LONDON/BRUSSELS – Downing Street played down the prospect of reaching a trade deal with the EU in time for December, saying it will be very difficult – and blaming Brussels’ insistence on tackling tough issues upfront. The UK’s Chief Negotiator, David Frost, is meeting his EU counterpart Michel Barnier in London, in advance of the next round of formal talks next week, The Guardian reported.
But with the clock ticking to December 31, when the status quo transition is due to end, Prime Minister Boris Johnson’s official spokesman conceded that hopes of a deal were dwindling.
“The EU continues to insist that we must agree on difficult areas in the negotiations, such as EU state aid, before any further work can be done in any other area of the negotiations, including on legal texts, and that makes it very difficult to make progress,” the spokesman said.
“We would instead like to settle the simplest issues first, in order to build momentum in the talks, as time is short for both sides,” the spokesman added.
The EU has consistently said it wants to see the contentious issues of fisheries policy and state aid settled upfront. EU officials are exasperated however by the briefings about negotiations in London, pointing out that the UK has not yet tabled its own proposals for state aid.
“How can we negotiate this when we don’t even know what state aid in the UK will look like next year,” said a source.
Insiders say the UK is trying to “cherry-pick” and claiming it would be happy with a “bare-bones” deal, while making sizeable asks across the 11 sections of the negotiations which, when put together, amount to a deal of substance.
Johnson’s government is reluctant to cede any control over state aid policy, boasting during last year’s election campaign that one benefit of Brexit would be that the government could intervene more readily to help the struggling UK businesses.
The prime minister’s spokesman underlined that message on Tuesday, saying, “We’ll set out further detail of our domestic regime in due course. After the transition period, the UK will have its own regime of subsidy control, and will not be subject to the EU’s state aid regime. We have been very clear about that throughout.”
He added, “The UK’s future subsidy arrangements are a matter for the British people and parliament, not the European Union.”
Brussels regards state aid constraints as a key aspect of ensuring a level playing field, so that UK businesses cannot unfairly undercut their EU counterparts. With an EU council expected to be held in October to finalize any free trade agreement, time is running short.
During last year’s fraught negotiations over the EU withdrawal agreement formalizing the UK’s exit terms, Johnson made significant last-minute concessions – effectively allowing a border in the Irish Sea – to get his “oven-ready” deal done.
But he is under pressure from Brexit-backing Conservative MPs not to make fresh compromises now – and even to repudiate some aspects of the withdrawal agreement. One potential solution to the negotiating impasse that has previously been mooted is a series of separate deals on different issues – financial services, fisheries and so on.
But a senior UK official close to talks has previously revealed that the EU is not keen on a “Switzerland-style suite of agreements”, in reference to the 100-plus bilateral deals the country has with Brussels, as it “would be too complicated to manage for them”.
The EU is also keen to have an overarching deal on governance and dispute resolution. France’s EU affairs minister, Clément Beaune, said that no deal was a risk, but blamed the British government for the impasse.
“Things are not advancing because the UK would like to have its cake and eat it: to leave the European Union and have access to the European market,” he said.
Speaking on French radio, he said the EU would not compromise on linking market access to respect for its rules on health and the environment. The EU has said the UK can only have tariff-free, quota-free access to the EU market if it agrees to respect EU standards on environment, workers’ rights and corporate state aid. EU officials dismissed reports Barnier was refusing to discuss UK proposals on a future fisheries treaty.
“The UK has not presented new legal texts in the area of fisheries,” a spokesman for Barnier said.
“We have been engaging constructively and in good faith. Michel Barnier said at the end of the last round of negotiations that we have shown flexibility by taking note of prime minister Johnson’s three red lines and working on them. We have not seen, however, a reciprocal effort on the UK’s side regarding European priorities. We are now waiting for the UK to present concrete and constructive proposals,” he added.