Brexit deal will be made on Europe's terms

UK Prime Minister Boris Johnson has still not been able to get a deal across the line. Photo / Getty Images

And so we stumble onwards. The extension of trade talks between the EU and the UK should not be a surprise. For all Boris Johnson's bravado about "prospering mightily", the British prime minister knows that a "no deal" Brexit would be disastrous for the country. The EU would also suffer, but not nearly as much. So there will probably be a deal struck before the end of the year; if not, soon afterwards.

When an agreement is reached, it will largely be on Europe's terms. The EU will doubtless make some concessions on fisheries as part of last-minute haggling. But Britain will have to agree to the EU's central demand, which is that there must be "level-playing field" rules — ensuring that the UK cannot undercut EU regulations on competition at will.

The reason that the deal will be done on the EU's terms is the same reason why the whole Brexit process has been so painful for Britain — a fundamental asymmetry in power between the two sides. Britain sends 43 per cent of its exports to the EU; Germany, France and Italy all send around 6 per cent of their exports to Britain. The population of the UK is nearly 67m; that of the EU is 447m. Even without Britain, the EU has a single market comparable in size to that of the US or China.

Mr Johnson insists that the UK and the EU are "sovereign equals". But, as long as the EU maintains its unity, they are not equals in terms of power. And that is what has mattered in these negotiations. It is why Britain has made a series of painful concessions over the past four years — most notably by agreeing to a separate status for Northern Ireland, which will see customs checks on goods crossing the Irish Sea, effectively dividing the United Kingdom.

The British have always insisted there is a win-win deal that Brussels and London should both happily embrace. But they have failed to understand how the EU sees its own interests. The integrity and attractiveness of the European single market is the EU's single most important strategic asset. Brussels is determined not to undermine that strength, by allowing the UK market access on terms that are too advantageous.

The Europeans also need to demonstrate to Eurosceptic forces within their own countries that leaving the EU is a bad idea. So they have always been much less sold on the idea that there can be a "win-win" outcome from Brexit.

Once the Europeans had decided that it was not in their interests to grant Britain the easy access to the single market that Mr Johnson had breezily promised to UK voters, relative power became crucial. Unfortunately, Britain's Leavers have consistently overestimated Britain's power — believing that the EU was about to fold or make concessions that never materialised.

Discussions between the UK and Europe are ongoing. Photo / Getty Images

Why did Britain make this mistake? Partly because Leavers have placed far too much faith in the fact that the EU enjoys a large trade surplus with the UK. They have forgotten that, on a global scale, Britain is only one market among many. For years, the British have been waiting for the German carmakers to arrive over the horizon — like Gebhard Leberecht von Blucher at Waterloo — and save the day. We are still waiting. Reduced access to the British market would be painful for German carmakers — but not so painful that it is worth undermining the integrity of the EU single market.

More broadly, Britain's Leavers were guilty of swallowing their own propaganda. For decades, the belief that the EU (and/or the euro) is on the point of collapse has been a staple of British Eurosceptic discourse. A generation brought up on tales of British military victories over Germany and France finds it hard to envisage that "if it comes to it", Britain will not ultimately prevail over those flaky Europeans.

This kind of jingoism was epitomised by the recent remark by Gavin Williamson, Britain's education secretary, that we're "a much better country than every single one of them". This is the same man, who as defence secretary, once told the Russians to "shut up and go away".

As their illusions have been stripped away, Brexiters have resorted to complaining that the EU is treating Britain unfairly. But students of international relations and trade negotiations could have pointed out to them that relying on the kindness of other countries is not a sound strategy. Nations, Britain included, look out for their own interests first.

Horror at the weakness of Britain's position has led to an outbreak of xenophobia and empty bluster. One British newspaper this weekend, quoting an unnamed government minister, shouted — "Merkel wants Britain to crawl across broken glass".

The previous day, the same paper's headline had screamed — "We'll send in Gunboats". The obvious response to that is — and then what? Confronting French fishermen with military force invites non-military retaliation from the whole of the EU — which brings Britain back to that awkward asymmetry in power.

In the two world wars — which have done so much to frame Brexiter thinking — the UK prevailed with the help of America. But the Biden administration will not ride to Britain's rescue in a confrontation with the EU. A no-deal Brexit would result in not-very-splendid isolation. That is why a deal, largely on the EU's terms, is by far the likeliest outcome.

- Financial Times