That was the reset that was

I’m not quite sure when ‘the reset’ became used as a noun to denote a definite moment within UK-EU relations. The notion of ‘resetting’ as a verb was certainly floating around before the election, but the first record I can find of it being as a noun was at the European Political Community Summit hosted in the UK last July. As for the reset being tied to a specific event, namely the UK-EU Summit that was held this week, that only began in February of this year, in the context of Keir Starmer’s attendance at a meeting with EU leaders at a defence and security summit, and the wider context of the dramatic re-arrival of Donald Trump in the White House.

I remarked at the time that it was unclear how realistic this timescale was, given the scope of things which would need to be agreed for the Summit to produce a reset worthy of the name. Now the UK-EU Summit has been held and, after all the speculation, we know the details of what has been agreed which are set out in the Joint Statement, the Renewed Agenda for Cooperation and the text of a political agreement for a Security and Defence Partnership, along with a Q&A document relating to these.

These have been widely reported, and there are several summaries, including from the BBC and Politico, as well as some excellent analyses including, from a legal perspective, that of Professor Steve Peers on his EU Law Analysis blog and, from a more political perspective, that of Anton Spisak of the Centre for European Reform on his personal Substack newsletter. Given that there is so much already written, I won’t provide another summary here. Instead, I will seek to evaluate what was agreed, taking in some but not all of the details, and how it relates to the wider Brexit saga.

Evaluating the reset Summit

In a recent post I set out some parameters which can be used for that evaluation:

“On one account, what will be announced will be a “new strategic partnership”, encompassing trade and security, and more or less explicitly configured as a response to Donald Trump. On another account, the accent will be on defence and security, with something more like a roadmap for discussion of economic issues, although some reports suggest an extension to the existing fisheries agreement will be announced. The first framing would suggest an explicit shift of geo-political strategy, the second a more ambiguous and less ambitious moment, defining future processes more than providing a statement of intent. Or, to put it another way, one would be a bold and dramatic event, the other a rather boring technocratic adjustment. The issue is not just a matter of symbolism, however. The detailed provisions will matter, not so much in terms of immediate agreements but in terms of the scale and scope of what is identified to be within the ambit of mutually desired agreements. Thus there is a matrix of possibilities according to whether the framing is dramatic and strategic, or dull and technocratic; and whether the scope of possible agreements is extensive or limited.”

Judged in these terms, the agreement falls somewhat between the two framings. The phrase “new strategic partnership” does feature centrally in the Joint Statement that followed the Summit. However, in content terms, what has been agreed is much more like the second framing. As expected, the central part of what was agreed was the Security and Defence Partnership (although there are many details to be worked out). That is important but not unexpected, and Anton Spisak points out that is not the bespoke “security package” Labour had originally sought but a fairly typical EU-third country partnership.

In the non-defence sphere, it was indeed true that there was an extension of the current fisheries agreement contained within the Trade and Cooperation Agreement (TCA), which was due to be re-negotiated in 2026, through until 2038. There was also an agreement to extend the TCA energy provisions, which were due to expire in 2026, until 2027 and to do so on an annual basis thereafter. Since these were both consolidations of the existing agreement, they cannot be described in terms of a new strategic framing; indeed, they scarcely warrant the term ‘reset’. Nothing else within the non-defence sphere was definitively agreed, but a long list of possibilities and aspirations was identified.

In terms of the scale and scope of these, most of the things expected were mentioned. An extensive Sanitary and Phytosanitary (SPS) agreement seems to be the most definite, although (again as expected) details and timescale remain under negotiation. One thing which is now explicit is that the government will agree to dynamic alignment of SPS regulations, with a role for the ECJ. It’s true that everyone who knew anything about it knew that was going to happen (if there was to be an SPS agreement at all) but the government had never overtly recognized that. There is also a commitment to work towards a Youth Experience Scheme (meaning some version of a Youth Mobility Scheme), which was expected, but the mention of also working towards the UK participating in Erasmus+ was more surprising (given previous negative comments from the government).

Expected, but with less confidence, was a commitment to work towards linking Carbon Border Adjustment Mechanisms (CBAM) and Emission Trading Schemes (ETS), which has been discussed by commentators for some years but hadn’t featured very explicitly in Labour’s plans. Perhaps less expected, although the idea has certainly been floating around, was a commitment to explore the possibility of the UK participating in the EU’s internal electricity market. In all these areas, as with SPS, if there are agreements then they will entail dynamic alignment of regulations and a role for the ECJ.

The presence of the latter possible agreements takes the reset above the minimal level of what might have been contained (although they also grow out of possibilities contained within the TCA). But there was no mention of participation in the REACH chemicals regulation system  (something once touted as a possibility by Rachel Reeves) nor of accession to the PEM Convention on rules of origin (something called for by Stella Creasy, chair of the Labour Movement for Europe). It is also of note that of the three specific goals for the reset which have been Labour’s stated aims since before the election, SPS is the only one which looks likely to come to fruition. The other two (mutual recognition of professional qualifications, and a mobility agreement for touring artists), which were always unlikely to be agreed, were mentioned but only in vague terms.

So, overall, in terms of the evaluative parameters I proposed, on the framing criterion, it was closer to the technocratic than the strategic, and was mostly a roadmap for discussion of possible agreements. In terms of the scale and scope of what that roadmap contained, it was towards the middle of what might reasonably have been expected, although it should again be stressed that it was minimal in terms of the announcement of actual agreements (as opposed to possible agreements). Moreover, there is a distinct lack of precise timescales or even defined processes for reaching these agreements and, as a result, very little sense of urgency. In that sense, whilst somewhere in the middle, it is closer to the minimal than the maximal end on the ‘scale and scope’ criterion.

A step forward?

If that seems rather underwhelming, it doesn’t mean that the reset was unimportant, for two reasons. One is that it does set in train ongoing negotiations, so that ‘resetting’ will continue. In a way, that was always going to happen, in the sense that the UK-EU relationship is bound to be the subject of ongoing negotiation, but what is distinctive about ‘resetting’ is that the direction of travel, even if very slow, is, for now, towards closer integration.

The other reason it matters is that a Tory government could never have hosted an event like this Summit. That is despite that fact that, at least under Sunak, the direction of travel was similar. That’s shown by the Windsor Framework, what ended up being the very limited scrapping of Retained EU Law, the agreement with Frontex, and the return to Horizon and Copernicus. But Sunak (or any other Tory leader) would have baulked at the concept of a reset and the symbolism and language of this Summit.

In this way, the reset is a step forward of sorts. Along with the different tone that has been evident since the election, it does mark a break with the highly antagonistic years since the referendum. It accepts, overtly, the reality that the EU is a regulatory hegemon, and in the process discards the Brexiters’ taboo against dynamic alignment. Similarly, it demonstrates a recognition of one of the basic flaws of Brexit, namely its failure to grasp the realities of geography. Assuming they happen, both the SPS agreement and the CBAM/ETS linkage will, in terms of the much-discussed choice between the EU and the US, be a choice for the EU.

But – and with Brexit there is always a ‘but’ – what is equally striking is that, as well as being relatively modest in framing and scope, the government has presented the reset in distinctly ‘Brexity’ terms. In particular, Starmer presented it, alongside the recent deals with the US and India, in terms of Britain being “an independent, sovereign nation” which “is back on the world stage”, whilst Reeves talked of the reset meaning that (again in conjunction with trade deals with other countries) Britain is in a better position on trade “than any other country in the world”.

No doubt, tactically, this is meant to spike the attacks on the reset made by Brexiters. In a similar way, the language of “ruthless pragmatism” that Nick Thomas-Symonds has been using for some time can be read as an attempt to position the Brexiter attacks as ‘ideological’ rather than practical. And, indeed, the other general way the reset has been presented by the government is in terms of the practical ways that it will make life better for British people.

Political reaction

All that is fair enough, in a tactical sense, but it doesn’t fundamentally challenge the validity of the Brexiter attacks, which have indeed been ferocious as well as wholly predictable. So, whilst Starmer spoke of the deal “releasing us from the tired arguments of the past” it has done no such thing.

Instead, once again, the airwaves have been full of the obnoxious, clichéd language of “surrender”, “betrayal”, and violation of “the will of the people”. And, once again, any semblance of honesty has disappeared (examples include claims that 80 million people will come to the UK under the Youth Experience Scheme, or that the UK would have had complete control of its fishing waters in 2026 - both made by Boris Johnson, amongst others). It has come from all the usual people (including not just Johnson, but Nigel Farage, David Frost, and Kemi Badenoch) and in all the usual places (including the Telegraph, Express, Mail, and GB News). And, just as in the past, they have set the agenda for the ‘non-partisan media’ such as the BBC, Sky, and ITV (yes, of course I know the questions that begs but, still, they are not partisan in the way of the Brexiter outlets I just mentioned).

It's tempting to think that this is just the last gasp of the Brexit dinosaurs, and that, as Adam Bienkov puts it, their “screaming” is so loud because they know “the public has changed its mind”. After all, 66% of the public support a closer relationship with the EU without rejoining it (or the single market or customs union), which is exactly Labour’s policy, and business groups are very positive. I’m not so sure, if only because public responses to questions about ‘a closer relationship’ may be quite fluid when that is re-presented as ‘betrayal’ and ‘surrender’ [1]. At all events, whether or not that is the reason, polling since the Summit shows only 29% think it is a good deal, and 23% think it is a bad deal (the largest group, 30%, don’t know).

That is hardly a ringing endorsement of the policy, and one big problem is that, for all the government talk of the agreement making life better for ordinary people, it will be a long time before there is any tangible benefit. This, I think, has been an under-appreciated point in much of the media discussion this week, partly because the government focussed on having ‘done’ a deal and its opponents on it being a betrayal. But, to be ‘ruthlessly pragmatic’, the reality is that it will certainly be months, and very probably years, before it is both fully agreed and fully implemented.

For the SPS agreement, in particular, this means it will be a long time before businesses find trading easier (and for some it will be, or already is, too late) and before consumers see benefits in terms of price and choice. Meanwhile there will presumably be no further implementation of import controls (there are already reported plans to sell off border facilities), and so the heightened risks of dangerous or sub-standard goods entering Britain will continue. Moreover, SPS aside, even if all the possible agreements come to be made, they will each happen within their own timescales and come into operation piecemeal. Thus, in practical terms, the reset will not take place in a single moment, and will come long after public opinion of it as ‘an event’ has been established.

Brexiters are still shaping the debate

So, in that context, it really does matter how it is talked about now, and in the coming days, and the fact is that, so far, the Brexiters have shaped the main media ‘talking point’ of whether or not the reset was a ‘betrayal’. That has partly been facilitated by the fact that the only major definitive economic agreement of the Summit was the extension of the fisheries deal (negotiated by Frost and Johnson) for twelve years. This isn’t some terrible thing, not least because it gives fishers some certainty for planning and, anyway, they will benefit from an SPS agreement, when it comes. But whilst government ministers have tried to make those points, by having to do so they necessarily cede pivotal position to the ‘debate’ about betrayal, and have allowed the emotive and, for Brexiters, talismanic issue of fishing to be the pivotal policy area within that debate.

But even leaving aside the fisheries issue, the government’s approach has a more general problem. Responding to, or trying to pre-empt, the accusation of betrayal in terms of Britain’s world standing, or even its pragmatic interests, talks past the underlying meaning of that accusation. The first response accepts that betrayal of Brexit might, in principle, be possible, even if the reset is not, in fact, evidence of it. The second response implies that pragmatism can over-ride principles, leaving intact the possibility that a betrayal has occurred but justifying it on the grounds of practical exigencies.

Moreover, the way the Summit was talked about by the government remained primarily transactional and apprehended in terms of ‘tough negotiations’ which ‘went right down to the wire’. It is all very similar to the way the Brexit negotiations were presented and, for that matter, the way that relations with the EU were reported in the years when the UK was still a member state. And of course, as a result, it means that terms like ‘surrender’ continue to have currency, since they are the logically-entailed flip-side of the boasts of tough negotiations to ‘get the best deal for Britain’.

Stale, failed arguments

Yet the Brexiters really do not have a leg to stand on. Invocations of the ‘will of the people’, referencing the 2016 referendum, were always grotesque but are now utterly redundant. If it ever had any substance, the will of the people was satisfied when the UK left the EU, and any mandate the referendum had was fully and finally discharged at that point. It is simply dishonest to pretend that it provides some democratic hold over the form of UK-EU relations now and forever more. By contrast, Labour won the last election on its very limited reset policy, and has a mandate for that.

Beyond that, all the talk of betrayal and surrender is fatuous. Coming from Reform and some of the Tory Ultras that fatuity is obvious not least because they had already denounced the Johnson-Frost Brexit as a betrayal and a surrender. Just how often can something be betrayed before the accusation ceases to have any meaning at all?

Coming from Tories, like Badenoch, who formed the last government it is fatuous because they know full well that, when in power, they barely diverged from EU regulations at all, including SPS regulations, and so in practice Britain was already a ‘rule-taker’ (and, to be fair, Starmer made this point very clearly in the Commons debate). They also know that, as mentioned above, their own government was set on its own slow path towards closer relations with the EU. Now, out of government, they are free to join Farage et al. in all the old delusions of an undeliverable ‘true’ or ‘pure’ Brexit, including, on fisheries specifically, the false promise of complete control of fishing waters.

There won’t be another reset

Of course, all of this nonsense would be trotted out by the usual suspects whatever the Labour government did or said. This could be seen as a justification for the timidity of the reset, since it shows just how much vitriol even the most minimal changes attract. Some may argue that, given this is so, Labour might just as well be much bolder. That’s a reasonable argument if it means seeking the most maximal reset compatible with the Labour ‘red lines’. But if it means abandoning those red lines, that would be politically naïve. For doing that would provide the Brexiters with ‘a leg to stand on’, given how clearly and repeatedly Labour pledged to hold to them. And, yes, the next response would be to say that Labour was foolish to do so – but the reasons at the time were well-known and widely-discussed and, now, we are where we are.

In setting Labour’s red lines, Starmer accepted the basic parameters of the Conservatives' Brexit, but that doesn’t mean the Brexiters have accepted that acceptance, and the reality is that they never will. The reason for that is because actually, as has been obvious since 2016, the Brexiters will never accept any version of Brexit. Nothing will ever satisfy them, partly because what they want is not practically possible but mainly because they don’t want to be satisfied, they want to be outraged; and Brexit will always be a betrayal for them because they want to be betrayed.

From this perspective, this reset Summit reveals that Starmer’s approach to Brexit, whatever tactical rationale it may have, is strategically incoherent. It recognizes the geographical, economic and regulatory realities which doom Brexit to failure, and yet it places major constraints on what can be done to address them. Equally, it seeks to neutralize the attacks of Brexiters by accepting their basic parameters, and yet by doing so allows the basis for those attacks to flourish unchallenged. In this way, as foreshadowed at the end of last week’s post, the (naïve) possibility I expressed in the post before that, of the reset with the EU being used to reset the domestic politics of Brexit, has evaporated.

Much of this was already obvious. But once resetting relations with the EU became configured as ‘the reset’, and then tied to this week’s Summit, it became a specific ‘moment’ which would tell us, definitively, what Labour’s European policy will be. What is on (and not on) the agenda for UK-EU relations for the next few years will not, now, change. There will be more summits, and ‘resetting’ will continue, but, at least for the present government, there can only be one ‘reset’ moment. And now it’s over.

 

Note

[1] I think this reflects an underlying problem with many opinion polls about Brexit. Even after all these years when it has been such a huge issue, almost no one in the public (and fewer than might be expected in the media) actually understand even the most basic things about what membership and non-membership of the EU mean, right down to what a single market, let alone a customs union, means. As a result, public opinion is very easily manipulated by, and vulnerable to, political dishonesty (e.g. ‘closer relations’ can readily be rearticulated as ‘subjugation’), making opinion poll results rather unreliable.

Because of the Summit being held this week, this post comes only one week after my last one. Unless something unexpected happens, I will now revert to the usual fortnightly timetable i.e. the next post will be on Friday 6 June.

Not dealing with Brexitism

It’s hard to keep up with what is happening in the world of trade, even just considering those aspects which have a direct or indirect Brexit connection. Since my last post, there has been a flurry of activity, including a deal, of sorts, between the US and China which, for now at least, seems to mark a truce in their trade war. That, along with some other developments, suggests that Trump is now desperate to row back on the chaos that his ‘Liberation Day tariffs’ unleashed. On the other hand, there are signs that he proposes to double down on his hostility to the EU.

The recently announced UK-US ‘trade deal’ is one, relatively minor, aspect of these developments. It, too, is evidence of Trump’s backtracking, and it could be read as part of an attempt by him to increase divisions between the UK and the EU. At all events, along with the UK-India deal, it forms the background to next week’s UK-EU Summit. The outcome of that may, whether in what it does or what it does not achieve, mark a new phase in the Brexit saga, but there is little sign of Britain dealing with 'Brexitism'.

The UK-US ‘trade deal’

As always with anything Brexit-related, it’s a big task just to strip away the lies, half-truths and misunderstandings, and that becomes even more difficult when Donald Trump is involved. When the deal was announced, both Trump and Keir Starmer talked as if it was a historic breakthrough, and suggested that it was the long-touted post-Brexit Free Trade Agreement (FTA). It was nothing of the sort, and nor was it ever going to be. As I explained in a post last November, when Trump’s tariffs had not been announced but were in prospect, if it was going to be anything it would be an ‘exemption deal’, meaning that it would exempt the UK from some, if not all, of Trump’s new tariffs.

The difference is significant, not least because it means that the best it could achieve would be a return to the status quo ante. That is, it might avoid Trump’s new tariffs but not improve the terms of trade that had already existed. To an extent, at least, that is what has happened. In headline terms, the new blanket 10% ‘reciprocal tariff’ remains on all goods, but the 25% tariff on cars has been removed up to a quota of 100,000 vehicles sold per year (but these will still be liable to the 10% tariff). The 25% tariff on steel and aluminium has also been scrapped, but it seems there will also be some quota limit on that (the details are not clear). In return, the UK has agreed to scrap tariffs on an increased quota of US beef (with some reciprocal increase in access to the US beef market), and to scrap tariffs on US ethanol within a high quota.

So, a very limited deal. But, as quickly emerged when the text was published, it is not even a deal, in the sense that it is (explicitly) not a legally binding agreement and that many details are still to be agreed, most glaringly, perhaps, in relation to pharmaceuticals trade. As Alison Morrow of CNN Business put it, it is not so much as deal as “a concept of a deal”. That isn’t to say that none of it will come into effect, because there is evidently some political commitment to it. So at least some of it very probably will. But given Trump’s proven unreliability to stick to the terms even of legally binding deals, it is even harder to be confident that he will honour, or even continue to recognize, any political commitments.

That it happened at all reflects the weakness and neediness of both sides. Unlike the EU or China, the UK is simply not strong enough to take on the US in a trade war. The UK also has a pressing political and economic need to shield its car and steel industries from Trump’s tariffs. But the US is weak too. Trump’s tariff policy has backfired on him very badly, and, as I suggested recently, that has made him keen to start ‘doing deals’ with his victims so as to give the impression that this had been his strategy all along, and to reverse some of the damage he has inflicted on himself and the US economy. Thus, as many commentators noted once it had been announced, Trump needed a deal, and quickly.  

The timing may also have reflected a desire to make an announcement on VE Day so as to get in some sanctimonious references to the wartime alliance and the ‘special relationship’ or at least, since Trump’s ego is considerably greater than his grasp of detail, to ‘historic’ events. Timing aside, the terms of this trade non-deal also reflected the neediness of both parties. The UK has not had to make any of the concessions that had been speculated about on tech firm regulation and taxation, or on food standards (there will be cheaper US beef, but it will not be ‘hormone-treated’), a point I’ll come back to. The UK also resisted demands to reduce pork tariffs. To that extent, the reported jubilation in the Starmer government is understandable. The UK gave surprisingly little for what, at least in political terms, was quite helpful to the government.  

Nevertheless, to repeat, the overall effect is to leave the UK worse off than it was before Trump launched his tariff offensive. Starmer shouldn’t be blamed for that, as it’s highly unlikely any other outcome could have been agreed on remotely viable terms, and what was achieved is worthwhile for the car and steel industries, but in a normal world it wouldn’t be seen as a triumph. There is also a more complex issue, identified by the UK Trade Policy Observatory’s (UCTPO) analysis of the deal. Referring to an aspect which I have not mentioned so far, namely what the agreement says about supply chain security, UKTPO warn that, depending on exactly what it comes to mean in practice, it may well push the UK towards provisions which will be unpopular with China, with retaliation possible. It’s a specific illustration of another point I made in an earlier post, about how post-Brexit Britain is obliged to duck and dive between not just the US and the EU but, also, China.

Brexit dimensions

What of Brexit more generally in all this? It’s true by definition that the UK could not have agreed such a deal had it still been a member of the EU, or even if simply in a customs union with the EU. Whether it proves ‘better’ than whatever the EU agrees or doesn’t agree with the US remains to be seen. What is certainly striking is that it has wrong-footed the Brexiters (as shown, rather deliciously, by a disagreement between the Tice-Oakeshott Reform power couple). Some, at least initially, hailed it, in the way Trump did, as the post-Brexit trade deal he had always promised, although they quickly latched on to the implicit criticism of the Tories contained in that, as well as the explicit lie it entailed.

Very soon, Kemi Badenoch was complaining that the deal had “shafted” the UK (£), bemoaning that it was, indeed, not a comprehensive FTA. In short, we had the unedifying spectacle of Labour at least implying that it had delivered the key trade promise of the Brexiters, and Conservative Brexiters criticizing the government for not delivering what is simply not available for agreement with Trump, any more than it was with Biden, but pretending otherwise. It was yet another small illustration of the fundamental dishonesty Brexit has brought to British politics.

Beyond domestic politics, there’s a deeper issue in play with this deal. Again, I’ve gestured towards it in a previous post (I’m sorry to keep doing this self-referencing, but the various discussions obviously connect together, and linking to where points were previously made means I don’t have to repeat explanations or background). That issue is what all this means for ‘WTO rules’.

It’s not just that the Brexiters used to sloganize ‘Let’s Go WTO’ as a supposed alternative to any trade deal at all with the EU, or that ‘regaining our seat at the WTO’ was supposed to be some great prize, it is that their whole economic vision of post-Brexit Britain was predicated on the existence of a global trade order. Trump is now ripping that up, and both Alan Beattie, the Financial Times’ trade expert (£), and the UKTPO analysis suggest that the UK-US deal, specifically, flouts WTO principles and undermines the multi-lateral trading system.

The UK-India deal

All this came in the wake of the announcement of a UK-India trade deal. The two stories are, as BBC Economics Editor Faisal Islam argues, very likely to be related. That is, the general mayhem Trump is causing to international trade may have provided an incentive to complete what has hitherto been regarded as an “elusive” deal. However, the two deals are very different. For the UK-India deal is a trade deal, both in the sense of being a genuine FTA and of being (or at least being the basis of) a legally binding agreement. Moreover, it sits within, and does not undermine, the WTO framework. Indeed, the Centre for Inclusive Trade Policy suggests that “may be one of the biggest achievements of this agreement”.

Although the full details have yet to be published, reports based on the government’s summary of what has been agreed suggest there will be a fairly comprehensive removal of tariffs, with whisky and cars two of the UK sectors most likely to benefit, and garments and footwear amongst the benefitting Indian sectors. There’s less sign of liberalization of services trade, which some, especially in the financial services sector, had hoped for, although that is not surprising (lack of services coverage is one of the reasons why FTAs are so different to the EU single market). However, of potential importance to some UK firms, and potential controversy in India, UK access to the public procurement market should increase.

It was always anticipated that the block to this FTA would be an Indian requirement for a relaxation of UK immigration policy – something even less likely to be agreed by the present government, which is, if possible, even more obsessed with reducing immigration at whatever the economic cost than its Tory predecessors, something I will return to. That turned out not to be the case (although perhaps, had it been agreed, it might have enabled a deeper deal), and the only tangentially immigration-related issue was an agreement to exempt Indian workers on short-term visas from National Insurance Contributions (NICs).

Once again Brexiters were wrong-footed. This was a deal they had long-advocated as a Brexit prize, and Jacob Rees-Mogg greeted it as “exactly what Brexit promised”. But Kemi Badenoch latched onto the NIC provision (as, more unexpectedly, did the LibDems), either unaware of or ignoring the fact that such arrangements (which are reciprocal for UK workers) have been agreed with numerous countries in the past. Nigel Farage also weighed in, denouncing the deal as “truly appalling”, and as selling out British workers and farmers.

All this was, as with the US deal, pure opportunism (one senior Indian official was even quoted as saying that Badenoch had agreed the NIC provision in principle when she was Trade Secretary). There’s no doubt whatsoever that the Tories would have done the same deal. But the Brexiter reactions, especially Farage’s, also point to one of the biggest of the many contradictions which have run throughout the entire Brexit project, that between nativist protectionism and globalist free trade. Hence the idiotic situation that Brexiters can now regard the UK-India deal as both a vindication and a betrayal of Brexit.

A Brexit benefit?

To the extent that the deal is being claimed as a ‘Brexit benefit’, the usual arguments apply. Yes, it could only be made because the UK has left the EU. But according to official calculations its economic value, an estimated 0.1% increase to GDP after 15 years, whilst slightly greater than the FTAs with Australia (0.08%) and New Zealand (0.03%), is nugatory compared with the costs of Brexit (minus 4%). Given that Brexit has happened, there’s a case for doing such deals, but the idea that they in any way justify Brexit is absurd. In any case, it is reported in the Indian media that the ongoing EU-India trade negotiations are likely to be accelerated, again precisely because of the impetus injected by Trump’s trade mayhem.

Of course, whenever the economic deficiencies of their project are pointed out to Brexiters, they invariably fall back on some version of their ideas about sovereignty and democracy. In relation to trade deals, they used to make much of the idea that, with Brexit, the people’s representatives in parliament would ‘regain control’ over ratification of FTAs. That was always based on a false premise, because as an EU member the UK could have held parliamentary votes on FTAs made by the EU, potentially even blocking them, but it waived that right. As for the present situation, whilst it might fairly be said that the UK-US deal is so flimsy and indefinite it hardly warrants a vote, that is not true of the UK-India deal. Yet the government has stated that, in line with post-Brexit legislation and practice, there will be no vote. So that’s another supposed ‘Brexit benefit’ that has quietly been discredited.

Where does all this leave the UK-EU reset?

The short answer to that is that it leaves it exactly where it was before, except that we are now only a couple of days away from the EU Summit at which (perhaps) the tangible details of what the ‘reset’ is going to mean will be unveiled [1]. As such, most of what I wrote in my previous post still applies, but it is worth spelling out one particularly important issue. The fact that the UK-US deal explicitly affirmed that US products sold in the UK must meet UK SPS standards (i.e. no hormone-treated beef, chlorinated chicken etc.) means that there is no (new) obstacle to a UK-EU SPS agreement. This is the issue many commentators have identified as the key indication of whether the UK is going to ‘choose’ between aligning with the US or the EU. It seems to have chosen the EU (which is consistent with what the latest UKICE report shows to be the general direction of regulatory policy).  

That should not be a surprise to readers of this blog, as I’ve repeatedly argued (in the face of some sceptical responses) that it was highly unlikely that the government would agree anything with the US, or anyone else, to prevent what has always been Labour’s central, most repeatedly stated, reset ambition. It obviously remains to be seen if there will be a UK-EU SPS agreement, but the possibility remains open. I don’t think that quite amounts to the UK-US deal being a “triumph for remainers”, as Adam Bienkov argues, but it does endorse their core economic proposition of the centrality of geography to trade. Certainly the deal doesn’t mean that (taken in conjunction with the India deal) “the Rejoiner dream [has] finally died”, as pro-Brexit commentator Ambrose Pritchard-Evans claims.

Assuming there will now be a UK-EU SPS deal (in principle, if not immediately in detail), the important question is what else, if anything, gets announced next week. Over and above the widely expected defence and security pact, there are several possibilities, as outlined in my previous post, and there’s not much point in reviewing the various rumours and speculations there have been since. We’ll know soon enough.

What resetting means

That previous post attracted a certain amount of negative comment on social media. In particular, one poster on Bluesky [2] repeatedly and aggressively criticized me for having said that Labour’s red lines are fixed which, they insisted, meant I was indulging in British ‘exceptionalism’ whereby the EU was expected to make all the compromises and to find the solutions for the problems Brexit has caused the UK. It was a slightly bizarre accusation given the number of times over the last nine years I have criticized such a position, which has indeed often been in evidence. More importantly, it was simply ignorant. It is a fact that the Labour red lines have not changed, and a fact that they necessarily put a massive restriction on what can be agreed by the EU. But that certainly does not mean that there is no space for agreeing anything beyond what was negotiated by Boris Johnson and David Frost (a view which, ironically, mirrors Frost’s own criticisms of the reset).

That is for two reasons. One is that the UK under Labour does seem to have dropped one of the Johnson-Frost (and May) red lines of doctrinaire objection to any role for the ECJ and European Law. Admittedly this has never been formally stated, but, for years now, it has been notably absent from Labour’s list of red lines. If that is indeed so, it potentially opens up new areas for agreement that had been closed down by the UK, including but not limited to an SPS agreement, without entailing any concession from the EU on the need for ECJ jurisdiction. The other is that, even within its red lines, the Johnson-Frost deal was in many respects minimalistic, because of their hang-up about sovereignty in a more diffuse sense (i.e. beyond even what those red lines of necessity betokened). This is one reason why the quite expansive possibilities – possibilities envisaged by the EU quite as much as the UK – in the (non-binding) Political Declaration, which accompanied the 2019 Withdrawal Agreement, were never brought to fruition. There is now at least the potential to revisit them.

Nor, to address another repeated, and related, criticism made of that post, does doing so automatically amount to UK attempts at ‘cherry-picking’ or ‘cakeism’. Those concepts, whilst certainly highly relevant at some stages of the Brexit process (and, again, I've exhaustively catalogued and criticized this) have been rendered largely redundant since the UK became a third country to the EU. There are no cherries to try to pick, because the UK has foregone the pie. Now, the only issue is whether both the UK and the EU see it as being in their own interests to make agreements over cooperation in specific areas or participation in specific programmes. Indeed, that began to happen under the Sunak government, with the UK-Frontex deal on tackling irregular migration and the admission of the UK to the Horizon Europe and Copernicus programmes.

Trust in Starmer’s Britain?

If cherry-picking is no longer of much, if any, relevance to understanding Brexit events, new considerations have emerged. One is whether, contrary to what I have said, the UK-US deal, whilst not in its provisions affecting what the EU and UK might agree, could do so by antagonizing EU leaders. As I said above, that could well have been part of Trump’s intentions in making the deal and, even if not, the agreement hardly showed the UK standing in solidarity with other targets of Trump’s aggression. Again, I discussed this in a recent post, pondering that, if such a deal happened, it might simply be regarded by other countries as understandable realpolitik. That remains an open question, but the positive reaction to the agreement from Germany’s new Chancellor Friederich Merz might at least suggest that this is possible.

The other issue is that of domestic politics. Here, Simon Nixon makes the interesting argument that the US and India deals have provided Starmer with political cover for a maximal reset, by presenting himself as having just delivered on the Brexiters’ key trade promises. That could be so, but what is quite clear is that the Brexiters’ attack on the reset is continuing to gather force, and Badenoch has already threatened (£) to reverse anything agreed that “betrays Brexit”. Such threats are now the most potent weapon in the Brexiters’ arsenal, and they (rather than previous concerns about cherry-picking) are the most obvious disincentive to the EU to agree to a substantive reset.

Equally, the sight of Keir Starmer not just rehashing Brexiter nonsense about trade deals but now invoking their ‘taking back control’ slogan when launching this week’s morally reprehensible, politically counter-productive, and economically illiterate anti-immigration crusade is hardly likely to inspire confidence and trust from the EU. It hardly matters whether Starmer really believes what he said, or whether it is dishonesty resulting from fear of the Reform Party. Either way, quite as much as Badenoch and Farage, he is showing that ‘Brexitism’ is entrenched and that he has no intention of trying to challenge it.

I’ve referred several times to my recent posts on this blog, including the last one, and sometimes mentioned occasions where my expectations have proved accurate, or defended what I’ve written against criticisms. However I will freely admit that one of the main arguments of the last post, to the effect that Starmer had the opportunity to challenge Farage head on, and ‘reset’ domestic politics away from Brexitism, has already been shown to be hopelessly naive. It is now clear that isn’t going to happen. Next week there should be a clearer sense of whether Labour’s approach to the reset with the EU is going to be another missed opportunity to start to deal with the damage of Brexit.

 

Notes

[1] It is always worth recalling that, any reset aside, the UK has still not implemented all of the provisions of the original Withdrawal Agreement, nor some parts of the Windsor Framework. Moreover, there is still no deal on Gibraltar, although reports this week (£) suggested (not for the first time) that one is imminent. Indeed, the resolution of outstanding issues, perhaps especially Gibraltar, may well be part of the conditions for a reset of any significance.

[2] In line with my normal practice of not ‘punching down’ by linking to individual social media accounts, except when they are those of public figures, I will not identify the poster in question. In any case, some others were almost equally unpleasant.

Could the UK-EU Summit reset post-Brexit politics?

Not for the first time, Brexit is stuck in a doldrum period. There really isn’t that much going on, at least in public. Perhaps the most notable development since my previous post is the way that Canada’s newly elected leader Mark Carney compared the damage Trump is inflicting on the US with what Britain had done to itself with Brexit. It was notable not because it was contentious but, on the contrary, because it showed how Brexit has become the internationally-recognized standard measure of economic self-harm. The only real talking point is whether it is premature to apply it to Trump.  

Meanwhile, in the UK, political attention has been focused on yesterday’s various elections, whilst whatever form any ‘reset’ of UK-EU relations is going to take is shrouded in uncertainty, awaiting the Summit meeting later this month. However, with the results of those elections beginning to be known, there are good reasons to link them, at least in part, to precisely the uncertainty about the reset. In particular, the continuing Farage insurgency can be read as being in part a consequence of Labour’s attempts to de-politicise Brexit. This means that the Summit presents an opportunity not just to reset UK-EU relations, but to reset the way Brexit is, and is not, talked about within domestic politics. For until the failure of Brexit is as openly acknowledged in the UK as it is in the rest of the world, domestic politics remains stuck in its post-Brexit cul-de-sac.

The framing and scope of the Summit

The current uncertainty about the Summit is, perhaps inevitably, about the detailed provisions, about which there are many hints but, as yet, no clarity. It is also about the more symbolic issue of how its overall purpose is framed. On one account, what will be announced will be a “new strategic partnership”, encompassing trade and security, and more or less explicitly configured as a response to Donald Trump. On another account, the accent will be on defence and security, with something more like a roadmap for discussion of economic issues, although some reports suggest an extension to the existing fisheries agreement will be announced.

The first framing would suggest an explicit shift of geo-political strategy, the second a more ambiguous and less ambitious moment, defining future processes more than providing a statement of intent. Or, to put it another way, one would be a bold and dramatic event, the other a rather boring technocratic adjustment. The issue not just a matter of symbolism, however. The detailed provisions will matter, not so much in terms of immediate agreements but in terms of the scale and scope of what is identified to be within the ambit of mutually desired agreements. Thus there is a matrix of possibilities according to whether the framing is dramatic and strategic, or dull and technocratic; and whether the scope of possible agreements is extensive or limited.

In terms of the kinds of things likely to feature in the scope of possible agreements, it continues to seem likely that the government will manage to achieve what has always been its main reset ambition, a Sanitary and Phytosanitary (SPS) agreement. What will be more interesting is what the Summit will have to say about other, perhaps less widely trailed, issues. If media reports are correct, we already know that the EU have refused a UK request to discuss mutual recognition of conformity assessment bodies [1], but the fact that the request was made, and discussed at high level, suggests that the government might have a more maximalist agenda than has been publicly articulated.

Might that include seeking to join the Pan-Euro-Mediterranean (PEM) Convention, something the EU has been reported as being willing to consider? Might it include linking REACH systems of chemicals regulation? An agreement on financial services? An agreement on irregular migration? An agreement to link carbon emissions trading systems? For that matter, there is a whole possible agenda of cooperation on energy and climate change, as set out in a new report last week by the Independent Commission on UK-EU relations.

What now seems highly likely to be within scope is some form of Youth Mobility Scheme (YMS), though probably not called by this name, and there have recently been strong hints that this will happen. It is not surprising, because some agreement on this was the main EU requirement. It was therefore a folly on the government’s part that it did not embrace it positively from the outset. Indeed even now, when it is being briefed that it will happen, it is also being denied by the government.

The folly lies in losing the opportunity to demonstrate to the EU that, under Labour, the Brexity mindset has changed and, equally, in failing to challenge that mindset at home. As a result, even the limited scheme which seems likely to emerge is being described in the Brexiter media as a “migration bombshell”, and will no doubt also be presented as having been inflicted upon the UK by the EU rather than being in the mutual interests of both. More generally, the reset as a whole is already being decried in the pro-Brexit media as carrying “the stench of betrayal”, as the “backlash” against it, which I discussed last December, gathers force.

The ‘make Brexit boring’ tactic

There’s little the government could do to prevent such attacks, but it could do far more to spike the batteries of their attackers by setting out its European policy in a more positive, inspiring, way. That is especially so in the run-up to the Summit, which is going to bring the Brexiters’ full guns out, but there is little sign of it happening.

For example, writing recently in the Guardian, Europe Minister Nick Thomas-Symonds seemed at pains to make the government’s plans sound as dull and uninspiring as they could possibly be, telling us, not for the first time, that they will be guided only by “ruthless pragmatism”. At one level, this is understandable, and it would be hypocritical of me to criticize it. In July 2022 I argued for the merits of Labour taking an approach of “making Brexit boring”, and in July 2021 for a “pragmatic ‘better deal for Britain’ policy”. (I’m not suggesting that Labour’s strategists based their thinking on my blog, but if they had done then it wouldn’t look much different to what they have done in government.)

Nevertheless, the world has changed very considerably since 2021 and 2022, and even since the election last year, and that mandates, if not demands, some recalibration on policy. I don’t mean revisiting the ‘red lines’ – there is no way that doing so would be politically viable for Labour in this parliament – but rather the provision of a more upbeat and less apologetic framing. This is obviously partly justified because of the new world created by Trump, and all that means, both economically and geo-politically. It is also justified by public support for closer relations with the EU being strong. And it is further justified because it is now abundantly clear, not least from the emerging results of yesterday’s elections, that new and better ways of countering Nigel Farage’s insurgency need to be found.

As regards the latter, Thomas-Symonds misses the point when he rehearses the government’s standard line that its European policy “isn’t about politics – it’s about pragmatism” and that Britain under Labour “won’t be defined by debates and arguments of the past”. The idea, obviously, is to present the reset as series of technical fixes, free of the toxicity of Brexit. But Farage and his admirers in the Tory Party and the pro-Brexit parts of the media are still engaged in those debates and arguments.

Thus, however much the government insists it is being ‘pragmatic’ about Brexit, the Brexiters still operate within the terrain of sabotage and betrayal. And that is open to them in part because the government treats it as too politically dangerous to say what is just common knowledge around the world: that Brexit was neither sabotaged nor betrayed, it was just a terrible idea, and that is why it went so horribly wrong. The very attempt to ‘leave behind’ the politics of Brexit has the consequence of leaving them in place.

Taking on Farage

The result, and this is the key point, is that Brexit going horribly wrong has not reduced the appeal of a politics which ignores what is pragmatically possible, and indeed trades on doing so. Brexit has not discredited Farage, despite its failure, a failure which he openly acknowledges but has been allowed to slough off as the fault and responsibility of others. This leaves him free to espouse, and to garner considerable electoral support for, policies which are equally unrealistic. There are several of these, but the most obvious is the policy to leave the European Convention of Human Rights (ECHR), which, as he recently repeated, is literally the first thing he would do if he became Prime Minister. It is also, of course, a policy with much appeal in the Tory Party, and it is not at all inconceivable that, whether led by Kemi Badenoch or someone else, this will also be their policy at the next election.

Obviously there are many arguments of principle against such a policy, but, equally importantly, there are many pragmatic reasons which would make it an unworkable one, the implications for Northern Ireland and the Good Friday Agreement being only the first of them. And there is clearly a direct parallel here with Brexit, because whereas its implications for Northern Ireland were either ignored or dismissed by the Brexiters in 2016, in practice they proved to be absolutely central to the practicalities of ‘getting Brexit done’ and, to the Brexiters’ chagrin, were a major reason why, in their terms, Brexit was not done properly. It is all too easy to imagine Farage in the future, with ECHR derogation achieved and wreaking havoc, blithely dismissing the consequences as someone else’s fault.

Thus, with Brexit having neither silenced nor sidelined Farage, one important way to challenge him now is to refuse to allow him to evade responsibility for the policy he spent most of his political life advocating, and to refuse to allow him, as with the ECHR, to continue to advocate flawed, impractical policies without being reminded of that history every single time he does so. The same applies to his anti-immigration policy, given that the levels of legal migration he now complains about are the result of the post-Brexit “Aussie-style points system” he once advocated, and that the levels of irregular migration are in part the result of his advocacy of the UK’s departure from EU agreements.

From this perspective, the government’s approach, as articulated by Thomas-Symonds, is counter-productive. The politics that brought us Brexit have not disappeared with Brexit. And whilst it is true that pragmatism is needed, that is not as an alternative to a political framing but ought to be the political framing: a politics which thrives on promising what cannot pragmatically be delivered as policy is the basis for a bad politics. Bad morally, because it is dishonest; but, because it is dishonest, also bad politically, as it corrodes trust and, ultimately, corrodes democratic politics itself.

Back to the reset

In terms of the reset, then, this would mean not so much a different policy but a very different, and much more honest, articulation of that policy (perhaps including dropping the rather dull terminology of ‘the reset’). It would acknowledge, in explicit terms, as it does implicitly already, that Brexit was a mistake. Most people think that anyway, and few can doubt that Starmer does. It would also acknowledge that it is a mistake that cannot simply be reversed, at least until there is a durable cross-party consensus sufficient to give the EU confidence in a joining process, and a genuine public enthusiasm for EU membership (which isn’t just a matter of thinking Brexit damaged the economy). And it would be unapologetic that a substantially improved and deepened UK-EU relationship is the best, and currently the only, position in the face of those two realities.

Articulated in this way, other things which are currently only implicit would also fall into place. Most obvious of these is the already fairly explicit fact that the UK’s primary defence and security theatre is European. The Global Britain of the 2021 Integrated Review of Security, Defence, Development and Foreign Policy which, as I discussed at the time, sought to deny that, has already been substantially discarded by the 2023 Integrated Review Refresh, in large part because of the Ukraine War.

Now, the impact of Trump 2.0 has been to make even that largely obsolete, which will presumably be reflected in the Strategic Defence Review and the National Security Strategy, both to be published soon. Given the timing of the Summit, there is now a perfect opportunity to tie together European policy and defence policy. That is already the clear direction of travel, but the more overt it is the more strategic clarity there will be, whilst politically creating a challenge to Reform and the Tories to publicly prioritise their Brexit obsessions above the UK’s defence interests.

Less explicit, but increasingly obvious, is that the UK will prioritise its economic relationship with the EU above that with the US. That will be all the more obvious if there is a UK-EU SPS deal, which would all but certainly preclude a comprehensive Free Trade Agreement with the US. Making this more explicit need not mean abandoning any attempt at an ‘economic deal’ with the US to avoid some of Trump’s tariffs, but would show where the UK’s priorities lay.

Rachel Reeves came close to doing just this last week, saying “actually our trading relationship with Europe is arguably even more important, because they're our nearest neighbours and trading partners" but, apart from the fact that there is no ‘arguably’ about it, she was immediately undermined when “Downing Street” refused to endorse her comment (£). It’s ridiculous, but it is also politically maladroit, because it leaves the Brexiters free to present Reeves’ comments as ‘sparking outrage’, and of having led to her being “scolded” for making them, and thereby to continue to insist that a US trade deal is a great prize and should be the main priority.

Of course, they would do that anyway but (as with YMS) their attack lines land far more easily because of the government’s lack of consistency and clarity (although they are made all the more absurd by Trump’s own consistent inconsistency about doing a deal with the UK, displayed again this week). Again, this can’t be separated from Brexit, and the politics of impractical promises. A Free Trade Agreement with the US was never very likely, remains unlikely under Trump and, in any case, would be of very little economic value. If it ever did happen, it would also come with very unpopular consequences, including possibly for food standards and the NHS. It was, after all, the Brexiters who, in 2016, held up the then mooted US-EU TTIP deal as one of the reasons to leave the EU, albeit that their claims about it were largely fallacious.

So here again the refusal to ‘revisit the politics of the past’ now hamstrings Labour’s ability to engage in the politics of the present, a politics in which the present nonsense being talked about a US trade deal by Kemi Badenoch and Nigel Farage ought to be challenged in part by pointing to their past record of being utterly wrong about it.

The forthcoming Summit represents the perfect moment for the government to shift to this much more full-throated articulation of its post-Brexit strategy. Indeed, if this opportunity is not taken it is hard to see the shift ever happening. In the terms I put it earlier, that would mean framing the Summit as a moment of dramatic, strategic choice, accompanied by as extensive an agenda for new agreements as will be entertained by the EU.

The alternative would be to continue with the current approach, which in my previous post I compared with that of the spivish, dodgy businessman Arthur Daley. The unsurprising consequence of that approach is to give the impression that the government has something to hide, or to apologize for, or of which it is ashamed. That impression does not just damage the government’s credibility internationally, it also does so with voters. This necessarily assists the Brexiters, who want to make precisely the charge that the government is hiding its true agenda (i.e. rejoining by stealth). At the same time, it alienates the majority of Labour supporters (and other voters) who are all too well aware that there is no such agenda, but might find that easier to swallow if the government was less mealy-mouthed about the improvements it is pursuing.

The day before yesterday

The truism that generals always fight yesterday’s battles applies here. The decision to be fairly muted about Brexit, and to make it as dull and technocratic as possible, made tactical sense in the run-up to the 2024 election, and, at least arguably, was vindicated by the result. But it makes much less sense now, especially with the growing threat of Reform UK, as illustrated by the latest elections, because it entails silence about Farage’s ‘signature policy’. Or, more accurately, it entails silence about Farage’s political modus operandi of advocating superficially plausible and, to some, appealing policies without regard for the practicality of their implementation or the reality of their consequences.

Similarly, just as Labour are happy to keep reminding voters that the Truss mini-budget shattered the Tories’ claims to economic competence, it would be equally valid to keep alive the memory of how Brexit unmoored their claims to pragmatic government. Or, again to be more accurate, how ‘Brexitism’ did so. And, whether aimed at Reform or the Tories, the fundamental message that populist policies lead to chaos and failure is now all the easier to deliver given what is happening in Trump’s America. But it can’t be rammed home to British voters without talking about Brexit.

For Labour, now, continuing with their previous tactic amounts to fighting with one hand tied behind their back. Paradoxically, that is because whilst that tactic belongs to yesterday’s battle, its redundancy is because it ignores the past of the day before yesterday. Yet for decades Labour have been attacked for ‘having gone cap in hand to the IMF’ in 1976, and the spectre of ‘rubbish piling up in the streets’ during the Winter of Discontent is still being summoned up by their opponents. Less specifically, Labour are attacked for ‘always putting up taxes’ or ‘always borrowing too much’. They are even attacked for the policies they advocated in the ‘longest suicide note in history’ manifesto of 1983, despite not being elected. This vicious weaponization of past history has sometimes, perhaps mostly, been unjust. It has also been effective and, though without any need for injustice, Labour could learn from it by hanging Brexit around the necks of its advocates.

Once all the current election results are in there will be much analysis and agonizing about what they mean for the Labour government and for politics in general. At the same time, the coming UK-EU Summit will be a big moment in defining the nation’s post-Brexit strategy. It may, as Thomas-Symonds puts it, be guided by “ruthless pragmatism” but it could also be a ruthlessly political response to the legacy of the 2016 referendum. Being explicit about that response, including being honest about its limitations and the reasons for those limitations, might well be Labour’s best chance of seeing off Farage. It might even help to shore up Labour’s other flank, where they are vulnerable at least in part because of the constipated timidity with which the government presents its European policy.

 

Note

[1] This is not the mutual recognition of standards proposal I discussed in a recent post, but, as mentioned in passing there, the different issue of mutual recognition of conformity assessment. Sam Lowe’s Most Favoured Nation Substack newsletter provides an excellent account of this complex topic, and the reasons why the idea has been rejected by the EU. It also provides what I think is a well-founded criticism of the all-too-common tendency amongst some, usually anti-Brexit, social media commenters (including, occasionally, commenters on this blog) to automatically dismiss almost any ‘reset’ proposal as ‘cakeism’, ‘cherry-picking’, or ‘more British exceptionalism’.

Arthur Daley's Brexit

Anyone who comments in public on politics, especially in periods, such as we have now, when politics moves with such speed, is likely to have events make a fool of them. So it is perhaps unkind to recall articles such as Ross Clark’s in The Spectator (£) proclaiming that ‘Trump’s tariffs are a real Brexit win’, especially as other, far higher profile, people like Kemi Badenoch made the same claim. That claim, as mentioned in my previous post, was based on the fact that in Trump’s initial announcement of his ‘Liberation Day’ tariffs the UK was listed ‘only’ for the new baseline 10% tariff whereas the EU was listed for 20%.

In the vortex of events over the following days, Trump was forced to back down on most of his threats, with the principal exception of those to China, which accelerated (though, soon, he exempted phones and computers). For now, what is left is primarily the 10% baseline import tariff on all goods which applies to the EU and the UK (as do the 25% car, steel, and aluminum tariffs). And, with that, this “tangible benefit of Brexit that no one can ignore”, as the hapless Clark had put it, ceased to exist before it had even come into force.

The Brexit benefit that never was

Of course the wider situation of Trump and his tariff mayhem has not gone away, but, before considering that, it is worth reflecting on that fleeting moment. After all, it is perfectly possible, even likely, that something like it will reappear in some form or other if Trump treats the EU more badly than the UK. Or, in a similar way, I expect some Brexiters will see the government’s announcement this week that the UK is going to suspend some import tariffs as showing the value of being able to act independently of the EU.

At one level, this illustrates the sheer desperation of Brexiters to seize on anything which might revive public approval for their project. Their cause may no longer burn bright but, like a fire which has been quelled, there are still a few embers which, when the wind blows from the right direction, flare up into a flame. That resilience is a reminder of the Brexiters’ tenacity but, at the same time, a reminder that had Brexit been anything like the success they had promised, they would scarcely need to latch on to such transparently feeble justifications.

Yet, in doing so, they managed to wrongfoot many people. For example, Darren Jones, Chief Secretary to the Treasury, reluctantly accepted the tariff differential as a “Brexit dividend”. Others tried to refute the claim by arguing that the tariff level derived simply from Trump’s (absurd) ‘formula’, rather than being anything to do with Brexit. But that did not negate the fact that, under that formula, the UK was treated better than the EU. Nor did it, in itself, refute the claim to point out that any ‘gain’ would have been more than offset by the other costs of Brexit, although that is certainly true, since it was not formulated as demonstrating a net benefit.

A better response to the Clark-type claim would have been that Trump’s presidency has caused a crisis in the system of trade governance overseen by the WTO, in which so many Brexiters used to place such faith. More specifically, it has done so by exposing the world to the caprice and vindictiveness of a President who openly revels in making other countries “kiss my ass”, to use his own charmless words. That capriciousness means that he might just as easily have imposed a much higher rate on the UK than on the EU, and still might do so, and if in the future he reverts to imposing a lower rate on the UK than on the EU then that would be equally subject to revision.

Thus, whilst it is true that Brexit creates the possibility of the US (or anyone else) treating the UK and the EU differently as regards terms of trade, it is entirely unpredictable what this will mean in practice, and even more unpredictable in Trump’s hands. In itself, therefore, it can’t be claimed as a Brexit benefit. The possibility of differential treatment is a result of Brexit, but to call it a benefit of Brexit is just the tautological proposition that ‘Brexit is the benefit of Brexit’.

What Trump’s tariffs really tell us about Brexit

However, considering Trump’s tariffs, and especially what made him resile from his initial announcement, does tell us some important things about the damage of Brexit. Apart from the role of internal divisions in his administration, the reasons seem to have been, first, the robustness of China’s response; second, the less forceful but still firm EU response; third, the crash of the US stock market; and, fourth, the incipient crash of the US bond market.

As several people have commented, ‘Liberation Day’ can be seen as ‘America’s Brexit’ or, in a similar vein, as America’s ‘Liz Truss moment’. There has always been an umbilical cord between Brexit and Trumpism, as I have discussed before on this blog and, looking back, elsewhere, too. This latest episode shows their shared folly in over-estimating the power of the sovereign nation state and, as also shown by  Truss’s ‘Brexit mini-budget’, the consequences of pursuing policies on the assumption that this folly is the invention of ‘the Establishment’ rather than being an empirical reality.

Unsurprisingly, about the only UK economist coming out in support of what most see as Trump’s “tariff madness” is ‘Brexit brain’ Shanker Singham, Chairman of Truss’s Growth Commission. Equally unsurprisingly, Trump is now lashing out in furious Truss-type attacks on the Chairman of the Federal Reserve.

Trump has now demonstrated that even the US is not immune to the power of other countries and blocs, and it is certainly not immune to the power of the stock, bond, and currency markets. Lewis Goodall of the News Agents deserves credit for having spelt this out even before Trump’s volte-face, making the point that: “One way or another, America cannot escape the limitations and strictures the global economy places on every nation, even the most powerful. Trump may be done with globalism: globalism may not be done with him.”

That insight was validated by the climb-down, and further evidenced by the subsequent exemption of Chinese phones and computers. The US simply cannot afford to detach itself from the global economy, or at least is not willing to live with the consequences of doing so. The big lie of nationalist populism is to conjure up an image of the past (often a past that never existed, or was far less desirable than presented) and promise to recreate it via a single great, transformative national act. Brexit showed this lie. Now Trump’s ‘Liberation Day’ has shown it again. The factories aren’t going to come back to the rust belt. They were never going to, and they never will.

What this means for the UK

The fact that even the most powerful country in the world cannot make a truth of the lie of nationalist populism rams home the lesson that Brexit has made the UK a bit player in the global economy. Precisely as Brexiters were warned, although now in ways being rapidly re-shaped, that global economy consists of three main blocs, the US, China, and the EU. All of the guff about being ‘the fifth largest economy in the world’ was irrelevant in 2016 and is even more irrelevant now. So, too, is the supposed (though scarcely demonstrated) ‘nimbleness’ and ‘agility’ of operating independently of those blocs. Whereas, as a leading economic power within the EU, the UK had a major role within the global system, now it is virtually an onlooker.

I’m sure that others have made this observation, but the only commentator I have seen do so with much clarity is Robert Shrimsley of the Financial Times (£) including his point that: “Whatever the pros and cons of the EU’s policies, it is in a position to defend them should it so choose, as shown by this week’s readiness to contemplate retaliatory tariffs. The UK is not. The price of preferential treatment is readiness to play the supplicant.” To that, of course, should be added the fact that being a supplicant does not necessarily result in getting preferential treatment.

Where does that leave the UK in practical terms? Most commentators take it to mean that we must choose between the US and the EU. I’m increasingly convinced that this is a flawed formulation, albeit not for the reasons that Keir Starmer seems to believe (though, perhaps, for the reasons he is not able to say). It’s not, as Starmer says, that we ‘don’t have to make a choice’, it is that we aren’t in a position to be able to make a choice: we have no realistic alternative other than to dance around, a bit player caught between the big players over whom we have no control and very little leverage.

For what would ‘making a choice’ mean? To state the obvious, there is literally no way that the UK could become a US State (such an idea isn’t even at the level of Trump’s absurd suggestion that Canada should do so), so ‘choosing the US’ could really only mean making a trade agreement with the US, of a sort which precluded closer relations with the EU, let along rejoining. But, even supposing the most comprehensive trade agreement with the US imaginable, the economic and regulatory pull of the EU is always going to be greater.

On the other hand, and I know how much this will annoy many readers of this blog, although it isn’t literally impossible that the UK could join the EU, it is really not a practical possibility for the time being. At all events, it is undeniable that the present government is not seeking to rejoin, and in the absence of political will there is no possibility of it happening. Moreover, even if a UK government were committed to rejoining, it would take time both to agree to that policy domestically, via a referendum, and to agree and complete an accession process.

Thus, in the current unavoidable context of the whirlwind being created by Trump, the ‘choice’ is not a clearcut one, it is a messy fudge in which the government will continue to try to get closer to the EU, and closer to the US, and perhaps closer to China, all the time having to calibrate each relationship against what each of those parties will allow the UK to agree with either of the others [1]. This is the degrading ‘sovereignty’ to which the Brexiters have consigned us: an undignified attempt to duck and dive, to wheel and deal, to fawn, bluster, plead, and flatter. The figure who best represents post-Brexit Britain isn’t Drake, or Nelson, or Churchill. It’s Arthur Daley (younger and non-UK readers may need to consult Wikipedia).

Wheels within deals

By definition, such an approach does not point in any one direction, or certainly not in a predictable one. We can expect to see continued talk of the possibility of a deal with the US. There had been several  press reports (£) that the prospects of this were fading, and then J.D. Vance gave a strong indication of its possibility, though what he meant by that, and what weight can be put on it, is not clear. Some commentators read it as an attempt to put pressure on the UK to strike a deal, and especially to concede on social media regulation to do so. Others see the US seeking to use the promise of a deal to drive a wedge between the UK and the EU. It’s certainly true that doing so immediately captures UK media attention, perpetuates the false idea that a UK-US deal would be some great prize, and, in the process, immediately re-ignites the flames of Brexit, as may well be its intention.

But, in truth, it is probably not just pointless but counter-productive to try to decode the noises coming out of Washington. It’s even more obvious now than when I first wrote it that Trump exercises power by making everyone speculate, and one thing which Starmer is getting right is to avoid getting caught up in the Trump psychodrama. It’s also worth recalling that, during his first term, to the irritation of the Brexiters, Trump kept blowing hot and cold about doing a deal, and never delivered. Even if it happens, it is an open question how stable any deal could be: the ridiculous insult Brexiters used to throw at the EU, of it being a ‘protectionist racket’, would actually be far better applied to Trump’s US. The EU is a far more reliable interlocutor.  

For what it is worth, I think a limited UK-US deal is actually now more likely, because the failure of Trump’s tariff policy will make him keen to demonstrate it has, really, been successful, by doing ‘deals’ with at least some of its targets. Unpredictable as he is, the one constant about Trump is his ego, which will surely lead to some attempt to salvage what he can from what Simon Nixon calls “one of the greatest and most humiliating policy reversals in US history”. If so, it won’t be a comprehensive Free Trade Agreement and it almost certainly wouldn’t entail the UK changing its food standards, but would very likely include controversial concessions of taxation of tech firms, and reduced or zero tariffs on beef and fish [2].

We can also expect to see the UK continuing to talk up the possibilities of other trade deals, especially with India. Whether the latter will ever actually come to fruition is another matter: recent announcements that it is “90%” agreed are fairly meaningless, as they just mean that the most intractable issues remain unresolved. Again, though, it is unlikely that a deal with India would involve food standards. The reason, as with any US deal, is because a deal with the EU on Sanitary and Phyto-Sanitary (SPS) regulation has always been the government’s central goal for the reset. It has been obvious for months that this would mean agreeing to dynamic alignment and ECJ oversight and that Starmer was prepared for this, despite his reticence to spell that out. This week, I think for the first time, it has been reported that this is so. Moreover, many well-informed reports suggest that a much more maximalist reset is now on the agenda.

The real action

However, whatever the UK does or does not do, the real action will be elsewhere. Most obviously, that means the power-plays between the US, China, and the EU. That in turn may mean the creation of new international alliances, or their deepening. That is already evident in China’s discussions with Indonesia, Vietnam, Cambodia, and Malaysia, and there are numerous indications of closer cooperation between China, Japan, and South Korea, perhaps even leading to a new tri-lateral trade agreement. Meanwhile, there are at least mutterings about cooperation between the CPTPP and the EU, and it wouldn’t be all that surprising to see renewed impetus behind China’s attempts to join the CPTPP. It would be rather delicious if the ultimate legacy of Donald ‘Mr Brexit’ Trump for post-Brexit Britain was to be for it to end up in a bloc with the EU and China.

Such speculations aside, what is already happening is a rapidly deepening economic conflict between China and the US, going beyond tariffs. For example, China is shutting down exports of rare earth metals to the US, and halting imports of Boeing planes and parts. Many commentators are observing (£) that China may have the stronger hand in this conflict, whilst others are raising the possibility that it will to develop into non-economic forms, with Taiwan being an obvious military flashpoint.

These and other developments would lie largely out of the UK’s control, regardless of Brexit but, having foregone the sovereignty-magnifying, relatively safe haven, of EU membership, it is not even at the table. It is as if Arthur Daley’s manor is now aflame with gang wars and all he can do is graft a precarious living, doing dodgy deals from his lock-up garage, constantly hoping that a nice little earner will turn up. The real power lies elsewhere, and he doesn’t even have his minder any more.

 

Notes

[1] The UK-China relationship is a complicated one, and has been, with or without Brexit, for some years. Events just this week, in relation to the Scunthorpe steel plant, show its fractiousness, and the near inseparability of specifically economic issues and the general political relationship. That fractiousness, and more, extends deeply into security issues. There is a good summary (though predating Scunthorpe) of the current relationship by George Magnus of Oxford University’s China Centre, and a more detailed research briefing from the House of Commons Library. The general point I would make is that Brexit has in no way made this relationship better or easier for the UK to navigate. Rather, it is a third pole, along with the US and the EU, around which the UK must dance a solitary dance. On the specific point of how the UK’s relationship with any one of these poles may be constrained by another of them, which is quite obvious as regards UK-US-EU, there are already signs that the US will seek to dictate what the UK (and others) agree with China. What kind of things might China want of the UK? That, no doubt, is in flux because of the US-China trade war, and I haven’t been able to find much information on it, but a 2021 report from the Council on Geostrategy gives some insights.

[2] I’m sticking to my guns on this, despite an excellent comment made by the poster ‘Andrew V’. He makes the point, which I had missed, that UK food standards were explicitly named as part of the reason for Trump’s ‘reciprocal tariffs’ (this reflects his more general approach of trying to use tariffs to counter both tariff and non-tariff barriers to US exports). The implication, then, might be that dropping these standards would be a necessary condition of an exemption deal to waive the new 10% tariff, rather than, as I had argued, only something that would come into play in a comprehensive Free Trade Agreement. However, to the extent that the 10% tariff is being applied universally (plus some, now delayed, top ups) it implies that it is being levied independently of any specific so-called ‘abuses’, and the UK food standards were listed simply as an example of the kind of NTBs the US faces (and as one of many longstanding US grievances). But, frankly, who can tell with Trump? At all events, as noted above, it seems highly improbable that the UK would agree anything with the US at this point which would preclude an SPS agreement with the EU, not least because of the additional problems doing so would create for Northern Ireland. Time will tell ….