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Another week in Brexit, and another interest group has charged Boris Johnson with “failure” in his negotiations with Brussels when concluding December’s trade and co-operation agreement (TCA) with the EU.
Last week it was the Scottish fishing industry that was castigating the prime minister for his “desperately poor” deal, and this week it is the music industry — led by a stellar cast including Elton John and Sting — saying it had been “shamefully failed” by the deal.
In the case of the fishermen, it is the lack of any meaningful easements on border controls for animal and plant products that is hitting home — to the point that, as Dominic Goudie of the Food and Drink Federation observed to a Lords select committee this week, the UK has ended up with tougher terms than New Zealand.
For the musicians, it is the absence of a “mobility chapter” in the deal that is hurting them since it now will require touring groups to get complex work permits — which differ from EU nation to EU nation — in order to perform.
The roadies and trucks that drive them on tour will also fall foul of the limited pick-up and drop-off rules — so-called cabotage — that are included in the deal. Given that Covid-19 has stopped any touring of any kind, that particular story has yet to fully unravel.
And the musicians are not alone. All sorts of performers and creative types — from TV cameramen to fashion models and film set make-up designers — will find themselves facing additional hurdles (details here), both to work in the EU and to come to the UK.
These cries of a “betrayal” coupled with demands for urgent fixes all come a bit late in the day, since it has been clear for a long time to anyone paying attention that this government was going to prioritise sovereignty over market access of all kinds.
Services, including financial services, were cut adrift by Theresa May when she accepted that this was the inevitable price of ending free movement — a necessary act to deliver the immigration controls that appeared to have driven many of the demands for Brexit.
Mrs May, to her credit, did then try and preserve just-in-time supply chains and the place of Northern Ireland in the Union, but as we now know, she lost that battle to Mr Johnson who promised the hardest of Brexits as he made his own pitch for power, actively shutting out more moderate Tory voices in the process.
The actual price of that victory was — as we’re now seeing — a trade border in the Irish Sea and the full force of the border barriers now erected. These have been experienced most immediately by the fish and meat industries, but as the pandemic clears and trade volumes pick up, other industries will also start to get the friction burns from Britain’s new Brexit borders.
What is remarkable is that any of this should come as a surprise — but it clearly does, since all of the above-mentioned groups have called volubly on the government to seek solutions and further easements with the EU to sort these problems out.
Inferred in such demands is the idea that these issues are somehow to be viewed as the unintended consequences of Mr Johnson’s deal — unforeseen wrinkles to be ironed out, rather than the direct consequences of the government’s choice to build back borders.
And the message from Brussels is clear. As Stefaan De Rynck — a top Michel Barnier aide — tweeted in response to the musicians’ entreaties, the rejection of a mobility chapter has made such consequences inevitable and the focus must now be on adapting to the new rules. “The challenge now is for all those concerned to adjust to the new reality of being outside the EU and its single market,” he wrote.
Chilly, but true. The same message was presented to the logistics industry when it raised the rules of origin restrictions that — as former May adviser Raoul Ruparel has pointed out — are tighter even than the Canada-style deal Mr Johnson so often said he wanted.
These pennies (millions of them in the case of the financial services industry still awaiting equivalence rulings from Brussels) will keep dropping as the weeks go by. The pandemic has softened the edges of the deal, but it will also string out the pain.
The government is reduced to offering compensation — £23m for the fishermen and a promise to the musicians from the culture secretary Oliver Dowden to look at their case — and repeating, as Mr Johnson did recently, that these are all just “teething problems” of the deal.
This might work politically in the short term, but as it becomes clear there aren’t going to be any magic fixes, industries will have to start to shift and adapt to the new realities.
Some will still hope that their European counterparts (who will not experience full frictions until the UK border enters into force in July) will wake up to the mutually destructive reality of the deal and lobby their own governments harder for fixes.
But that might well be to underestimate how easy it is for trade organisations in the EU to lobby Brussels via national governments. For many, the reorientation of supply chains may well be a quicker and cheaper option than trying to reverse the consequences of a deal the UK actively asked for — we shall see.
In the interim, Scottish fishermen will have to get better at filling in highly complex Customs forms and hope that their margins can absorb the additional friction and costs. One fishing business privately estimated its export costs had risen from 25p per kg to £1.20 per kg — but it is still too early to say if that is a permanent cost, and what it will mean for sales and competitiveness.
These things will take time to shake out across a myriad sectors, but over time the costs of the deal will become apparent. That, in turn, will put pressure on the government to try to find some visible upsides from such a hard Brexit — but what exactly those might be is a topic for another day.
The combination of inactivity caused by Covid-19 restrictions and pre-Christmas stockpiling has smoothed the cliff-edge of a Brexit deal that, simply because it was concluded so late, gave everyone very little time to adjust.
The industries that have borne the brunt are those that had no choice but to export products immediately — the fish and meat sectors most obviously — because their products are perishable: wine can wait until February, langoustines cannot.
There have been widespread reports of pork, for example, rotting on the docks as Customs officials try to process the paperwork.
A single error can result in entire shipments being left on the quayside as everyone wrestles with what Nick Allen, chief executive of the British Meat Processors Association, called “convoluted, archaic and badly implemented” border processes.
These might work over long distances with produce shipped with long lead-times, but they were never designed for “just in time” trade of the kind that has built up during the UK’s single market membership.
The above chart demonstrates the exchange that has grown up between the EU and UK pig industries — crudely the UK export pig parts that the EU countries make into salamis, for example, while the UK imports other cuts such as gammon and chops that Brits like to eat.
Mr Allen warns that “if not fixed quickly it will be the thing that starts to dismantle the European trade British companies have fought so hard to win” — which is exactly what traders are already warning of.
As for the likelihood of those “fixes” coming? Well, fingers crossed for the pig farmers, but see above.