Brexit News, Member News

Vulcan Insight | Progress, but critical issues remain in Brexit Negotiations

In her most optimistic comments yet on the ongoing post-Brexit future relationship negotiations, European Commission President Ursula von der Leyen acknowledged that negotiations had intensified since last week’s very public falling out and that they were making “good progress”.

However, speaking to press following a videoconference with Canadian Prime Minister Justin Trudeau, she conceded that more progress was needed on the two remaining critical issues of the level playing field and fisheries.

While she did not specifically mention governance, an agreement on the workings and dispute resolution of a future agreement also continues to be outstanding. According to the Commission President, the two chief negotiators and their teams are extensively exploring different mechanisms for a mutually acceptable dispute resolution mechanism that would allow either side to suspend parts of the agreement should the other clearly breach its obligations under the agreement.

The UK Government’s Internal Market Bill, including its contested provisions on state aid and Northern Ireland trade, have reinforced the need for a clear and enforceable mechanism to be in place.

While not acknowledging that negotiators had entered the much sought-after “negotiating tunnel,” which would mark the final stages of the negotiations, Ms. von der Leyen said that negotiators are in “close contact on an hourly basis because the negotiations have now been intensified.” While this certainly marks a significant and much-needed departure from the slow negotiating pace of the past nine months, negotiations are still ongoing across all eleven parallel negotiating tables.

President von der Leyen’s comments come after the Commission’s Director General of the Financial Services department (DG FISMA) told Members of the European Parliament’s ECON Committee on Tuesday that the Commission is “almost ready” to make its decision on whether to grant the UK’s financial services equivalence post-Brexit.

Speaking to MEPs, Mr. Berrigan commented that the Commission still needs more information from its UK partners on its future directions and scope of departure from EU legislation, saying that the Commission’s decisions would not be “about equivalence today, [but] about equivalence going forward.” He also added that his department needed additional “clarity” on how UK supervisory authorities plan to use temporary regimes for firms based outside the UK, but within in the European Economic Area.

The comments by the Commission’s top civil servant on financial services come as his department has largely refrained from granting targeted, sector-specific, equivalence decisions to the UK ahead of its departure from the Single Market on 31 December. Instead, he argued that the UK will be a forum “like we have offered the United States” in order to discuss equivalence decisions.

Compliments of Vulcan Consulting – a member of the EACCNY.