EU shifts focus to US trade with Brexit ball firmly in UK’s court

In Brussels we are on what Jean-Claude Juncker calls "a Brexit break". Notionally.

Both European Commission and European Council presidents were this week in Strasbourg telling MEPs that the October 31st article 50 deadline extension was an important “breather” that allows the EU to address other, as Donald Tusk put it, “at least as important” business.

There’s the looming May 9th summit in Sibiu, Romania, the trade difficulties with the US, the relationship with China, the unresolved issue of sharing responsibility for Mediterranean migrants, the next seven-year EU budget, and completing the single market etc.

Sibiu was supposed to be about charting a post-Brexit course for the EU – Theresa May is not invited – demonstrating to voters in next month’s parliament elections that it has a vision that embraces their concerns. No doubt Emmanuel Macron, after words of thanks for solidarity over Notre Dame, will have things to say, and the commission has a few ideas.

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Trade dominated this week’s commission agenda. European Commissioner for Trade Cecilia Malmström announced a new mandate for urgent talks with the US over tariffs on industrial goods to ease strained transatlantic tensions.

US president Donald Trump, convinced that EU-US trade is deeply skewed, has repeatedly threatened to hit EU car exports with additional tariffs and has slapped punitive duties on European steel.

This week his administration also reinstated measures to penalise international companies trading with Cuba. Malmström warned “the EU will consider all options at its disposal” to defend companies including supporting their right to sue for damages in the EU courts.

Brussels also warned on Wednesday that up to $20 billion-worth of US products from hazelnuts to tractors could face punitive tariffs in retaliation for state support to Boeing, the latest stage of their long-running transatlantic dispute over aircraft subsidies.

The move follows an EU win at the World Trade Organization, which ruled last month that Washington had failed to end an illegal tax subsidy to Boeing. It comes days after the US announced similar plans to target up to $11 billion (€9.8bn) of EU products in response to WTO rulings against subsidies for Airbus.

You cannot drag out Brexit for a decade

Even if it wanted to, there’s nothing more Brussels can do to assist the British prime minister extract herself from her Commons impasse. The ball is firmly in the UK court. The withdrawal agreement is unamendable, though the political declaration on the future relationship could be changed “if the UK position were to evolve”, Tusk said.

Since the summit last week EU officials and ministers from member states have been making two key points that should be heard loud in London: that October will not be another opportunity to renew the extension; and that any EU-UK discussions in the wake of a no-deal Brexit will only happen if the UK accepts as the starting point British commitment to the full withdrawal agreement, with cash promises and backstop.

You don’t avoid the withdrawal agreement and its obligations in the long term by forcing the UK into a no-deal Brexit. If, that is, you want any kind of a long-term relationship between the EU and UK. Brexiteers, please note.

Speculation from London that October might just be another opportunity to long-finger any Commons acceptance of the withdrawal agreement has been quietly scotched, not least by the Germans who were most supportive of last week’s extension decision.

“They will have to decide what they want by October,” German foreign minister Heiko Maas told the Financial Times. “You cannot drag out Brexit for a decade.”

Face facts

A former British EU ambassador, Sir Ivan Rogers, who resigned in 2016 over what he saw as London’s wilful refusal to face facts, told BBC’s Newsnight that MPs should stop imagining that a Commons majority in favour of preventing a no-deal Brexit was ever, by itself, going to stop it happening. The UK’s partners, he said, anxious to get on with their wider agenda, would not be willing to extend again.

A senior council official close to Tusk told journalists the conditions attached to any further extension would certainly be far higher, although Tusk himself was more ambivalent. “It is our intention to finalise the process in October,” he told journalists at the end of the summit, but admitted that he was “too old to exclude another scenario”.

Although he insisted to MEPs that “the European Council will be awaiting a clear message from the UK on a way forward”, he also held out for what he admitted was the still forlorn hope of the revocation of article 50 by the UK.

“During the European Council one of the leaders warned us not to be dreamers, and that we shouldn’t think that Brexit could be reversed,” Tusk told MEPs. “I didn’t respond at the time, but today, in front of you, I would like to say: at this rather difficult moment in our history, we need dreamers and dreams. We cannot give in to fatalism.”

Dreamers are in short supply here. Let alone that most observers do not think there is any chance of revocation, no matter how desirable, but few believe May is capable of winning a majority for her version of Brexit either from Labour or the Commons.

No-deal in October and no further extension remain the scenarios most widely anticipated.