Post-Brexit Alchemy – How the UK Seizes Opportunity

  • The Brexit negotiations were not always easy, but all parties are pleased with the outcome.
  • The UK retains good access to European markets.
  • Particularly in sensitive markets linked to sovereignty issues, without the European Union showing its displeasure.

Brexit was prophesied as a disaster, but Britain is sitting rather comfortably in the new European order. The United Kingdom’s (UK) withdrawal negotiations with the European Union (EU) were arduous, to say the least. Talks were characterised by intransience from Brussels and sheer immovability from the UK’s unflappable chief negotiator, David Frost. But an eleventh-hour agreement now outlines future EU-UK relations and Britain has reason to be pleased.

The UK finds itself — post-Brexit — enjoying an advantageous trade situation, notably through continued access to calls for tender made by the European authorities.

Subsequent to the signing of the withdrawal agreement, Boris Johnson began flashing his competitive colours. The downgrading of the EU ambassador to the UK being a clear shot across the bow that bordered on derision. The message to Brussels:

Expect no deference.

Brexit was prophesied as a disaster, but Britain is sitting rather comfortably in the new European order.

As Stefan Lehne, writes for Carnegie Europe, the manner in which the UK’s integrated review disregards cooperation with the EU demonstrates that “the ideological need to distance the UK from its past as an EU member still dominates the thinking in London.”

At the same time, the UK is unwavering in its pursuit of the most advantageous trade relationship, one that sees it benefitting from access to the European market with the least possible constraints and the maximum in opportunity.

Sovereign Europe

The EU’s Franco-German leadership, according to the German ambassador to France, Hans-Dieter Lucas, have learned many lessons from the coronavirus crisis and developments under the presidency of Donald Trump, as well as the rise of China. The conclusion, the ambassador says: “Europe must become more sovereign.”

His words echo French president Emmanuel Macron’s continued calls for a “new European sovereignty,” sentiments that follow on from former-president of the European Commission, Jean-Claude Juncker’s state of the Union address from 2018:

The geopolitical situation makes this Europe’s hour: the time for European sovereignty has come. It is time Europe took its destiny into its own hands. This belief that ‘united we stand taller’ is the very essence of what it means to be part of the European Union.

Indeed, in calls for tender for its institutions, the EU states that only countries “coming within the scope of the Treaties” (i.e., EU members), as well as international organisations, can participate. And yet, since Brexit, it is generally stated that UK entities and residents can participate in tenders through Articles 127(6), 137 and 138 of the EU-UK Withdrawal Agreement.

Permitting the UK to participate in such bids, however, creates considerable ambiguity, and opens the EU up to charges of inconsistency in its messaging, even naivety.

The EU’s annual report on monitoring of state-level energy subsidies is a good example of this. The Directorate-General for Energy outsources to contractors due to the intensive data collection, validation, and analytical skills required for this task spanning the 27 EU member states.

While the data involved is not necessarily highly sensitive, an open door to the UK on this tender certainly does little to foster European sovereignty. And yet, the tender specifications on the EU’s tender portal clearly state that UK-based companies are to be considered residents of a member state for the purpose of eligibility.

(Section 2.2 of tender specifications, ‘Study on Energy Subsidies and Other Government Interventions in the EU’ — ENER/2020/OP/0030)

Far from this being an anomaly, the UK has access to billions of euros worth of calls for tender from EU institutions that it would not have had in a no-deal scenario, with the minor consequence of being excluded from sub-threshold calls for tenders (those falling below €139,000-€438,000 for procurement, depending on contracting entity, and below €5,350,000 for construction services).

Trusting neighbours

This opportunity to enter tenders also extends to sensitive, even strategic, markets. One of these is border surveillance, a domain that all too apparently raises issues of sovereignty and data protection.

The call for tender launched by the EU’s border and coast guard agency, Frontex, for the surveillance of borders and migratory movements is an important example of where things get problematic.

The procurement concerns airborne intelligence, for which Frontex lacks its own resources. Given the technical requirements, there are only a handful of companies in Europe capable of offering proposals, including Aerodata of Germany, EASP of The Netherlands, CAE of France/Luxembourg, and notably Alto Aerospace and DEA, both of the United Kingdom. DEA is actually already present on the current mission for Frontex.

With lenient rules governing UK participation in calls, it is only logical that British contractors would take advantage of EU indecisiveness concerning data protection. This is a clear opportunity for British businesses, but it is surprising in the current context, and considering the strategic importance of border surveillance for the EU.

Such concerns apply to all UK contractors, but DEA is of particular note as it is believed to be among the best positioned candidates to be included in the initial framework contract.

While observers might expect Brussels to pay more attention to potential conflicts of interest in this case, given the recent rhetoric, the hire of British contractors could suggest a downgrading of sovereignty as a priority.

Speaking in January, Loiseau stated that there are “issues on which we have to be autonomous,” with defence being one of them.

On the other hand, decision-makers might be too occupied by other pressing issues — namely the shocks of the pandemic — to register what is at stake.

On its surface DEA is a private company providing aircraft operations, management, and maintenance services. But it is composed of personnel coming almost exclusively from the British armed forces. It also regularly contracts for them and the UK intelligence services. It might be said that oaths of allegiance to the Crown, in this respect, have already very much been taken.

These details could be concerning in the context of the storms brewing between the EU and the UK over data governance policies. While the UK is still broadly aligned with the General Data Protection Regulation (GDPR), having only just exited the union, it has divergent notions about data protection, information sharing, and a decidedly different relationship with the United States, with which it has historically traded intelligence — notably as part of the Five Eyes alliance.

If in this example, DEA is selected for subsequent contracts, this could, indirectly or otherwise, present Britain with an opportunity to monitor its distant interests at the expense of the European taxpayer. A considerable triumph for the island nation, and perhaps a sign of a broader short-sightedness from continental lawmakers.

Such bureaucratic cracks will be a welcome contribution to British plans for data exchange programmes with global reach.

Indeed, as UK Minister for Media and Data John Whittingdale stated recently regarding data flows, “there is a great opportunity for the UK to make use of its independent powers to deepen our strategic international relationships and forge new bilateral and multilateral alliances.”

Such considerations, for the moment, seem to have escaped the notice of the European Parliament’s Subcommittee on Security and Defence and its chair, France’s Nathalie Loiseau.

Speaking in January, Loiseau stated that there are “issues on which we have to be autonomous,” with defence being one of them. Given her noteworthy calls for reduced reliance on the United States, she may have one or two things to say about these developments in the Frontex procurement process: more specifically, the ensuing consequences for confidentiality and data sovereignty.

Stephen Li

Independent consultant on security and defense issues for about ten years.

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