As reported in the Financial Times:
Both sides in the Brexit trade talks signed off their negotiating mandates on Tuesday, paving the way for the opening of formal discussions next week.
We already know there are fundamental differences to bridge: the UK says it wants no compromise when it comes to setting its own rules on trade and no regulatory oversight by Brussels, while the EU wants reassurances that Britain won’t diverge from its regulatory standards on issues such as state aid for businesses and labour laws.
Despite this yawning gap and the limited time available to close it, David Davis, the former Brexit secretary, is one pro-Brexit politician who is confident the two sides will clinch a deal before the end of the Brexit transition on January 1 2021.
In an interview with Brexit Briefing, Mr Davis said he fully supported the tougher stance Boris Johnson had taken since winning the election in December, particularly on the so-called level playing field, adding that the French were pushing for a toughening of the EU stance because they were wedded to a “lunatic mythology” that Britain is out to undercut the eurozone on regulation.
Brexit Briefing: You advocated the Canada-style deal while Brexit secretary. Do you feel vindicated that Boris Johnson is now pursuing a Canada-style trade deal?
David Davis: “Vindicated? Why should you feel vindicated when you are stating the bleeding obvious. I always thought the likely fallback position would be something that was similar to Canada. The EU thought at that point the Canada deal was its best in class.
“It is the right decision. I discussed this with Boris in headline terms when I was in cabinet and he was the one person in cabinet who supported the firmer line. He used to get exasperated — as did I — so I wasn’t surprised that he has pursued a harder negotiating line.”
BB: But Michel Barnier (EU chief Brexit negotiator) says the UK can’t expect the same treatment as Canada because of the close trading relationship between the UK and EU and the geographical proximity?
DD: “This is a very new argument that has come up since the Withdrawal Agreement has gone through. They are not negotiating in good faith. I don’t find it a very impressive argument at all.
“This last element comes about because Mr Barnier is French and the French have long had a mythology that the UK is the home of all wild west deregulation. If you look at the hard facts we are a more regulated country than most EU countries.
“Look at the things where you have got a hard empirical comparison — then we are pretty much always in the lead. This is a lunatic mythology that exists inside France. The Germans know it’s not true.”
BB: Why do you think the EU will eventually shift its position?
DD: “Ultimately the EU sells 50 per cent more to us than we sell to them . . . there are a large number of vested interest groups that want this to continue. Our sales are very highly profitable. The nickname in the German car industry for us is treasure island . . . we are a highly profitable, very important market.”
BB: Should services be in the trade agreement?
DD: “We always argued for stronger banking standards. If they [the EU] want to deviate from British accounting standards that are the best in Europe, or architectural services standards . . . then so be it . . . we won’t be the loser out of that, they will just lose more market share with the rest of the world to us.
“What’s interesting is that the City of London has now realised that to have better, sensibly designed regulation would give them a competitive advantage. So ideally there would be services in there [the FTA] but the demand is really from Europe rather than us . . . Is the eurozone sufficiently robust that it can lose liquidity in key markets? The depth of liquidity in London can’t easily be replaced in Europe.”
BB: Do you think David Frost is a match for Michel Barnier? Should Boris Johnson appoint a minister to lead on the trade talks?
DD: “It’s always been the case that the PM was controlling the negotiations, which I always thought was unwise. But I think Frost is doing a good job.
“Actually, [Michel] Barnier is not the issue, Stephanie [Riso], Sabine [Weyand] are the real brains. Michel is a spokesman, really. Occasionally he dominates . . . but broadly he leans very heavily on his support staff. The question is whether the British team matches the European team.
BB: So how do you rate the chances of a deal by December 31?
DD: “Let’s imagine they [the EU] tough it out to November. If we put up a 40-page document and say to every industry group in Europe, this is what we are offering, the European Commission is put in a position that for ideological reasons we will do this damage to European industry at a time when the eurozone is already fragile.
“The timetable is more compressed than what I planned. We would have had 21 months to do this if we had started last year. But the last three weeks matter more than the previous three years. The last 21 days, more than the previous 21 months. The EU very often goes to the limit. Barnier’s thing about ‘the ticking clock’ is not new.”