A question of trust | Financial Times

Good afternoon. It’s been an intriguing week for post-Brexit EU-UK relations during which some gaps have emerged in the political and official-level engagement between the two sides.

On Monday my colleague Andy Bounds listened to the honeyed tones of the foreign secretary James Cleverly as he ladled on the diplomatic syrup during a visit to Brussels during which he hailed new “close and friendly” UK-EU ties.

Cleverly argued that the levels of trust that he had built up with European Commission vice-president Maroš Šefčovič during the negotiations to resolve differences over the Northern Ireland protocol were the basis for a better future relationship. 

He spoke of the new “tone of collaboration and co-operation” being a “good foundation stone” for future discussion on other areas.

The “good chap” theory of government

“The Windsor framework was based on trust, the personal trust between myself, Maros, President Von der Leyen and the prime minister. While we may do things slightly differently, we were pursuing high values, standards,” he said.

That’s all well and good — and surely better than the churlish punch-up diplomacy of the Johnson/Frost era — but other events this week in Brussels raised the question of how deep a foundation can really be laid with warm words.

People talk about the “good chap” theory of government in the UK, but Cleverly came perilously close to espousing the “good chap” theory of EU negotiations, an approach that has bedevilled the post-Brexit EU-UK relationship talks since the very start. 

His remarks reminded me of Boris Johnson’s first big Brexit speech in February 2020 in Greenwich where he promised to preserve the general “va et vient” for “academics, students and businesses” before blithely adding “but I see no need to bind ourselves to an agreement with the EU”.

And yet, of course mobility around the EU is entirely based on agreements, most notably free movement and Schengen, but also schemes like Erasmus, Horizon and the List of Travellers scheme for group school travel. The UK didn’t secure agreements on these things and, QED, mobility has been constrained accordingly.

The ongoing negotiations over Horizon and the Commission’s tough line (still) on refusing to delay the introduction of tighter “rules of origin” for the electric car industry speak to the gap that exists between high-level diplomacy and iterative official-level negotiations.

So while Cleverly was gushing, Richard Szostak, the top EU Commission official for UK relations, was telling British and EU parliamentarians that the EU will stick by plans to impose tariffs on electric vehicles shipped between the UK and EU from next year.

The hard-nosed calculation (and we’ll see if this really holds later this year) is that even if it means 10 per cent tariffs on EU-made EVs being exported to the UK, that’s an acceptable price to pay to incentivise EU manufacturers to build up indigenous battery-making capacity. 

According to one estimate by a UK consultancy, that could deliver a billion quid to the UK exchequer in tariff payments (and putting tariffs on EVs sends an odd signal about net zero) but it would also expedite the slow strangulation of the UK car industry. 

Deal on the Horizon

On Horizon, sections of the UK system are briefing that a “deal is done” and on Sunak’s desk, but it’s not clear if the PM will sign off on something in which the UK will almost certainly extract less than it contributes, as we discussed last week.

The scientific, industrial and academic communities believe the premium is worth it, in order to access wider networking benefits, but if a deal is done (and a text published) it will be very interesting to see how much the new “goodwill” Cleverly describes translates into bankable financial concessions. 

For now the EU remains tight-lipped about the Horizon deal. One reading in Brussels is that the UK briefing, as well as perhaps trying to bounce/embarrass Sunak into agreeing the deal at home, was also to kick it “upstairs” to leadership level in order to be sorted.

This, as Cleverly observed, is what happened to secure the Windsor framework deal in the final rounds of negotiation, with the Commission pushed to make concessions on the “Stormont brake” that, at official level, it had been reluctant to make. 

Applying the same tactics to Horizon might work, but it also risks upsetting EU member states who understand that the iterative, legalistic processes of the EU are a necessary function of yoking together 27 sovereign countries — and the UK doesn’t get a special political pass every time it hits an impasse in the negotiating rooms of the Berlaymont. 

If everything gets done at a political level, then the basic fairness structures of the EU break down, and that if it applies to member states, it must surely apply doubly to non-members.

Sunak and the EU Commission president Ursula von der Leyen will meet at the sidelines of the Nato summit in Vilnius next Tuesday, where the Horizon deal will, reportedly, be discussed. We’ll see what emerges. 

But the Commission will be sensitive to the narrative that the Brits just run to Ursula every time they want something — “VDL is their ‘go-to’ on everything” as one EU official puts it — this applies particularly when the Commission is trying to keep member states in line in other areas, like youth mobility, where the UK is looking to negotiate bilaterally.

The last time the pair met at the Council of Europe Summit in Iceland in May, they agreed to deepen UK co-operation with Frontex, the EU border agency, which upset some EU member states that were blindsided by a high-level agreement on which they’d not been given notice.

Horizon is genuinely an issue of mutual interest — though a much less urgent one than Northern Ireland — so perhaps Sunak, if he’s unhappy with the Commission’s current offer, will convince von der Leyen to get her officials to go the extra mile.

It’s not really clear why the UK should have a worse Horizon deal than, say, New Zealand or Israel, but equally the EU cannot work (and cannot be seen to work) on the basis of special pleading. The UK should be careful not to overplay its diplomatic hand.

Brexit in numbers

This week’s chart comes courtesy of the team at Queen’s University Belfast — David Phinnemore, Katy Hayward and Lisa Claire Whitten — who have been tracking attitudes to the Northern Ireland protocol over time.

It’s important work because so often newspaper and TV coverage is dominated by Unionist voices. This isn’t surprising, since it is Unionists that continue to block the restoration of the Stormont power-sharing executive, so are by definition more newsworthy.

But the fact remains — as it has for a long time — that the majority of businesses and people in Northern Ireland (albeit some grudgingly) recognise that the protocol is the best of a bad Brexit job, and this is even more so after the signing of the Windsor framework.

As Phinnemore explains, there has been a steady shift in favour of the deal, from an almost deadlocked 46-47 per cent in March-June 2021 to 61 per cent in favour in the latest round of surveys, up from 53 per cent in early February 2023. “Not a huge jump, but notable,” as he puts it.

It has to be noted, however, that there has been no significant movement in the 20-25 per cent who “strongly disagree” that the protocol/Windsor framework is “appropriate” for managing the effects of Brexit for Northern Ireland — so hardline Unionist opposition remains deeply entrenched. 

Of course, as Phinnemore notes, we’re still in the early days of implementation. The findings of the next poll in October — as the new Windsor framework easements and requirements start to take effect on consumers and businesses — will be interesting indeed.

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