Friday, December 11, 2020

UK to the European Union: Divorce Can Be Messy

It’s hard to take in crises outside of our dramatically consumed domestic concerns. It’s hard to look past our election, the fact that with about 4% of the earth’s population the US has 25% of the planet’s COVID infections and 20% of the world’s COVID deaths, the devastating hurricane, wildfires plus the litany of blue on black shootings and resultant protests. Few believe that a safe and effective vaccine is just around the corner, whether our votes will get counted is deeply troublesome and most expect a virulent second wave to this pandemic later in the fall. 

But there is more going on around the world. Beyond the pandemic. A Russian dissident, poisoned with a Russian military nerve agent, is off life support in Germany, but Vladimir Putin seems to lead a rogue and unrepentant nation. Even as Trump continues to accept unsupportable Putin denials against hard evidence from his own intelligence agencies to the contrary, Russia is flooding the US election with disinformation and manipulation like never before. China is crushing dissent in Hong Kong, with a parallel crush of opposition in Belarus. A crushing superstorm has descended upon Japan and Korea, and that dreaded second COVID wave seems to have begun right here in the good old USA; the numbers are the worst since the pandemic began.

To make complicated matters worse, there is this continuing confrontation between one of the main champions of Brexit, now very much in command as UK Prime Minister – Boris Johnson – and the negotiators from the European Union. Heels are well-dug in. “My way or the highway” talk is more reminiscent of an old west shoot out, and it is very possible that the headbutting just might not generate a smooth transition to this Brexit parting of the ways. If the break occurs without resolution of some truly material points, if there is no overall agreement on how the parties will relate going forward, there will be serious economic peril for both sides. And it is not as if there aren’t already massive blows to the global economy from the pandemic decimating their economies already. It just could get so much worse from down and dirty pig-headedness.

“First: a defiant-sounding interview with David Frost, the UK chief negotiator in the troubled trade talks with the EU. Next came a leak about government plans to introduce domestic legislation which would partially undermine the Brexit divorce deal, the Withdrawal Agreement, signed last year with the EU. Also affecting the Irish Protocol, designed at the time by Brussels and the UK to avoid a hard border on the island of Ireland.

“Finally, Prime Minister Boris Johnson has said that if no trade deal is agreed by mid-October, there will be no trade deal at all with the EU. And that - by the way - a no-deal scenario would actually be good for the UK, giving it full control over its ‘laws, rules and fishing waters.’…

Bang on cue, irritated European diplomatic sources described the Frost interview as sabre rattling and ‘unsurprising muscle flexing’ ahead of the last tough rounds of trade negotiations with the EU.”

“As regards the domestic legislation affecting the Irish Protocol (the precise details of which have not yet been revealed), Ireland's Foreign Minister Simon Coveney tweeted that would be ‘a very unwise way for the government to proceed.’” BBC.com, September 7th. Exactly how do you maintain a series of customs checkpoints, even immigration checkpoints, along the 310-mile currently open border between Northern Ireland (UK) and Ireland (EU)? Currently with somewhere between 200 and 275 crossing points? Remember the “Troubles” – the effective battles between Protestant and Roman Catholic factions in Northern Ireland (from the 1960s until the Good Friday Agreement in 1998)? That open border is a symbol to all of the reconciliation between those factions. Close it… and…

But that secret UK legislation over this complex border situation (that might reverse that open border concept), one that even staunch Brexit supporters doubt the EU would accept, just might be enough on its own to tank the whole process. Is it just to gain negotiating leverage or do UK ministers mean to reverse course?  “While a high-level EU diplomat from a country traditionally close to the UK slammed the planned legislation as, not only a trust or credibility issue, but ‘something that could lead to the unravelling of the already fraught EU-UK trade negotiations.’… It was a self-defeating move by the Johnson government, he said… So self-defeating, in EU eyes, that I have now begun to hear musings amongst Brussels contacts that maybe they were not the government's main target audience after all.

“Because, say EU figures, if the Frost interview, the legislation leak and the prime minister's words were all designed as a negotiating tactic, to put pressure on the EU, then it was a terrible tactic, they insist, as it simply serves to ‘raise European hackles.’” BBC.com. If this transition is not clarified, if there is a hard Brexit, the global economy will slide down one notch. And while that may create relative value for the dollar against both the pound and the euro, there really shouldn’t be any joy in sitting together as our entire ship sinks farther into the ocean. As of late October, the EU and the UK remain seemingly irreconcilably deadlocked.

I’m Peter Dekom, and most troublesome of all for us is the lack of American leadership with sufficient knowledge and sophistication to lead us through the possible consequences of a hard Brexit without damage to our own economy.


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