Brexit drama 2.0

This is an audio transcript of the FT News Briefing podcast episode: Brexit drama 2.0

Marc Filippino
Good morning from the Financial Times. Today is Monday, November 15th, and this is your FT News Briefing.

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China has lashed out at the European Union. COP26 has wrapped up, and the Brexit drama continues.

Andy Bounds
Unfortunately, the deal that prime minister of the UK, Boris Johnson, signed, he now says isn’t a very good one so he’d like to have it reopened.

Marc Filippino
Our EU correspondent Andy Bounds unpacks the key sticking point. I’m Marc Filippino, and here’s the news you need to start your day.

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China is unhappy with the European Union at the moment. In an interview with the FT, Beijing’s ambassador to the bloc, Zhang Ming, said the EU has thrown up a regulatory and trade hurdles to foreign businesses that could damage global supply chains. The EU has been changing its trade practises to bolster its economic self-reliance and to respond to China’s trade practises. The Chinese ambassador also criticised a deal between the EU and the US to limit steel and aluminium imports from carbon-intensive producers like China. He said the deal would worsen inflationary pressures. Meanwhile, Chinese president Xi Jinping is set to meet US president Joe Biden today for a virtual summit aimed at salvaging the relationship between the two countries.

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After two weeks of street protests and speeches from powerful leaders, the COP26 climate conference in Glasgow has wrapped up. The big achievement is an agreement among nearly 200 countries on new rules for cutting greenhouse gas emissions or paying to cut emissions. But this final deal didn’t come without some last minute drama. The FT’s climate editor Emiliya Mychasuk joins me now to talk more about this. Hey, Emiliya.

Emiliya Mychasuk
Hey, Marc.

Marc Filippino
So what was this last minute drama?

Emiliya Mychasuk
Yeah, so you have various sort of issues that people were arguing about, but the ones that are most obvious thing that it seems bizarre was never included in any COP agreement was the phasing out of coal or the end of use of coal for power and the end of subsidies for fossil fuel projects. You know, it seemed like things were going pretty well. And then literally in the last few hours of a two week summit, you had India first saying that it would not support this first time inclusion of the end of coal in the agreement, and it also had support from China and South Africa.

Marc Filippino
OK, so last minute scramble. What was India’s reasoning for baulking over the phrasing regarding end of coal?

Emiliya Mychasuk
Well, as developing nations where, you know, quite honestly, as they pointed out, that a lot of their people don’t have power and to hamstring the country in developing is unfair when other rich countries, wealthy countries like the US and and Europe have already had the benefit of having coal-fired power to as part of their prosperity. So that’s the reason that they they wanted to include wording that was about a phase down of coal, not a phase out. Now it seems like a small thing, but for nations, vulnerable nations, small island nations that are already suffering from climate change, they were very unhappy about that.

Marc Filippino
So, Emiliya let’s talk about the how. How do countries go about implementing these new rules, especially, you know, the world’s biggest carbon emitters?

Emiliya Mychasuk
Well, that’s the critical question, Marc, is is it do-able? The agreement proposes that countries come back in a year’s time with what their targets are, how far they’ve come. One of the technical aspects of the agreement is that they set in place a way of measuring asking countries to be more transparent about how they measure their emissions and what their emissions are. Countries such as Russia are less keen on that so they’ll have to come back in a year’s time and check in.

Marc Filippino
So, Emiliya COP has been going on for over a quarter of a century. Where does this COP lie in terms of importance and historical context?

Emiliya Mychasuk
So, this is my first COP, as it was for many of the businessmen and politicians who were there, I might add. COP veterans tell me that this was a positive COP, and whether it will be seen as a turning point in sort of five or 10 years time, it’s hard to tell. But the last five to six years, really since Paris, there has been very little breakthrough, and the last COP in Madrid was judged a failure as a result. And so hence there was a little bit more excitement about this one. We will only be able to really judge if it succeeds in limiting climate change. And even now, based on the pledges that were made at this COP, we’re still on track at the best possible scenario for 1.8 degrees of warming, which is above the 1.5 target for Paris and generally not great. But I’m a believer in humanity’s ability to change and to make for improvement personally. So I think I would like to think that without further major catastrophe to force governments and society to change that this will heighten recognition of the need to do that.

Marc Filippino
Emiliya Mychasuk is the FT’s climate editor. Thanks, Emiliya.

Emiliya Mychasuk
Thanks, Marc.

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Marc Filippino
It’s been nearly a year since the UK and the EU reached a dramatic last minute deal on how the two sides will trade after Brexit, but neither side was ever really happy. And now relations are really sour over post-Brexit trade arrangements for Northern Ireland. To talk more about this, I’m joined by the FT’s EU correspondent Andy Bounds. Hi, Andy.

Andy Bounds
Hi Marc. How are you?

Marc Filippino
I’m doing well. So, Andy, why are we still talking about Brexit?

Andy Bounds
Well, it’s a good question. The big problem with Brexit is that the UK wanted to diverge from the European Union. It didn’t want to stay in the single market. It didn’t want to stay in the customs union. It wanted to be able to set its own rules and make its own trade deals outside the bloc. That’s all fine. The problem is that in Ireland there is Northern Ireland, part of the UK, and the Republic of Ireland, an independent country which is in the EU. Nobody wants to put a border between those two places. So therefore, they had to find a solution that meant that goods could flow within the UK but not get into the single market in Ireland without putting customs controls on the actual island. So what happened was Boris Johnson agreed this protocol, which effectively puts a trade border in the Irish Sea. Therefore, goods that are going from Great Britain to Northern Ireland have to be checked, and that’s something that a lot of people in Northern Ireland resent. As you can imagine, you know, for example, at one stage at the lot they wouldn’t be able to get their sausages from the rest of Great Britain any more. Goods such as cheeses and parcels that you want to send, you cannot take your dog without hefty checks and paying a fee. Boris Johnson says unworkable; he’s going back to the EU. The EU has come up with some fixes, and the UK says they don’t go far enough.

Marc Filippino
Now we should mention that the UK’s push back is not entirely surprising. The UK was planning legislation as far back as September of last year to override key parts of the Brexit deal. Now, a year later, they’re still fighting over Northern Ireland, and they’re kicking around something called Article 16. Andy, what is Article 16?

Andy Bounds
So Article 16 is an article in the protocol is part of the deal, and what it says is we can suspend some of the checks if we feel they’re having a bad impact on society or if trade is being diverted. So if, for example, it’s becoming so hard to get stuff from GB to Northern Ireland that all the shops in Northern Ireland start looking to get stuff from Ireland instead? I mean, Northern Ireland is effectively part of the EU single market for goods, so therefore it’s easier for them to get stuff from Ireland itself or even from France than it is to get stuff from GB at the moment. Now again, this was a compromise to keep the peace in Ireland and a lot of these things were foreseen and the new EU says to the UK, well, you knew this might happen; you know, you knew what you were doing when you’re doing it. Boris Johnson claims I didn’t know it was going to be this bad, so I’m going to go back and I’m going to trigger Article 16, which will allow me to suspend certain parts of these checks. And then it puts the ball in the EU’s court as to what they might do in response.

Marc Filippino
Andy, what does this do to the relationship between the EU and the UK? Is it tarnished beyond repair?

Andy Bounds
I think it’s really, really tarnished it in the last few months. I mean, it wasn’t great to start with, but there was hope, certainly in Brussels, that there could be co-operation in areas like defence. Science, I mean the UK is supposed to still be part of the EU’s science programme which on the horizon it’s offered to pay into that to be able to participate in it. But the commission is basically blocking that because it says, why would we want to admit you to a club when you’ve already shown bad faith with the deals you signed? You know, they just don’t trust the UK’s word on anything. And so we’ve seen, you know, certain movement in the US, which obviously has great affinity with Ireland, and the president of the commission was over there talking to Joe Biden and people in Congress, and they, you know, they’re not happy with the UK’s position, either.

Marc Filippino
Andy Bounds is the FT’s EU correspondent. Thank you, Andy.

Andy Bounds
No problem.

Marc Filippino
Before we go, broadcasters in the US are competing fiercely for the rights to English Premier League games. Soccer is becoming more popular in the US media landscape, but also right now more and more Americans are cancelling their cable accounts and turning to streaming. And in many cases, sports is basically the one thing that keeps people watching cable. So sports rights are really valuable. Sources told the FT that Premier League rights could end up going for a record $2bn. That’s double what Comcast’s NBC paid for Premier League rights back in 2015.

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You can read more on all of these stories at FT.com. This has been your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

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