It's Still Too Early for a Post-Brexit Breakthrough

Mish

Deadlines come and go. So what?

EU's Offer Still Unacceptable

Reuters reports EU's Trade Deal Offer to Britain 'Remains Unacceptable'.

British Prime Minister Boris Johnson and European Commission chief Ursula von der Leyen both said on Friday that Britain was likely to complete its journey out of the EU in three weeks without a trade deal.

“Talks are continuing overnight, but as things stand the offer on the table from the EU remains unacceptable,” the British source said.

“The prime minister will leave no stone unturned in this process, but he is absolutely clear: any agreement must be fair and respect the fundamental position that the UK will be a sovereign nation in three weeks’ time.”

The two sides have set a deadline of Sunday to find agreement and prevent a chaotic break.

Deadline is Not Sunday

The deadline is not Sunday, December 13. The deadline is Thursday, December 31. 

Johnson Not Bluffing

In case the EU has not figured this out, Boris Johnson is not bluffing about a willingness to leave with no deal. 

Johnson was willing to bluff about not honoring the Withdrawal Agreement, but that was in response to a preposterous EU demand that Johnson give up all fishing rights and put itself at the mercy of the European Court of Justice in disputes.

Those are Johnson's hard lines and he will honor them.

Deal Still Likely?

Despite what a flurry of articles say, I still suggest A Post-Brexit Trade Deal Now Looks Likely.

Please note that it's only December 9. There is plenty of time for more threats and more bluffs before a deal is reached. 

Even then it will not be the "final deal". It will be a bare bones WTO agreement of some sort with provisions to haggle for years to come.  

This is the only way the EU works, using the word "works" loosely.

The breakthrough on which I based my analysis was Johnson agreed to honor the Withdrawal agreement and the EU stopped its demands that Johnson could never agree to.

There now appears to be some EU backsliding.

If a deal does fall through, and it could, it will be a result of the EU underestimating the resolve of Boris Johnson once again.

So, despite the weakening  prospects, it still looks like a deal is more likely than not.

December 13 is just not close enough to the true deadline to matter much.

Mish

Comments (33)
No. 1-10
Eddie_T
Eddie_T

May old acquaintance be forgot and never brought to mind.......

The song they’ll be singing when the deal is struck.

Doug78
Doug78

It's not the fish that's the issue. It's that they are a manifestation of sovereignty itself and therefore cannot be compromised. It is why the Brits voted to leave in the first place. It's just endgame posturing now.

oee
oee

the cynic in me would say that they will hatch a deal in the end and this talk of sending warships to protect English fishing zones, bottlenecks at ports, and shortages of food and medicines are part of a fear project to ease for a deal. He falsely claim that he fought hard for the deal.

Eddie_T
Eddie_T

Off-topic but hopefully of interest :

Of the top ten high COVID states, Texas appears to be doing the best job of turning the curve back down.....looking very good overall with active cases statewide falling noticeably since Dec 8th,

Illinois and Michigan show signs of peaking now.

The bad news, the other top seven, CA,NY,PA,FL,GA,OH, and TN.....are all still going up. NY looks particularly bad.

And to report on again on the Dakotas .....both have clearly peaked now and numbers are falling in both states.....but ND with its mask mandate is falling much faster and with fewer upticks along the way.

Remember both states had very similar numbers when the mask mandate went into effect in mid November. At the moment freedom loving South Dakota has 3X the number of active cases as their neighbor just to the north. 4K vs 12K.

Still think masks don’t make a difference?

Eddie_T
Eddie_T

Top ten COVID states by total cases, not per capita.....should have mentioned that.

PecuniaNonOlet
PecuniaNonOlet

I am not educated enough about the inner working of the eu ratification process but it is Dec. 13 today and dont all 27 or so countries need to approve of any deal? If so, how will that happen as everyone goes off on holidays across europe for christmas?

It seems the default will be no deal. Will be watching for the chaos.

njbr
njbr

In the end, a dispute resolution body needs to be accepted by both sides--UK courts, EU courts, WTO, or an entirely new one.

Each party obviously doesn't want to be subject to the other, so WTO or an entirely new one has to be set up.

Well, the WTO has not been a quick, effective and powerful arbiter in trade matters and an entirely new one is so far beyond the initial agreements and not possible to stand up within the first few critical years of the new relationship. The only way for this to be resolved would be for the seller meet the demands of the cistomer. I'll leave it to you to figure out who is the larger customer.

The fundamantal issue is that every agreement involves giving away sovereignty to achieve mutuality. And that miutuality allows the parties to live in agreement and have trade.

The UK is like one party in the divorce, insistent on the keys to the old housethat they moved out of so they can come and go as they wish even though they dont' live there any more, have complete freedom to use the facilities, while denying similar priviledges to the divorced spouse, and still be able to have a say in what is acceptable for the party they left to do.

That's the stage of the UK/EU negotiations.

It is obvious--leave doesn't ultimately mean leave in the sense of never interacting again (thinkof the kids), there still has to be some sort of relationship. But this is the stage that the divorce lawyers bring it to court or arbitration, because the leaving party doesn't want their life to be any different after they leave the marriage.

Serious horse-trading has to occur on a whole herd of issues. Fishing is a minor and faintly ludicrous one to hang up on--a small part of either's economy and the fish come and go through ill-defined and not-so-accpeted EEZ's. But there are far more serious issues like EU certifications that will need to be maintined in a third country, inspection precesses for goods and services, etc., customs, tariffs, shipping, trans-shipment from the EU (mainland) to UK to EU (Ireland) etc, etc.

The truth is, the only agreement that can be had at this point is a tolling ageement. But Johnson was the one that set the hard date and it would be embarrassing forhim to back down, so it probably won't happen.

The second truth is that the UK/EU will need to have on-going, intensive negotiations for the next decade to continue to create a new relationship (just like a divorce, eh?).

A crah will occur at the end of this month in the absence of a tolling agreement--there is not enough groundwork laid for the outline of a new relationship.

LewisM
LewisM

Right now the talks boil down to who's going to take the blame for no deal. It's sad that the English got stuck with Boris as a negotiator (notice I don't say UK, which is well on its way to disintegrating). Boris couldn't sell fire to an eskimo. England, on the other hand, on January 1st will be alone and friendless with Scotland looking for an exit and a Biden admin that's going to be more closely aligned with the EU.


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