The UK and EU have published competing visions for a post-Brexit trading relationship. Has progress stalled?
The negotiations on the future partnership between the UK and the EU started with each side publishing their own views of what the future relationship might contain. As we discussed in May, these competing drafts and the fanfare surrounding them highlighted the “fundamental differences” between the parties more than their common purpose.
There have been nine formal rounds of negotiations and we are regularly told that progress is being made, but significant differences remain and there is no precise indication about the very many compromises that will need to be made for the negotiations to reach a successful conclusion. So, for example, the statement from the EU following the most recent round of negotiations states that there are “points of convergence … in particular on some aspects of trade in goods, services and investment, civil nuclear cooperation, and participation in Union programmes” and “positive new developments on some topics such as aviation safety, social security coordination, and the respect of fundamental rights and individual freedoms”, but that there is “a lack of progress on some important topics like the protection of personal data, climate change commitments or carbon pricing … as well as persistent serious divergences on matters of major importance for the European Union”. The UK did announce in mid-August that it had provided a new “consolidated” text capturing the progress made, but it has not been made public. This lack of precise information on progress is understandable since revealing details of the compromises that are being made would encourage interest groups to campaign for changes and this would complicate the negotiations.
In the absence of precise information to analyse, attention has focussed instead on a number of highly political issues that are put forward as deal-breakers: the level playing field provisions – in particular state aid, fisheries and the implications for Northern Ireland. A recent Herbert Smith Freehills webinar on 24 September 2020 sought to explain the legal issues behind the problem areas of State Aid and Northern Ireland and James McBride from Hanbury Strategy commented on how these might be resolved politically. If you would like to access the webinar recording, please contact us here.
It is clear that reaching an agreement before the end of the transition period is in the interests of both sides, although the limited time and the political nature of many issues may well produce a rather unambitious agreement, even if certain issues have to be set to one side for later resolution as discussed in our December 2019 View from Brussels.
This underlines the message in another Herbert Smith Freehills webinar (to access it, please contact us here) that all realistically likely outcomes will mean major changes in the trading relationship between the EU and the UK on 1 January 2021. Frictionless trade will end.
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