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The UK-EU trade deal negotiations, once again, hit traction instead of progress

Despite the Coronavirus pandemic, the government must still tackle the unfinished issue of Brexit, embarking on EU-UK post-Brexit trade talks

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Image Credit: ChiralJon

Amidst the Coronavirus pandemic, the Brexit conundrum hasn’t gone away. The UK sits in an eleven month ‘waiting room’, which it entered on the 31st of January, and increasingly it is looking likely that the nation will face an appointment with a no- deal scenario, rather than a much wished for orderly withdrawal.

COVID-19 hasn’t created the current impasse in the negotiations in any practical sense, as negotiations recently resumed via videoconference. Instead, the current negotiations are at a standstill due to disagreement concerning the timescale re-drawing up an agreement and as a result of what Michael Gove has characterised as ‘big philosophical difference”.

Member states within the EU, particularly Germany, are believed to be in favour of extending the transition period by two years as a result of the pandemic and under the European Union Withdrawal Agreement Act of 2020 this is the maximum possible extension that can be made to such a transition period. This suggests that the previous concern of the ERG (European Research Group) that the EU would of utilised the backstop in Theresa May’s withdrawal agreement to keep the UK in the transition period indefinitely wasn’t ill founded. Despite Boris Johnson successfully removing what he called the “anti-democratic backstop”, it remains clear that the EU is anxious about a change to the status-quo in regard to the UK’s relationship with the trading bloc.

Meanwhile, the UK government has indicated that it is prepared to leave the negotiations on WTO (World Trade Organisation) terms if what Michel Barnier describes as “limited progress” continues. The UK government has summarised its objectives in a thirteen page document that suggests that the UK is seeking a hybrid-like free trade agreement, which draws on free trade agreements that the EU has made with Canada, Japan and South Korea. Barnier has criticised the UK for assuming that it can simply copy and paste previous free trade agreements; although with the short-time frame for waging a deal being a critical factor it remains likely that the structures of previous deals will be valuable in providing a basic framework.

The heart of the ‘roadblock’ in the negotiations has its origins in both parties’ having different ideas about how to negotiate different aspects of the deal. The EU is determined that any agreement concerning fisheries is also linked to the wider economic agreement. The UK has put forward separate agreements for areas such as law enforcement and fisheries. An agreement concerning fisheries is the point of contention and the UK realise that this is their trump card; meaning that any movement on their redlines most likely won’t take place until the final hours or until there is any sign that continued access to British fishing waters will result in unique access to the EU’s financial sector.

COVID-19 hasn’t brought a halt to the back and forth rhetoric of both sides’ key negotiators, with David Frost, the UK’s chief negotiator, criticising the EU for treating the UK as an “unworthy” partner and Barnier has insisted that current UK proposals are “unrealistic”. Mr McAlister, an MEP for CDU (Angela Merkel’s party), has said that “both sides, unfortunately haven’t made any tangible progress at all on fisheries”, proving that progress on this issue remains slow. The UK’s stubbornness is most likely motivated by the desire for Britain to be treated as a “sovereign equal” and Johnson’s government is most likely worried about betraying it’s new northern voters, with which taking back control of fishing rights is an important issue.

Interestingly, Sir Keir Starmer, the newly elected Labour leader, hasn’t called for an extension to the transition period. While speaking on LBC he voiced his preference for “negotiations” to be “completed as quickly as possible” and said that we should “see how we get on”. The Labour leader’s approach is starkly different to his approach to negotiations while serving as Brexit Secretary, under Jeremy Corbyn, and indicates that the Labour party have conceded, in light of the 2019 election result, that extending Brexit isn’t necessarily what the British public want.

Despite the media concentrating on UK-EU negotiations, it shouldn’t be forgotten that the UK is also in the process of negotiating a free trade agreement with the United States. Liz Truss, International Trade Secretary, has pointed to the equal importance of these negotiations in the face of the current economic turmoil, as she insisted that “increasing transatlantic trade can help our economies bounce back”.

Emily Thornberry, shadow International Trade Secretary, has urged the UK to be “wary” about its dealings with the US and Donald Trump’s intentions. Despite this scepticism, the National Office for Statistics found in 2018 that the UK exported £123 bn worth of goods to the US, in comparison with only £57bn worth of goods to Germany. These statistics emphasise the importance of the UK not holding a Eurocentric mind-set when it comes to forging trade deals in this extremely volatile and unprecedented economic climate.

While speaking to The Times in an interview, James Dyson, a British entrepreneur, called for the UK “to stick to our guns” and it appears that this is the exact mentality that the UK government has adopted for now. Only time will tell, however, if this will result in a deal made at the 11th hour.

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