It looks like a deal but what sort of deal? And it’ll go down to the wire

The idea of  extended deadlines right  down to a supposed last minute  will hardly surprise anybody in Northern Ireland. We’ve lived with them for a generation. Taking a tour round comment on the Brexit cliffhanger, the prospects for a deal are  looking good. British predictions of  going to the wire for  a decision by the big beasts of Merkel and Macron look like being fulfilled. But that doesn’t mean an optimal deal for British interests.

From Peston

The odds of a UK/EU free trade agreement are – in my estimation – quite close to 100%. Though I don’t suppose anyone will admit to that. The outstanding issues (how often the fishing quota is renegotiated, enforcement mechanisms for state aid limits) are so conspicuously… amenable to compromise, that it would be quite an achievement to muck it up. That said, we live in an Age of Incompetence, so I guess anything is possible.

Katya Adler, BBC Europe editor

Possibly more significant than the call this eve between the PM and the European Commission Président about post #Brexit negotiations.. will be the intra EU discussion beginning at this week’s summit about how much to compromise to get a deal with UK

Mujtaba Rahman is the head of Eurasia Group’s Europe practice and the author of POLITICO‘s Beyond the Bubble column.

This week’s crunch European Council summit on Brexit isn’t a showdown between the U.K. and the EU. Whether or not there’s significant progress toward a deal depends on who wins a less visible — and often forgotten — tug-of-war between Paris and Berlin.

The chancellery and the Elysée have had different approaches to Brexit since the start. Perhaps surprisingly, Berlin has been the one to constantly fret about the strategic and geopolitical consequences of the U.K.’s departure, which it sees as a big loss for Germany and the EU.

This has led Chancellor Angela Merkel to lean on the side of a polite, civilized and constructive process with London throughout the divorce and trade negotiations. As one senior German official who knows Merkel well told me, her thinking on Brexit can be summed up as: “Better if in, but if not, then close.”

French President Emmanuel Macron’s stance on Brexit has been more defensive, and more influenced by his domestic politics. Facing competitive elections to the European Parliament in 2019, Macron was of the view that the three credible outcomes from divorce negotiations — an inferior deal, no deal, or a referendum and reversal — would all help him in his contest against Marine Le Pen. Each would nicely demonstrate the cost, or difficulty, of leaving the EU.

This thinking is reinforced by the Elysée’s belief that Brexit is also an opportunity for France and the EU. In an EU of 27, France is positioned to become the foreign and security hegemon to counterbalance Germany’s economic dominance. It is no coincidence that the Macron’s vision of the EU — a “geopolitical” union unafraid to call out the “brain death” of NATO and seek “strategic autonomy” from the rest of the world — prioritizes those areas where Paris has a comparative advantage over Berlin.

The Elysée also believes the U.K. is negotiating from a position of weakness. Against conventional wisdom, senior French officials point out that France has less at stake in avoiding a no-deal scenario than, say, Ireland, Germany or the Netherlands, which are all much bigger players in EU-U.K. trade.

These differences explain why France remains one of the hard-line EU member countries on Brexit, less willing to compromise on one of the biggest unresolved issues — fish.

The reasons for this are narrowly electoral too. Macron has always been unwilling to sell out French fishing communities. But his room for maneuver has diminished even more as public confidence in his government’s handling of the coronavirus crisis has fallen.

But fish is not the only reason why Macron — a “scrapper” rather than a peacemaker — may balk at Brexit terms acceptable to Germany and others. France is determined that the level playing field rules imposed on Britain should be tough and enforceable.

Macron’s belief in a “strategic Europe” is economic as well as diplomatic. His vision of a European industrial and innovative powerhouse, capable of remaining independent from the U.S. and China, is incompatible with a future few-rules Britain that would act as an “unsinkable aircraft carrier” for continued American or Chinese economic domination of the EU27.

Meanwhile, Merkel does not want an internal EU civil war over Brexit on what remains of her watch. “Merkel will want her legacy,” said the senior German official who knows her well. “And her legacy will be that she won’t have allowed a split in Europe.”

This tension in Berlin — between seeking a deal while maintaining EU unity — will be critical to the pressure Merkel eventually brings to bear on Macron. She will be supported by European Commission President Ursula von der Leyen, who privately wants a deal, to ensure that her own political priorities and legacy, notably on the green transition and digital economy, are not overtaken by a no-deal crisis. But von der Leyen also owes her fidelity to Macron: She is where she is because he put her forward as Commission president when post-election negotiations deadlocked last year.

The problem in the end — maybe not this week, but eventually — will be the vanity or antagonism of small differences. By that, I mean seemingly small divergences that are not so small from differing national viewpoints.

Macron cannot afford to seem petty. Nor can he afford to talk a strong EU game and then fold — as he has in the past. Difficult decisions await. The U.K. may make it easy for Europe by continuing to drag its feet on state aid, allowing Barnier to brief EU leaders that London has not moved far enough. Some senior EU officials even hope for this outcome. They do so in the knowledge that a difficult reckoning between Paris and Berlin otherwise looms — and that the outcome is far from obvious.

Jill Rutter of the Institute for Government

 The real risk from the summit is not that it unlocks the route to a deal but that one or more member states dig in and make Barnier’s task harder.

The UK has always had a naïve faith that political leaders will see the woods for the trees, without recognising it is, in many ways, easier for the Commissioners, with the benefits of  their ‘unelected’ status who are freer to do that.

Will Johnson then pull the no deal trigger? Unless the summit veers madly off course, that looks unlikely. His last semi-deadline was July, and earlier Frost had said end-September.

It is only in recent weeks, since the end of the ninth formal negotiating round, that there have been real signs of the sides moving. That was signalled last week by Lord Frost in two select committee appearances, and by Michel Barnier.

If there were more focus in the UK on Brexit, there could be political pressure from the backbenches on the PM to make good his threat.

But the Government is already showing signs of panic about the unsurprising state of unreadiness of British business. Two weeks ago Michael Gove, the minister in charge of Brexit preparations, unveiled his ‘reasonable worst case scenario’ and introduced the brave new world of Kent Access Permits.

That was in the light of research that suggested over 40% of businesses expected another extension – last year’s lesson was to ignore Government and expect an extension.

new communications campaign has been launched to convey the need to prepare more starkly than the ‘check, change, go’ campaign managed with its emphasis on the new opportunities rather than the new red tape.

The European Parliament has said it will not ratify if the UK has failed to remove the offending law-breaking clauses from the Internal Market Bill (it is possible they may have been removed for them by the Lords before the bill returns to the Commons).

It is likely that the sort of deal now in prospect will not require ratification by national parliaments as well – but even so the EU negotiators do not want to rush their parliament. The UK Government also seems to think it will need primary legislation to put some aspects of the agreement into UK law – but as long as it can keep its backbenchers on board that can be done very quickly.

EU negotiators suggest no later than the first few days of November. Others think it could slip a few more weeks, even into early December.

Charles Grant of the Centre for European Reform

Macron will have to soften his line on fish, a bit, if there is going to be a deal. I suspect many other capitals will encourage him to do so, discreetly. But as he showed 18 months ago over the Brexit extension he is not afraid to stand alone

Tony Connelly of  RTE

The EU wants to dedramatise the (summit) meeting: ie, this was Boris Johnson’s deadline not the EU’s. So far there are Council draft conclusions on Covid 19, Africa + climate – but nothing on Brexit. That won’t come till after a morning mtg of EU ambassadors and is expected to be bland

Barnier said there has been movement on the level playing field (LPF), including state aid, and referenced David Frost’s statement to the House of Lords EU Cttee last week as movement. On state aid Barnier’s Task Force is looking at a toolbox with four elements: high level principles, a strong national regulator, dispute settlement mechanism + “autonomous retaliatory” measures both sides can trigger instead of arbitration if urgent action needed. uch retaliation could be “horizontal”, ie if there’s a grave breach one side could take retaliatory measures not just with tariffs but alternatively on road haulage, aviation – if extreme responses were deemed necessary. Barnier indicated it’s unclear if the UK side are willing to go for this toolbox approach. ‘s understood France’s Europe minister Beaune was very hardline on fisheries. He is said to have told the meeting the French cabinet had discussed no deal planning yesterday.

That’s not to say there is no optimism about a deal. “People are being cautious. There is some more optimism around now over the possibility of a deal, but given there’s limited time left given the number of [outstanding] issues,” n the Internal Market Bill, Barnier appears to hope that the UK would itself opt to remove the offending clauses rather than have it presented to them as a condition for the European Parliament to ratify the treaty, should agreement be reached on an FTA. So, the summit gets underway on Thursday. Despite the probable desire by @eucopresident Charles Michel to dedramatise the Brexit issue as far as possible, all eyes will be on @EmmanuelMacron (and other coastal states) on the fish issue…

The cost to Britain

George Parker FT

To recap, Britain’s new EU border in numbers: £7bn in new red tape; 215m extra forms; 50,000 new form-fillers; worst-case 7,000-truck queues; £77m for emergency ferries; 10 new inland customs sites; four lorry parks; £300 fines for HGV drivers entering Kent without “passport.

Government to install portaloos for drivers on Kent roads in case of Brexit congestion Transport min Rachel MacLean: “we have detailed plans that we’ve worked up for provision of not only portaloos but other facilities for drivers”

Other aspects of the deal  may be far from ideal…

Britain’s car industry risks losing out even if there is a post-Brexit trade deal with the EU, according to documents seen by the BBC.

Car parts from Japan and Turkey used in the UK will not be treated as British, so some exports may see higher tariffs.

In a letter, Britain’s chief Brexit negotiator says the UK has failed so far to get the car parts deal it wants, and “obviously cannot insist on it”.

Having enough parts sourced within the UK and EU is key to a free trade deal.

In a letter to the car industry, seen by the BBC, chief negotiator Lord Frost says one of their key priorities – that parts and components from Japan and Turkey count as British in any deal – has been rejected by the European Commission.

This risks some UK automotive production attracting taxes on trade, known as tariffs, when exported to the EU, even if there is a “zero tariff” trade deal struck with the EU.