Timeout on trade talks: chances of Brexit deal shrink as major obstacles remain

The chances of an agreement being reached are “unlikely” according to the EU’s chief negotiator, as the seventh round of UK-EU trade talks stall.

David Frost Dinner Michel Barnier, photography by Number 10 on Flickr

Last week, the United Kingdom and European Union’s seventh round of future relationship negotiations collapsed with the UK’s Chief Negotiator David Frost proclaiming that “little progress” had been made.

Discussions between Frost’s British negotiating team and Michel Barnier’s Brexit task force took place in Brussels between August 18 and 21. 

Central to the negotiations were the questions over what access European fishing boats will have to Britain’s newly independent coastal territory and whether the UK would sign up to Barnier’s proposal for a “level playing field.”

The EU’s published agenda showed that 16 hours of the seventh round of negotiations were spent discussing if continental vessels would have unfettered access to the UK’s fishing waters and whether the UK would have to align to the EU’s state aid rules as a part of the level playing field.

Barnier bemoaned Britain’s unbending Brexit position and attacked the tactics of Frost’s negotiating team accusing them of having “not shown any real willingness to move forward on issues of fundamental importance for the European Union.” The former French agriculture minister added that the chances of a deal being reached remain “unlikely.” 

His British counterpart, David Frost, reiterated that an “agreement is still possible, and it is still our goal, but it is clear that it will not be easy to achieve.” However, the long-standing diplomat and former British Ambassador to Denmark pointed the finger for the stalled talks at Barnier’s feet. He argued that the EU had made it “unnecessarily difficult” for progress to be made as the bloc refused to discuss other major issues until the two parties agreed on fisheries and a level playing field.

Neither Frost nor Barnier appeared to suggest a route to a deal in their post-negotiation statements. Initially, Barnier stated that the EU had “respect” for the UK’s concern over sovereignty and regulatory autonomy; however, he then added that the level playing field was a “non-negotiable pre-condition” that was “not going to go away.” 

By comparison, Frost’s Downing Street statement reaffirmed that any deal struck between the British and European negotiating teams would ensure that the United Kingdom can “regain sovereign control of [the country’s] own laws, borders, and waters.”

When the United Kingdom left the European Union on January 31, it fired the starting gun on an 11-month transition period. Earlier this summer, the United Kingdom had the opportunity to extend the transition period. With little progress made, Michel Barnier and some leaders of opposition parties called for an extension to the talks. However, with warnings of a multi-billion pound Brexit extension bill the UK government refused to accept Brussels’ suggestion of a lengthier transition period.

David Frost said that “it is not in the UK’s interest to extend” talks. Frost, the former CEO of the Scotch Whiskey Association, added that: “extending would simply prolong negotiations, create even more uncertainty, leave us liable to pay more to the EU in the future, and keep us bound by evolving EU laws at a time when we need to control our own affairs.”

Earlier this week, the Sun reported that the UK had attempted to “inject some spark” into trade talks with a paper documenting a proposed free trade agreement. The proposal covered trade of both goods and services between the United Kingdom and the European Union. 

But Barnier rebuffed Britain’s Brexit blueprint and declared that it was an “unrealistic” basis for a trade deal as it did not address the level playing field, or for that matter, how to settle disputes between the UK and EU without the European Courts of Justice after the conclusion of the transition period. 

Barnier’s statement also claimed that the level playing field has already been “committed” to by the UK Parliament. He cited paragraph 77 of the political declaration that stated that there will be “robust commitments to prevent distortions of trade and unfair competitive advantages.” 

However, when Boris Johnson negotiated some concessions last October to alter parts of Theresa May’s deal with the EU he also ensured that May’s clear commitments in the political declaration, which is not legally binding, to a level playing field were deleted. 

Martin Howe QC’s article in the Daily Telegraph argued that the modifications to May’s agreement ensured that there are no commitments to a level playing field. Howe claimed that the “previous commitment to shadow the EU rules on competition and state aids in Theresa May’s withdrawal agreement has been replaced with a more open-ended commitment.”  

Barnier’s criticism may also come as a surprise to many government officials. For some time, Michael Gove and others have made clear that the UK intends to complete an agreement that centres around parts of previous EU agreements. Primarily parts of the one signed with Canada in 2016.

One official told the Daily Mail that: “a free trade agreement similar to the one of the EU already has with Canada… But what we cannot have is a form of relationship which requires alignment or one that constrains us to the EU’s rules.”

With just 126 days until the UK leaves the pillars of European Union membership and takes control of its rulemaking and regulatory powers, both negotiating teams have set themselves the fast-approaching October deadline to agree. Barnier has warned Britain that “the clock is ticking.”

Nonetheless, Barnier and his Brussels delegation will travel to London to meet David Frost’s team in little under two weeks. On September 7, the United Kingdom and the European Union will start the eighth round of trade talks.