MIDDLESBROUGH, England — The U.K. has conceded a lot to get the transition deal it sorely needs, but it has not given up asking for something in return — a voice at the EU table.
In a key speech on the British government’s vision for a transition period, Brexit Secretary David Davis said his negotiators would be seeking “a way of resolving concerns” if the EU were to change its rules to the detriment of the U.K. during the transition. During that period the U.K. — having ceded its seat at the European Council, its MEPs and its role in the Commission — will have no formal way to influence the EU legislation it will remain subject to.
While admitting that time is of the essence in agreeing a transition — both sides ideally want it sorted by the European Council summit in late March — Davis knows that he has little leverage over the EU27. The U.K. needs a transition deal more than they do — a fact underlined by an open letter signed by Davis and two other Cabinet ministers that is designed to reassure businesses who are increasingly worried about a lack of regulatory and legal certainty post Brexit.
“This will be a relationship where respect flows both ways” — Brexit Secretary David Davis
And in any case, delivering what Davis wants will require some imaginative thinking. No such mechanism currently exists. Nor is it signaled in any of the leaked draft versions of the EU’s negotiating directives for the transition talks — a fact that has not gone unnoticed by the U.K., and was a significant factor behind their decision to set out the request ahead of those directives being finalized by the EU27 on Monday, individuals familiar with the matter said.
“This will be a relationship where respect flows both ways,” Davis said, speaking to an audience of business leaders summoned to a port warehouse in the northast town of Middlesbrough on Friday. “And it’s in that spirit we should approach the implementation period as the bridge to this new relationship,” he added.
The dispute resolution mechanism imagined by Davis is one aspect of what looks like a three-tiered insurance policy by which the U.K. wants to protect itself against any EU rule changes that might harm its interests during the transition. What these might be is not explicit. Any alteration to financial services regulation that harms the City of London features heavily in British nightmares, however.
The first tier of the policy is trust. Davis called for an agreement that included “each side committing to not taking any action that undermines the other.” How enforceable such a commitment would be is debatable.
The second is practical reality. “It usually takes around two full years for major legislation to make its way through the EU system into law,” Davis said. So anything coming into effect during the transition, the U.K. would have a say in anyway.
It’s the third and final tier of the insurance policy that could be complicated. Notwithstanding the two previous guarantees, Davis said, “we will have to agree a way of resolving concerns if laws are deemed to run contrary to our interests and we have not had our say, and we will agree an appropriate process for this temporary period.”
To Brussels ears, highly attuned to the gentle rustle of cherries being picked, that might sound suspicious. For the EU27, not being in the EU means losing your say. Just ask Norway.
Much will depend on the detail of what the U.K. asks for — something Davis left unspecified. If it looks too much like membership, they can probably go whistle. But having agreed to accept all EU rules, and by continuing to pay their financial obligations to the EU, the U.K.’s negotiators may have bought a degree of goodwill to achieve something more limited. Time will tell.
Playing to the gallery
In truth, Davis’ pitch was as much aimed at a domestic audience as it was at Brussels.
It was only on Wednesday that he endured a needling inquisition about the transition period from Tory MP Jacob Rees-Mogg at the House of Commons’ exiting the EU committee.
Rees-Mogg, who has quickly emerged as the government’s most dangerous backbench scrutinizer, challenged Davis to explain how — by abiding by the rules, remaining under European Court of Justice jurisdiction and paying into the EU budget, all without any say in governance — the U.K. would be anything other than a “vassal state” for two years or more. Davis said at the same committee hearing that the transition would last “between 21 and 27 months.”
“Vassal state” — or “mini me” to the EU, as Rees-Mogg described it in a Thursday speech — is dangerous language for Davis and Prime Minister Theresa May, whose political authority over restless Brexiteers in their party rests on the idea that Brexit must mean British regulatory, legal and political autonomy.
Conservative MP Jacob Rees-Mogg | Oli Scarff/AFP via Getty Images
It was no surprise then that Davis made clear he also wanted to secure as much independence during the transition as he can. The Brexit secretary called for the U.K. to be able to negotiate and even sign its own free-trade deals with non-EU countries during the transition (although not to implement them).
Davis also reiterated the government’s plan to introduce a registration system for EU citizens coming to live in the U.K. during transition — allowing the government to point to a change in the immigration system that otherwise will mean freedom of movement continuing in all but name for that period. “It will have no bearing on people’s ability to work or visit,” Davis made clear. That too will struggle to win favor among backbench Brexiteers.
Many in government hoped a transition deal would be easy for the U.K. to push through, both domestically and in Brussels. The more we learn about it, the less likely that appears.