Another day, another fantastic interview on Sky for Bernardine Adkins, Head of EU Trade and Competition, this time with Dermot Murnaghan, discussing the PM's pledge to open trade talks
Dermot Murnaghan: Now, the Prime Minister has, as we've been reporting, outlined his vision of a post Brexit Trade Deal, which he says means the UK will not be following EU rules and would not be, therefore, subjected to tariffs or quotas. The EU's negotiator, Michel Barnier, was clear today though that divergence from the rules means more trade friction. Well, with me is Bernardine Adkins, the Head of EU Trade & Competition at the international law firm, Gowling WLG. Very good to see you, Bernardine! I mean, it's quite straight forward from the EU's point of view, let's start there, I mean, we've heard it from Michel Barnier, and we've heard it from them all along, that the further you want to diverge then the more friction is going to be created in terms of trade.
Bernardine Adkins: That's correct and already the UK has set its stall out, saying, 'We wish to diverge from the EU regulatory system', which is in contrast, normally, to most trade agreements, is about the parties coming together in terms of regulation. So the challenge for both parties is how, unprecedented, can you put together a trade agreement whereby one party has set out its stall, saying, 'Actually, we wish to move away from you, rather than towards you.'
Dermot: So, unprecedented ...
Dermot: ... I mean, in your experience, I suppose, yes, we can't think of a global example to compare.
Bernardine: No, there isn't one, and not just in my experience!
Dermot: Well. Boris Johnson's, let's say, ambition, today, a Canada style trade deal. Now, Michel Barnier did say, at the very start of negotiating the Withdrawal Agreement, that there were off-the-shelf options for the UK; Norway or Canada - why isn't that still there from the EU's side?
Bernardine: I'm afraid the devil is in the detail of all of this. I mean, the EU has very helpfully set out, in a large document, a thirty-three page document, which, I have to say, contrasts with the UK position, which we've got a two page written statement, so it's much easier to understand what the EU position is, and so, basically, the EU is saying what is quite clear, and it's paragraph 17, and people need to understand this, paragraph 17 says, the EU, 'We recognise that it does want to retain its autonomy for how it creates its rules' but, by the same token, the EU is saying, 'But, however, if you wish to trade with us with a Free Trade Agreement, you have access to our markets, we want to ensure this thing called a level playing field'. What does that mean? It doesn't mean that the UK has to align its regulations with the EU, it means certain areas, such as State Aid, the Environment, Social Protection, Employment ...
Dermot: But these don't apply, do they, to Canada? That's the point, isn't it?
Bernardine: Ah, yes, but they do, that was very interesting, I thought, that Boris Johnson, he dodged the question on that front because actually, and I'm afraid the devil is in the detail on the Canada Agreement, it's 1600 pages long, 30 chapters, in the Canadian Agreement, as in most best practice international agreements, Canada agrees, as do the EU, to maintain certain high standards. So, for example, they agree to maintain high standards of welfare under the International Labour Organisation, and we see it most recently with the new NAFTA agreements, USMCA, whereby Mexico agreed that it had to pay its car workers $16 an hour, to align it more closely with the US/Canadian car workers, because Mexico had an unfair trade advantage because, essentially, you call it 'social dumping', so certain areas, it's important that the UK doesn't, basically, sync its rules and give it an unfair advantage.
Dermot: But, I mean, to the aid of Boris Johnson, he says he has no ambition to do anything like that, he wants to exceed the quality of the EU regulations.
Bernardine: Yes, absolutely! What we have though, in the political declaration, and we see it again in the most recent missive that was issued today, was the EU saying, 'Look, we have common high standards that we agreed together, the UK was at the table when we agreed these high standards of Social Care, Employment, let's maintain, hold those social standards', is essentially what the EU is saying.
Dermot: Let me ask you, I mean, this is a very important point as well, getting quite technical though, it's about adjudication, isn't it, in terms of dispute, there can be myriad disputes ...
Dermot: ... and the European Union is saying, 'You've abided for the last 47 years by the rulings of the European Court of Justice and if you're going to trade with us, they still have to have a say', Boris Johnson's saying, 'No, we're out there, that's your court', what could be a forum that could adjudicate it in terms of disputes?
Bernardine: Well, there's all sorts of possibilities for adjudication with trade agreements and that is often a vexed question as to, 'Who's going to do the adjustication, is it by mediation, adjudication, a dispute body?', all that is to come, I think, in terms of what is going to be done but I think it is going to be hard in some areas, that the ECJ does have such an overriding reach in so many areas, I think it's going to be quite difficult in some areas, Euratom, for example, to try and achieve something but achieve it they must.
Dermot: And, lastly, we're mentioning so many countries here but these are the comparisons, Boris Johnson picking another Commonwealth country and saying, 'Well, if it isn't Canada, we'll have Australia', but there isn't a trade deal, is there formally a trade deal between Australia and the European Union?
Bernardine: It doesn't exist, there's a partnership, I think, from 2008, but that doesn't exist so far, so it's another name, I think, probably for W2 arrangements and I don't want to say no deal because I'm quite sure something will be achieved but it's a euphemism for something else.
Dermot: Okay, Bernardine Adkins, very good to see you, thank you very much, we'll have you back as these things get more and more complicated, I'm very sure!
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