Lobbyists grapple with Brexit puzzle
No one could accuse Michel Barnier of not listening to a range of views. Since he became the EU’s Brexit negotiator, he has met with organizations as diverse as a missile manufacturing company, a French megabank and a freezer-trawler association.
Yet figuring out how to influence the Brexit talks is a big headache for people who make their living lobbying EU institutions and governments. Some are trying to get to Barnier, some are focusing on key officials from the EU’s member countries and some are holding off to see how this unprecedented process develops.
Although both Barnier and the European Commission have talked about the importance of transparency, the key talks will take place behind closed doors and it is not clear yet exactly how the negotiations will unfold.
But almost every company and trade association has a stake in how Britain and the EU agree to separate and draw up their future relationship. So they are scrambling to find the best way to make their voices heard.
In the months after last June’s Brexit referendum, the lobbying community in Brussels started retooling in preparation for the negotiations, not least because the European Commission will lead the talks on the EU side.
The selection of Barnier, who oversaw post-crisis regulation of the financial services sector as a European commissioner, struck fear into the hearts of lobbyists across Europe. In 2014 he imposed a ban on his staff meeting bank lobbyists ahead of the publication of a draft law, a move welcomed by some transparency campaigners.
However, a Commission source who has worked for Barnier cautioned against reading too much into that ban.
“Barnier is open-minded, he listens to everyone and welcomes views and input from everyone,” said the source, who declined to be named. “This lobbying freeze was introduced because the lobbying was crazy on those banking regulations. But everyone was heard, we had all the input to draft the directive.”
In a memo published last month, Barnier’s team said he would ensure the negotiations were conducted “in a transparent manner.” He’s already started listing the organizations he’s met, including firms such as Microsoft and Crédit Agricole, the trade association of Luxembourg bankers, environmental NGOs and consumer groups as well as several think tanks, including the European Policy Center.
He also set out the rules for those who want to meet him, declaring that only those on the EU transparency register will get through the door and, even then, only if they “can add value to our assessment with evidence-backed positions.”
Significantly, the memo says Barnier “is mainly interested in meeting representative associations and civil society groups that can present the EU-wide impact of the U.K. withdrawal” — making it more difficult for individual companies and national associations to get a hearing.
But Barnier himself may not even be the right person for lobbyists to target. His room for maneuver is limited since his negotiating priorities will be determined by national diplomats in the Council of the EU, who can be hard to identify and are reluctant to disclose sensitive information.
Organizations trying to understand the U.K. government’s position have faced similar challenges, with one lobbyist describing the process underway in London as “a complete black box.”
National diplomats from the 27 countries remaining in the EU will also have an interest in keeping negotiations as secret as possible — so they can present at least the appearance of unity as they face off against Britain. The Commission and the Council have not yet agreed on a joint policy covering communications and transparency for the negotiations, according to EU sources.
If they can be compared to anything that has gone before, the Brexit talks may resemble negotiations to conclude a free trade deal, where the European Commission takes its lead from the Council of the EU’s weekly trade policy committee gatherings. Trade talks are notorious for their opacity and a regular target of transparency campaigners and left-wing MEPs who accuse the Commission of pushing a corporate-friendly agenda.
“This is high politics,” said Russell Patten, CEO of Grayling Brussels, a firm that advises Japanese multinationals on how to lobby the EU institutions. “The discussions are very much behind closed doors.”
European trade associations are using their membership networks to exchange intelligence and information about what’s going on in EU countries. A spokesman for BusinessEurope, the EU’s leading trade association, confirmed that it had set up a task force “which is preparing technical input regarding potential adverse effects from Brexit on businesses.”
In an effort to pool their knowledge, some U.K.-based lobbying consultancies are forming partnerships with German counterparts, given that Berlin will likely have the biggest say in the EU’s priorities. Last year Hanover Communications joined forces with the Berlin-based consultancy Johanssen + Kretschmer, while Finsbury, based in London, teamed up with Hering Schuppener, a German consultancy.
But some firms are staying on the sidelines for now. “Large multinationals are already engaging with the politicians and negotiators in Brussels, Berlin, Paris, London, but many companies are still waiting to see how things develop,” said Rory Chisholm, director of Fipra International, a consultancy with operations across Europe whose clients have included Apple, Novartis and eBay. “The risk is that it will be more difficult to get one’s views across if left until too late, as positions harden on both sides.”
Many big companies have been scarred by the experience of lobbying publicly for Britain to remain in the EU. Having lost that battle, some are keeping a much lower profile when it comes to the terms of Britain’s departure.
“Business and civil society are largely in retreat because they were so strongly aligned with the Remain campaign,” said Tom White, an adviser at Global Counsel, which counts amongst its clients Centrica, Santander and Ford. He said companies “are keeping their heads down.”
However, that does not mean companies and others are not trying to influence the Brexit process. Instead, they are providing what is sometimes described as “technical input” rather than making a big noise publicly.
“The responsibility of business is to ensure that politicians make choices armed with the best evidence about what really matters for firms on the ground,” said a spokesman for the Confederation of British Industry.
Associations representing financial services — one of the sectors that could be most affected by Brexit — have been amongst the most proactive in offering technical input to negotiators. The London-based International Regulatory Strategy Group has published proposals to maintain market access for U.K.-domiciled banks in the EU.
Last summer, banking lobbyists were among the first to call for a transitional period between the U.K.’s exit from the EU and the implementation of a new deal between Britain and the bloc — a stance largely accepted by the British government. In the longer term, many banks are preparing for a hard Brexit and have already put in place contingency plans to move some operations out of London to cities like Dublin, Frankfurt or Paris.
Other companies are betting on a similar outcome. “A lot of our clients are beginning to look at the U.K. and the EU as two separate markets,” said Matthew McDermott, EMEA director for Access Partnership, a technology consultancy that has worked for Salesforce and Dell.
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