Tuesday, May 28

David Davis scrambles to salvage EU relations after damaging trust



David Davis on the BBC’s Andrew Marr show at the weekend when he made the comments about the UK’s agreement with the EU which will allow Brexit talks to progress to the next stage. David Davis has scrambled to salvage relations with Brussels after he was accused of damaging trust in the Brexit talks by making inflammatory comments.

EU leaders have warned the British government against backtracking on promises made in Brussels after Davis suggested a Brexit breakthrough reached last week had no legal status.

Senior EU figures voiced irritation on Tuesday with Davis’s claim over the weekend that the UK’s concessions in an agreement struck last week to move talks on were merely a statement of intent without legal backing.

Michel Barnier, the EU’s chief negotiator, warned that the UK’s divorce deal with the EU depended on the British government sticking to an interim deal made last week on Ireland, citizens’ rights and the financial settlement.

“We will have a final agreement only if the final commitments taken by Theresa May and the British government on Friday are respected,” he told journalists. “And we will be vigilant; we will not accept any backtracking from the UK.”

A senior ally of the German chancellor, Angela Merkel, said the British government risked losing the EU’s good faith. “The first phase of #Brexit negotiations was meant to build trust,” tweeted Manfred Weber, the head of the centre-right bloc in the European parliament. “By downgrading this agreement to a statement of intent, the UK government is putting our trust at risk. The EU 27 & UK must make it clear on Thursday that the agreement is binding for both sides.”

Barnier also rejected Davis’s claim that a future trade treaty could be signed on 30 March 2019 – the day after the UK’s EU exit. Barnier said he expected the EU and UK to sign “a political declaration” on the future relationship. “But it cannot be anything else. In technical, legal terms it simply is not possible to do anything else. And David Davis knows that full well.”

The Brexit secretary had told the BBC’s Andrew Marr Show on Sunday that a trade deal could be signed “maybe one minute after we leave, or one second after”.

Davis was engaged in urgent telephone diplomacy on Tuesday in an attempt to persuade Guy Verhofstadt, the European parliament’s Brexit coordinator, that the UK government’s word could be depended upon.

In an unusual move, the European parliament’s main parties announced on Tuesday morning that they had drawn up an amendment to their Brexit resolution, on which MEPs will vote on Wednesday, condemning the Brexit secretary personally for damaging trust.

Verhofstadt, a former Belgian prime minister, claimed that the Brexit secretary’s comments were “unacceptable” and would provoke a wider hardening of the EU’s positions, including in the member states’ guidelines for the future relationship to be signed off by leaders on Friday.

Michael Roth, Germany’s minister for Europe, told German media he was “taken aback” that the language May had used in Brussels “differed somewhat” to what the prime minister had said in London since her return, referring in particular to the suggestion that Britain would only pay the final bill to the EU once a trade agreement had been reached. “She needs to be taking the same line in Brussels as in London,” he said.

An EU official said the guidelines for talks on future relations that had been drafted were already “Davis-proofed”, and it was clear what the consequences were if commitments were not respected.

The circulated draft includes the demand that “negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully in legal terms as quickly as possible”.

The latest draft also makes clear that talks about a future relationship will only start after an EU leaders’ summit in March, and that the leaders will make a “last call” on Friday to the British cabinet to offer a clear vision of the future.

Verhofstadt told reporters the government had made “an own goal. It is clear that the European council will be more strict now … I have seen a hardening of the position of the council and there will be a hardening of the position of the parliament.”

Under the proposed amendments to the parliament’s resolution, MEPs will claim that in calling the outcome of phase one of the negotiations a mere statement of intent, Davis’s intervention threatened “to undermine the good faith that has been built during the negotiations”.

Davis revealed details of a conversation on Tuesday afternoon with Verhofstadt, who is leading the steering group of the European parliament, which will have a veto on any future withdrawal agreement.

Davis tweeted: “Pleasure, as ever, to speak to my friend [Guy Verhofstadt] we both agreed on the importance of the joint report. Let’s work together to get it converted into legal text as soon as possible.”

What are Brexit options now? The four scenarios

If the UK has a change of heart, it could sign up to all the EU’s rules and regulations, staying in the EU’s single market and customs union. Freedom of movement would continue and the UK would keep paying into the Brussels pot. We would continue to have unfettered access to EU trade, but the pledge to “take back control” of laws, borders and money would not have been fulfilled. This is an unlikely outcome and one that may be possible only by reversing the Brexit decision, after a second referendum or election.

Britain could follow Norway, which is in the single market, is subject to freedom of movement rules and pays a fee to Brussels – but is outside the customs union. That combination would tie Britain to EU regulations but allow it to sign trade deals of its own. A “Norway-minus” deal is more likely. That would see the UK leave the single market and customs union and end free movement of people. But Britain would align its rules and regulations with Brussels, hoping this would allow a greater degree of market access. The UK would still be subject to EU rules.

A comprehensive trade deal like the one handed to Canada would help British traders, as it would lower or eliminate tariffs. But there would be little on offer for the UK services industry. It is a bad outcome for financial services. Such a deal would leave Britain free to diverge from EU rules and regulations but that in turn would lead to border checks and the rise of other “non-tariff barriers” to trade. It would leave Britain free to forge new trade deals with other nations. Many in Brussels see this as a likely outcome, based on Theresa May’s direction so far.

Britain leaves with no trade deal, meaning that all trade is governed by World Trade Organisation rules. Tariffs would be high, queues at the border long and the Irish border issue severe. In the short term, British aircraft might be unable to fly to some European destinations. The UK would quickly need to establish bilateral agreements to deal with the consquences, but the country would be free to take whatever future direction it wishes. It may need to deregulate to attract international business – a very different future and a lot of disruption.

Davis made his inflammatory comments on Sunday in response to reports that the British government had told some hardline Brexiters that assurances that Northern Ireland would maintain full alignment with EU law in future were meaningless.

The Brexit secretary said the joint agreement struck with the European commission on the Irish border, citizens’ rights and the financial settlement was “more a statement of intent than it was a legally enforceable thing”.

The comments caused consternation in Dublin and prompted the European commission to remind the prime minister in a statement that she had “shaken hands” on a “gentlemen’s agreement” last Friday.

Davis subsequently told LBC radio on Monday that his comments had been misinterpreted and twisted. EU leaders will meet on Friday without May to discuss the UK’s Brexit transition and future agreement.

The next phase of Brexit talks “will be a furious race against time”, said the head of the European council, Donald Tusk, highlighting that only 10 months remain to strike a divorce deal to allow time for it to be ratified before Brexit day.