The UK will leave the EU on Friday night, but at Thursday's LEAD summit there was some skepticism about future trade talks. Brian Carruthers was there to hear.
Business minister Nadhim Zahawi made all the right noises about Brexit at yesterday’s LEAD summit. Or at least the noises you would expect.
“A future trade deal must cover goods and services,” he told the annual Advertising Association event. “We want advertising to grow and flourish in the new era globally. We need to throw ourselves into securing free trade agreements across the world to open up export opportunities … giving you the chance to swell your exports, and, I hope, expand your reach even further”.
Fine words, but achieving these aims was always going to be difficult within the timescale the government has set itself and the task is made doubly so by the intention to conduct simultaneous trade talks with the EU and the US.
As former House of Commons Speaker John Bercow pointed out to the audience, getting such deals are going to be “time-consuming, multi-faceted, complex and nuanced matters”. And in a US election year, he added, “it is Panglossian optimism to suppose that he [President Trump] is going to put British interests before American interests. And the idea that he will put any interests before his own is off-the-scale barking.”
Barking or “exuberant and self-confident”? That’s the description political commentator Steve Richards gave to Boris Johnson’s new government. The Prime Minister may be omnipotent now, he said, but the “seeds of future tension” are already being sown – most obviously in the decisions being made around the HS2 rail link and Huawei's place in the country's 5G strategy, but also in the approach to trade talks.
For all that “Get Brexit done” was a great election slogan, with its appeal to Brexit fatigue and including an element of truth, 11pm on Friday 31 January won’t be the end of it. There’s 11 months of trade talks to come, but in reality there’s far, far less time, Richards pointed out.
“The trade talks won’t begin until probably March,” he suggested. “They have to be ratified by all the EU parliaments so the assumption is that talks would have to end by October. Now the EU takes August off, and if we’re honest, July and bits of September as well.” So, six months max to conduct and complete all the talks on goods and services that Zahawi promises?
“That will not happen,” Richards stated. “It is literally impossible.”
But, he continued, “there is, I think, no appetite in the pysche of Boris Johnson to contemplate a no deal”. So will the PM ask for an extension to talks in July, as the process requires, even though he’s already said he won’t? “Look at how prime ministers become trapped during their honeymoons,” Richards mused.
The most that can be achieved, he said, is a cosmetic trade deal “with lots more talk to come”. And if even that low bar isn’t reached, then – Groundhog Day – we’re back to a cliff-edge departure in December.
Not a whole lot of certainty there for businesses to work with, but, for now, there’s a “mini-Boris bounce”, according to GfK’s January Consumer Confidence Barometer. It’s risen for the second month in a row, up two points to -9; people are more optimistic about their personal financial situation and the general economic situation.
How long that will continue is anyone’s guess. As well as the progress of trade talks there are many other things out there that have the potential to derail this glimmer of hope, from climate change to the spread of the coronavirus.
The only near certainty is that Richards will have plenty of material to work with at LEAD 2021.