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Brexit talks: the sticking points explained

Well, kind of. The EU and UK are trying to strike a deal on their future relationship before the end of the transition period at the end of last year. Time is now very tight because any deal will have to be ratified by both sides and in particular on the EU side this involves significant work, including a vote in the European Parliament. As Prime Minister Boris Johnson heads to Brussels to try and move the EU-UK negotiations to a conclusion in their dying days, it’s worth remembering one simple fact: the issues that are causing problems now are the same ones that have always been barriers to a deal.

If the Article 50 talks that ran between 2017 and 2019 were all about ending UK membership of the European Union, then the current negotiations have been about creating a new relationship between the two sides. While the former dealt with the rights of citizens in each other’s territory and the management of the Irish dimension, the latter has been focused on more general trading arrangements and the extent to which the UK wants to remain aligned with EU rules in the future.

What is at stake?

The UK left the EU at the end of January 2020, but under the withdrawal agreement entered a transition period during which existing arrangements remain in place. This runs out on December 31st.

What are the key issues?

The talks have come down to two key areas immediately obvious from the stated positions of the British government and the European Commission. fisheries and fair competition. On fisheries, As, a potent symbol of the failings of EU membership since the 1970s, with depletion of stocks and ever more of the catch being taken by non-UK vessels, it is not so surprising that the UK wants to be out of any obligations to retain elements of the Common Fisheries Policy. “British waters for British fishermen” are also one of the easier slogans to sell to a public that might be otherwise lost in the intricacies of all this. 

By contrast, the EU would like to retain its access, partly because so much of the UK catch ends up on European plates but also because the arrangements for fisheries management it proposes are more robust and enforceable than the more usual model of cooperation that exists. Either way, the EU has grounded its arguments in the language of customary practice, which matters a lot in the law of the sea: basically, how things were should be a strong guide to how things will be.

While evocative, fisheries remain a tiny part of either side’s economic activity. So, while it might make for punning headlines, it is unlikely to be the thing that makes or breaks this all. In addition, it has the great advantage that compromises can be found in a number of different ways, which makes it an ideal chip in balancing the other two, more fundamental problems.

 

And the fair competition issue?

EU chief negotiator Michel Barnier tweeted a picture of himself in Regent’s Park in London, taking a break from talks and looking, he said, for a “level playing field”.

This is the jargon for EU insistence that if UK companies are going to have access to the EU single market, then they must not have an unfair advantage in doing so. A key issue here is rules to control State aid to UK companies, but there are also rules to be agreed on areas like the environment and workers’ rights. The discussion covers issues like how these rules are put in place, what obligations will the UK have if EU rules change in future and, crucially, how this will all be overseen. This area of “governance” has been difficult from day one, with the UK baulking at involvement from EU courts.

 

And what about the special arrangements for Northern Ireland?

As part of the withdrawal agreement, there was a special protocol on Northern Ireland, designed to avoid the need for a trade border on the island of Ireland. How this will work in practice is being negotiated by a separate committee. How goods are checked as they cross the Irish Sea from the Britain to Northern Ireland is contentious and there are fears of disruption, for example to supplies to supermarkets in the North due to the need for new checks.

Another major issue here is the UK government’s publication of its Internal Markets Bill, which would allow it to breach the terms of the protocol in relation to the movement of goods between Northern Ireland and the UK and state aid to companies in Northern Ireland.

Coveney said this weekend that the EU would not sign an overall deal unless the UK removed the threat to breach the existing agreement. If an overall trade deal is done, this issue may effectively disappear, though disagreements may remain on the implementation of the protocol.

 

What are the prospects of a deal?

There is a lot to be done now in a short period of time. The most likely route forward would be for the EU to give some ground on the fisheries issue and the UK to fudge some of its red lines on the level playing field. This is politically treacherous for both sides. But failing to reach a deal would cause huge damage and both will also be aware of that.

For Ireland it is estimated that no trade deal would knock 3 percentage points off the growth rate for 2021 and cause severe problems for sectors like beef, which would be hit by high tariffs, or import duties, in the UK market. There would also be threats of delays to trade going via the UK landbridge to and from EU markets and higher prices in shops, particularly supermarkets.

The EU could agree some measures to try to limit the damage, though it is not yet clear what these would be. If there is a deal, on the other hand, both sides will presumably try to minimise any problems next December.

By Sanjida Jannat

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