The EU has announced that their 27 member states would all be expected to sign a code of conduct to ensure that they do not have direct and secret relations with the United Kingdom. Described by the former Treasury official and European Commission economic advisor, Professor Mujtaba Rahman as a device which will, “force a level of transparency, coordination on EU capitals and their dealings with London”, it is a novel construct in European diplomacy.
The problem with voluntary Codes of Conduct is that they almost never have the desired effect. The EU is worried that there will be breaking of ranks, as economic statistics suggest that the Covid hit is just part of a broader malaise in the state of EU/UK trading relations. The latest figures from the UK’s Office of National Statistics show a significant change in trade flows two and from the United Kingdom in the years post Brexit, becoming more pronounced through the Covid period.
According to the figures released in May, the combined EU 27 countries’ sales to the UK have dropped from £25.2 bn in March 2019 to £17.8 bn in March 2021, a drop just shy of 30%. This of course could be dismissed as the impact of Covid, except that the figures also show that trade with the rest of the world and the UK has risen over the same period, from £18.9 bn to £19.3 bn (+2.1%).
There is no doubt that Covid has played its part in this, as has the rules being thrown up by Brexit and it shows a significant shrinkage in overall trade. But the key detail is revealed by the ONS when they point out that UK’s imports from the EU are falling faster than exports to the Trade block.
“Imports of goods from EU countries, excluding precious metals, fell by £14.0 billion (21.7%) between Quarter 4 (October to December) 2020 and Quarter 1 (January to March) 2021, while exports fell by £7.1 billion (18.1%)”.
The direction of travel, where the UK’s new political and diplomatic focus has turned to its more traditional global partners, is significant. For the first time in decades the UK’s trade with the rest of the world now outstrips its trade with the EU.
Of course, the EU establishment’s need for a Code of Conduct is not something that comes from a position of strength. Over the summer months, the impact of the EU refusing to put the UK on it’s ‘White List’ of countries from whence a tourist can arrive virtually unencumbered is also severe. The loss if British tourist pounds for Greece, Spain, Italy, and the rest is significant. In the year before Covid, 2019, UK tourists spent £28bn plus an extra £5bn in visiting friends and family. The loss of this income has prompted some countries to, as they did with the vaccine roll out, look at setting up their own rules, this time about permissions for entry for UK tourists.
For the panjandrums of Brussels such activity could be fatal to the great idea of a common endeavour. This in turn could cause deep resentment towards central rigidity. After a year when the EU has made such a pig’s ear of vaccines and economic support for those countries worst affected by Covid this heavy-handed approach is unlikely to win many friends in most European capitals.
The problem they face is that it goes against the grain of countries who believe themselves to be nation states being told with whom and how they talk to third parties. Yes there will be compliance, but it will be sullen, and there will be rule breaking. What happens if the rule breaking becomes the norm is not yet suggested?
Ordinarily, Codes of Conduct, unless they have teeth, will be observed in their absence. If that is the case, teeth will have to be grown by the EU. This, in itself, will result in a huge constitutional change in favour of power to the centre. Given the fall in popular support for the EU project, this is an odd hill for them to build, in the end it may be the one they die upon.
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