Brexit Bulletin: When Will the Fog Clear?

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When will we know the details of the U.K.’s post-Brexit relationship with the European Union? The “political declaration” on future ties scheduled for completion in October could leave many questions unanswered.

There are two reasons. One is time. Substantive talks haven’t even started yet. There’s now exactly six months before the EU summit in October. Factor in a short summer break and time is already tight for getting anything close to a full trade deal of the sort that Brexit Secretary David Davis said he wants.

In any case, talks on the future don’t look to be starting any time soon. EU officials say the priority should be solving the Irish border issue and the other not-insignificant matters left over from the first phase of the negotiation, such as how to settle potential breaches of the Brexit deal itself. Some in Brussels think that could eat up two months.

But the main problem isn’t really time, it’s about the will – on both sides. As a few U.K. newspapers reported yesterday, Davis is said to have won the opening round of a battle against Oliver Robbins, the civil servant heading the U.K.’s negotiating team, to push for a more detailed text in October. Many U.K. officials privately acknowledge however that vaguer language would suit Britain better so as not to tie its hands in trade deal talks during the 21-month transition period, according to people with knowledge of the talks in Brussels.

The U.K. might not have much say anyway. The level of detail contained in the future-relationship declaration will largely be determined by the EU. Many of the 27 EU governments are coming round to the idea that absence of detail would be beneficial, according to officials. Some see it giving the U.K. more opportunity to remain closer to the EU than current plans allow for; others don’t want to lose their own bargaining power (with the U.K. and among each other) on sensitive issues.

One thing is clear though: Don’t confuse lack of detail for lack of precision. While the political declaration might well fall short of anything resembling a full trade deal, the EU will nonetheless make sure that it pins the U.K. down on the fundamentals of the relationship. 

Brexit Latest

Customs Rethink | Theresa May’s officials could be lining up to keep the U.K. in the European customs union, according to a new analysis that chimes with the views of parts of the British government. Some of the Prime Minister’s team think that quitting the customs union in order to win the power to strike free trade agreements with countries such as the U.S. or Australia is not as desirable as passionate Brexit supporters believe, Tim Ross and Robert Hutton write. “We expect a U-turn by the prime minister well ahead of the Tory conference,” said Mujtaba Rahman, Eurasia Group managing director.

Not All Positive | The British economy has avoided the disaster scenarios predicted before the Brexit vote, but there are dangers ahead, David Goodman and Andre Tartar report. Output has risen every quarter since the 2016 referendum, unemployment is near its lowest since the 1970s and inflation is dropping. But economists say risks do remain. “Productivity growth has failed to re-emerge meaningfully over the past decade and until it does, the economy will go nowhere fast,” said Dan Hanson of Bloomberg Economics.

Canada Hopes | Canadian Prime Minister Justin Trudeau gives an upbeat assessment for the prospects of a post-Brexit trade deal with the U.K. in an interview in The Times. Trudeau promises trade with the U.K. will continue “seamlessly” and that the new arrangement could be an upgrade on Canada’s relationship with the EU. “We very much look forward to negotiating an even better or larger or more impactful deal to encourage the deepening of trade ties between Canada and the U.K.,” Trudeau says.

Off the Shelf | Tesco Plc’s fresh food and prepared dishes helped the U.K.’s biggest retailer overcome a Brexit-fueled surge in costs, amid a brightening outlook for British grocers. The supermarket operator’s profit jumped in the latest financial year as it sold more ready meals and plant-based products. That helped Tesco mitigate inflationary pressure stemming from the weak pound.

Fox Hunting | Fox Networks and Ziggo Sport were among companies raided by EU antitrust regulators as part of a probe into the distribution of sports-media rights. The inspections were carried out in several EU countries at companies related to broadcasting rights for various sports events, the European Commission said in a statement.

New Job | Andrew Tyrie, one of the most senior Conservative lawmakers until quitting Parliament last year, is to be named chairman of the U.K. Competition and Markets Authority, taking over as the agency prepares for increased powers after Brexit, a person familiar with the matter said.

And Finally…

British people are eating more fondue, the Times reports. This is because of Brexit.

Can’t quite work out the connection? The Swiss dish popular in the 1970s appeals now to Britons’ sense of nostalgia and need for comfort food during troubled times, Charles Spence of Oxford University tells the newspaper. In addition, “the origins of the fondue in a country that lies just outside the EU but which manages to maintain good relations may also be relevant given current debate about how Brexit will play out.”

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