t tackled. Bart Van Vooren, a lawyer at Covington & Burling LLP, said the regulation of goods ultimately will depend on something far more important.

Crunch Time

“Without the U.K. making a fundamental choice on its future relationship to the EU, it cannot expect to receive this depth of mutual recognition,” he said. “Without making that choice clear now, the proposals in the position paper simply cannot work and the EU will not give concessions to the U.K.’

On Tuesday, May’s government will suggest possible options to manage cross-border disputes between consumers, businesses and investors. The proposal will cover differences between businesses such as a foreign supplier failing to deliver to its British partner, to how to resolve family disputes when some of the parties reside in the EU, Davis’s office said.

The proposal comes as the government readies itself to unleash the hotly anticipated document on the role of European judges in policing citizens’ rights and trade. Ending the jurisdiction of the ECJ has been a red line for May, but her weakened hand after a disastrous general election changes the equation.

The prime minister is caught in a bind because conceding on the ECJ would mark a U-turn and draw complaints from those who campaigned to leave, while failing to find a solution would prompt the EU to delay the start of talks on a new trade deal.

The EFTA Way

Wednesday’s proposal will look at the judicial body that presides over the EU’s dealings with Iceland, Liechtenstein and Norway, albeit not as a model to replicate, according to two government officials familiar with the document.

One official said that May herself is keen on the idea of an alternative court even as it’s becoming increasingly clear that ECJ rulings will be binding for years to come. That is a problem because the notion that European judges will still hold sway over Britain is anathema to many who voted for Brexit last year.

Unlike the ECJ, the EFTA court’s decisions aren’t binding on member states in cases referred to it by national courts. In an interview with the Times newspaper published on Monday, Carl Baudenbacher, president of the court, said there was a compelling case for Britain agreeing to "dock" with his body and allowing it to oversee its relationship with the EU.

Some Brexit supporters are unimpressed with the notion. Lawmaker Jacob Rees-Mogg told the newspaper that "the big difficulty is that the EFTA court takes its lead from the ECJ and while its rulings are technically advisory, in practice they take direct effect in the countries concerned. That would be unacceptable.”

The spat threatens to prevent EU governments from declaring "sufficient progress" has been made on the terms of separation, the trigger for talks to turn to a trade pact. Both sides had hoped to reach that milestone in October, but that time frame is now in doubt and the clock is ticking down to Brexit day on March 29, 2019.

The government said Monday that its timetable for talks remains on track, a view echoed by Justice Secretary David Lidington on BBC Radio 4 on Tuesday.

“The EU, when there’s the political will, can act very swiftly,” Lidington said. “I think it’s perfectly possible for us to get a constructive deal that works for both sides within the time frame.”

— With assistance by Ian Wishart, and Dara Doyle

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