Brexit: EU Negotiators Are Running Out of Time, and Patience

EU's PULSE, WEEK ENDING 11 NOVEMBER

STALEMATE IN THE WESTERN FRONT

The deadline for agreeing on how Brexit will be implemented is getting closer. The European Council has set as its target-date the next Summit of the heads of state or government of the Union, on 14-14 December 2017. But Brussels is getting impatient, after last Friday’s bilateral meeting between the EU and British negotiators.

The meeting was, indeed, cut short, as it seemed that London was not prepared to offer anything new, according to the European chief negotiator Michel Barnier. Barnier has been accusing his British counterpart David Davis of stalling and being vague.

What is certain is that the two parties use different negotiating techniques. Brussels approaches the ‘divorce’ with a technocratic mind, going through ‘rights’ and ‘obligations’, with as much quantification as possible.

London, on the other hand, does not believe in the rounds-based negotiations (last Friday was the sixth round)—which are reminiscent of box matches, or of past negotiations between the West and Saddam’s Iraq or the Ayatollahs’ Iran. Westminster wants to have continuous, rather than fragmented, political discussions and bargaining among equals, instead of ‘accounting’ jargon.

Barnier, however, appears to be focused on money, primarily. Before getting into any political talks, he wants to get a firm commitment from Theresa May’s cabinet that the UK will pay in full its 13% contribution to the EU Budget, of about €30 billion, and to the pension scheme for the EU’s staff, estimated to be close to another €9 billion.

David Davis, UK Brexit Chief Negotiator (below):
Easy does it.

Other issues at the top of Brussels’s agenda are (a) commitment by Britain to observe EU citizens’ rights after the Brexit—particularly family reunification across borders, repatriation to EU states of social security rights by EU workers in Britain, and the supremacy of the European Court of Justice in resolving related disputes; (b) commitment by London to keep the borders between Northern Ireland (UK territory) and the independent Republic of Ireland open, without the built-up of any ‘infrastructure’—that is, without customs and police stations between the countries. It is difficult to imagine London agreeing to such demand, considering that the UK will be no longer part of the Customs Union, and that one of the mandates of the pro-exit voters to their government is to keep tight control on immigration!

EUROPEAN PARLIAMENT: “YES TO AGRICULTURAL CARTELS!”

The European Union seems to be moving towards a totally unexpected direction: it is planning to introduce a set of laws to enable farmers cooperate and fix prices in view of protecting their revenues from the disproportional bargaining power of major intermediaries and distributors.

In a rare move, the European Parliament  (‘EP’) has taken the initiative to bypass the Commission and work together with Member States’ governments to put an end to practices by large food distributors which it suspects as being abusive vis-à-vis the producers.

The starting point in this thinking pattern was apparently a public declaration by French President Emmanuel Macron that France in 2018 will pass laws to improve the economic conditions of farm owners by letting them get around the distributors and sell collectively their produce at a higher profit.

French farmers claim that their income has dropped by 15% in 2015 and 2016 because of aggressive negotiating techniques and unfair distribution practices by supermarkets.

French Peasant Girl: Souvenir de Picardie.
Painting by Jean-François Millet (19th c.).

Allowing the farmers to create collaborative enterprises that will fix prices means accepting selectively the creation of cartels. This is formally against the core principles of the Internal Market of the EU, and of EU Competition Policy—a cherished and heavily protected domain by the Commission (see Treaty on the Functioning of the European Union (‘TFEU’), Articles 101 and 102). There is, however, scope for a window of exemption in the legal texts, generally applicable in the public interest (Article 101(3) TFEU).

Meanwhile, the food distribution industry has just started a campaign to counter the intentions of the EP. Its lobbyists, in Strasbourg and Brussels, are at work to prove that both the consumers and the farmers will lose from any new configuration of the food industry. Prices, they claim, will go up, while the producers’ net profits will nosedive, as they will have to engage in distributing and marketing. Moreover, they argue, EU agricultural subsidies should be abolished, since the farmers will now become an active commercial actor—which, in a free market, should swim or sink on its own merits.


Credit for photos: David Davis, courtesy of UK House of Commons. Painting: photo by Hugo Salmson, Nationalmuseum, Stockholm-Wikimedia Commons.