Insight
EU-UK negotiations: No need to panic (yet) by Sam Lowe 12 June 2020
A deal between the EU and UK remains possible. But neither side is likely to compromise on its current negotiating position until later in the year, when the cost of failure will become significantly more tangible. The fourth round of negotiations between the EU and UK over the nature of their future relationship concluded last week to little fanfare. The outstanding issues – disagreement over access to fishing waters, the so-called ‘level playing field’ provisions, and the structure of the agreement – are well known and remain unresolved, while other lesser-known disputes bubble beneath the surface. Yet, even without a global pandemic consuming political attention, the chances of an agreement being reached before the summer were always slim to non-existent. Michel Barnier and David Frost, the EU and UK chief negotiators, are both constrained by their respective negotiating mandates and unable to make the compromises necessary to get a deal over the line. Only when Boris Johnson and EU leaders re-engage with the negotiations later in the year will we know if there is a deal to be done. As I have written previously, despite the current hostilities, it is possible to map a route through the current impasse towards an agreement that might be acceptable to both sides. But concluding a deal will require both parties to step away from their opening negotiation positions and accept alternative means of achieving their objectives. One example: the EU fears that the UK will pour money into British companies to give them a new advantage over their EU-based competitors. To avoid this, the EU has so far insisted that EU state aid law must continue to apply in the UK indefinitely, but it should instead focus on the effectiveness of the UK’s state aid regime while retaining the ability to re-impose tariffs in the event of a breach by the British. In return, the UK needs to accept the broader principle of non-regression, and commit to maintaining existing levels of protection. It should also agree that its level playing field commitments will be subject to dispute settlement, with the possibility of concessions being withdrawn in the event of a breach (as it will have to concede in a trade agreement with the US). This should be less contentious than it first CER INSIGHT: EU-UK negotiations: no need to panic (yet) 12 June 2020
info@cer.EU | WWW.CER.EU
1