Last week marked a hand-over from the technical Brexit negotiations back to the negotiators’ political masters.  After four rounds of talks on the future EU-UK relationship, it appears that the UK and the EU are increasingly talking past each other.  With both sides seeming to accept that the transition period will finish at the end of this year, a no-deal exit from current arrangements at year-end looks increasingly likely.  It will take significant political will on both sides to step back from the brink, yet their focus is on the more immediate challenges of COVID-19.

This blog post outlines the negotiations to date, the main points on which the UK and EU disagree, the prospects for the “high level meeting” that will follow this June, and the principal considerations in whether a deal can be reached this year.  If no deal is reached, the UK will either have to trade with the EU on World Trade Organization terms – which would hit UK businesses and consumers hard – or accept an extension of transitional arrangements with the EU – which it has repeatedly ruled out.

Opening Positions

Both UK and EU had to expedite the preparatory work on their initial positions.

Thanks to informal “seminars” conducted in January, the Commission was able to present proposals for the negotiating mandate, which would then be given to the EU negotiator, Michel Barnier.  These “Negotiating Directives” were approved by the Council on February 25 (see here).

These are very similar to the initial mandate given by the Council in 2018, and focus on preserving the EU’s internal market. The EU, however, had to adapt to the UK’s new position, set out in the Political Declaration of October 17, 2019, asking for a trade relationship “on the lines of the FTAs already agreed by the EU in recent years with Canada and with other friendly countries”. The EU stated that it was prepared to offer a “zero tariffs, zero quotas” agreement, but on the condition that the UK commits to a “balance of rights and obligations, and a level playing field”. It also insisted that the entire deal should fall under an “overall governance framework”.

Two days after the presentation of the EU mandate, the UK published its own “negotiating strategy” (see here).  This makes it clear that London is not prepared to compromise on the recovery of its full national sovereignty.  It confirms the UK Government’s strong intention to fully regain its “legal autonomy” and the “right to manage (its) own resources”.  The UK “will not agree to any obligations for our laws to be aligned with the EU’s, or for the EU’s institutions, including the Court of Justice, to have any jurisdiction in the UK”.  As to the structure of the deal, the UK would also like to see the comprehensive free trade agreement concluded separately, and “supplemented by a range of other international agreements covering, principally, fisheries, law enforcement and judicial cooperation in criminal matters, transport, and energy”.

The distance between these two positions showed just how difficult a negotiation this was likely to be.

The Negotiations’ Terms of Reference

On February 28, the two sides agreed on the “Terms of Reference” for their talks – essentially, their format and calendar (see here).

• The negotiations are led by the Commission’s chief Negotiator (Michel Barnier), Head of the Task Force for Relations with the United Kingdom (UKTF) and on the UK side by the UK’s Chief Negotiator (David Frost), Head of Task Force Europe (TFE).
• Several “negotiating groups” meet alongside the plenary negotiating sessions, working under the guidance of the Chief Negotiators and/or Deputy Chief Negotiators. There are 11 such groups: on “Trade in goods”, “Trade in Services and Investment and other issues”, “Level Playing Field for open and fair competition”, “Transport”, “Energy and Civil Nuclear Cooperation”, “Fisheries”, “Mobility and Social Security Coordination”, “Law enforcement and judicial cooperation in criminal matters”, “Thematic Cooperation”, “Participation in Union Programmes”, and “Horizontal arrangements and governance”.
• Full rounds of negotiations were, in principle, supposed to take place every two to three weeks, alternating between London and Brussels.

Continue Reading The Brexit Negotiation – In Deadlock?