This is, what I believe the ‘kids’ would call, a ‘hot take’[1] on the European Parliament’s Industry, Research, Telecoms and Energy Committee’s workshop on Brexit and Industry and Space Policy Workshop held this afternoon.[2] There honestly wasn’t really anything new for anyone who’s been paying attention to Brexit for the past two years, and the first two speakers spoke more on general industrial and trade policy than space policy specifically but I will recap the discussion and then give some of my own general thoughts. I have discussed this before, so please refer to my older posts for some background which I won’t regurgitate here.[3]
The Workshop
So we started the proceedings with the general caveat that we still don’t know what the EU-UK relationship will be after March 2019 but also it’s unclear what the UK’s post Brexit industrial, economic or space policy will be so there’s lots of uncertainty. Indeed, uncertainty is about the only thing that is certain, and it was mentioned more than once that we are now , or were some time ago, at the point where businesses have to start operating on the assumption of the worst case scenario.
The first presentation was from Reinhilde Veugelers, Senior Fellow at Bruegel. The main thrust of her presentation was that the interdependence of supply chains, intra EU and globally, means that they are more sensitive to trade barriers and impediments to the smooth flowing of goods. This is particularly true in the aerospace/space sector where the ease of moving stuff throughout the EU has led to a specialization in countries/regions.
The second presentation from Luisa Santos, Chair of BusinessEurope’s Brexit Task Force, was more focused on what business is looking for. She said that there needs to be a ‘smooth transition between the UK being a Member State to it not being a Member State, she said that this is a key concern for business. However, she said that while it is important for the EU to have a close relationship with the UK post Brexit it was more important, vital even, to ensure the preservation of the integrity of the single market. She also made a comment on Rule of Origin[4] pointing out that even if the UK-EU has a trade agreement rule of origin stipulations may mean nevertheless that businesses have to reduce the parts procured from the UK in order to maintain value added percentages.
The third presentation was from Jean-Jacques Tortora, head of the European Space Policy Institute. He started out by pointing out that the UK is far more business orientated on space than most European countries and that the UK is also particularly sensitive on defence and security issues which it is also a strong contributor to. Speaking on Copernicus, he said that the main thing the UK space industry would have to worry about is being able to win contracts for future satellites, however Galileo is another issue. Galileo has been subjects to quite a bit of consternation, at least in the UK, and he argued that this proves Galileo’s value. Specifically, re Galileo the UK is worry about contracts for future satellites and PRS access. He also argued that loss of the ability to build new assets for EU space programmes could imperil the UK’s ability to retain ‘critical mass’ in its space sector threatening the UK’s ability to remain competitive.
Thoughts…
As I said, this is a topic I have covered before, and nothing had really changed. In fact that is basically the problem, here we are two years on, six months to go and we still have no idea what the UK-EU relationship post-Brexit will be like. At this point we have to assume ‘no deal’. Brexit was going to be a tough thing to do anyway but this government have proven to be unbelievably incompetent. Take the recent ‘debacle’ by Theresa May, she says that she’s unwilling to risk the unity of the UK for a deal with he EU, yet she seems to be unable to comprehend that the EU are unwilling to risk the unity of the single market for a deal with the UK. As the second speaker said, yes European businesses want to maintain as ‘normal’ a trading relationship with the UK as possible but they value the single market more.
I’d be opposed to Brexit no matter what (though at this point I’d be over the Moon for the ‘Swiss option’ or hell, Canada) but the ‘policy’[5] currently being pursued by this government is insane. The government’s one Innovation and Growth Strategy for the space sector had Galileo being fairly central to hitting the growth targets and yes as the UK governments own, recently published ‘guidance notice’ says, on our current course:
The UK will no longer play any part in the development of Galileo or European Geostationary Navigation Overlay programmes. This means that UK-based businesses, academics and researchers will be unable to bid for future EU Global Navigation Satellite System contracts and may face difficulty carrying out and completing existing contracts. For example, it may not be possible for businesses or organisations which currently host Galileo and European Geostationary Navigation Overlay ground infrastructure to continue to do so.[6]
And quite frankly the government’s not even doing ‘no deal’ particularly well, if they were serious about it or understood the implications they’d be building news customs posts and hiring more staff and agents, maybe if they had been doing so the EU commission would take the ‘threat’ more seriously…
Anyway, basically things haven’t changed in two years, the clock is rapidly running out, and as Salzburg has demonstrated May and her government are incompetent[7] so brace for impact.
[1]Though perhaps not, I am not exactly conversant in the lingo
[3]https://thomascheneyblog.wordpress.com/2017/02/06/spexit-what-does-brexit-mean-for-the-uks-place-in-space-part-1/; https://thomascheneyblog.wordpress.com/2017/03/06/spexit-what-does-brexit-mean-for-the-uks-place-in-space-part-2/; https://thomascheneyblog.wordpress.com/2017/06/09/spexit-uk-general-election-2017-brexit-and-the-uk-space-sector/; https://thomascheneyblog.wordpress.com/2017/10/16/sentinel-5p-and-brexit/
[4]See Sam Lowe’s attempts to explain what these are: https://medium.com/@SamuelMarcLowe/explaining-cumulative-rules-of-origin-2c13fb4dfca1, https://medium.com/nodust-on-brexit/no-where-is-it-really-from-92bec918161a
[5]If flailing about like a delusional headless chicken can be called a policy
[6]https://www.gov.uk/government/publications/satellites-and-space-programmes-if-theres-no-brexit-deal/satellites-and-space-programmes-if-theres-no-brexit-deal
[7]David Allen Green, ‘Theresa May’s negotiating flaws were laid bare at Salzburg’ Financial Times (21 September 2018) https://www.ft.com/content/3cfac4b0-bd88-11e8-94b2-17176fbf93f5