Brexit News, Member News

Vulcan Insight | EU-UK Post-Brexit Trade Deal Increasingly Unlikely, Acknowledges Michel Barnier

In only their second face-to-face meeting since the start of the Coronavirus pandemic, EU and UK negotiators, this week, failed to make significant strides in the post-Brexit future relationship negotiations.

In the sixth round of negotiations between EU chief negotiator Michel Barnier and his UK counterpart, David Frost, the sides failed to reach a breakthrough on the key stumbling blocks: clear rules for a level-playing field for fair and open competition, fisheries, as well as the role of the European Court of Justice to oversee any potential agreement.

While the parties had “intense and useful” discussions on trade in goods, trade in services, energy, transport as well as police and judicial cooperation considerable divergences persist as the, according to Mr. Barnier, the UK Government continues to request single market-like benefits.

Answering reporter’s questions following the conclusion of talks at Europe House in London, the EU’s Representation to the UK, Mr. Barnier acknowledged in stark terms that “by its current refusal to commit to conditions of open and fair competition, and to a balanced agreement on fisheries, the UK makes a trade agreement, at this point, unlikely.” Reiterating on his previous comments, Mr. Barnier added that his team simply seeks to translate the joint commitments made in the Political Declaration into a legal text. The UK, however, “did not show a willingness to break the deadlock.”

In a statement published by David Frost, UK’s chief negotiator confirmed that it was “unfortunately clear” that negotiators will not reach the necessary “early understanding on the principles underlying any agreement” by the of July. Mr. Frost’s acknowledgement comes after UK Prime Minister Boris Johnson last month had spoken of a “very good” chance of securing a post-Brexit trade agreement this summer, adding that there was “no reason” why a deal could not be drawn up by the end of July.

Recognising the “rising risk of a no-deal,” EU Heads of State and Government ringfenced a €5 billion “Brexit Adjustment Reserve” in the EU’s next long-term budget to counter “unforeseen and adverse consequences” of Brexit in the Member States and sectors that are worst affected. Ireland, in particular, is expected to be the key recipient of the reserve’s money.

Meanwhile, UK media reported earlier this week, that the UK Government is stepping up preparations for trade on WTO terms as of 1 January 2021.

The next round of future relationship talks is set to kick-off on 17 August, this time in Brussels, though chief negotiators will aim to break the deadlock when they reconvene for informal discussions in London next week. While David Frost believes that an agreement “can still be reached in September,” it must be concluded by late October to grant sufficient time for ratification by the UK and European Parliaments and for translation into the EU’s multiple languages.

Compliments of Vulcan Consulting – a member of the EACCNY.