Despite Brexit ultimatums, UK, EU look to Bloomberg deal


© Bloomberg. Boris Johnson, British Prime Minister, reacts during his bilateral meeting with Andrej Plenkovic, Croatian Prime Minister, at number 10 Downing Street in London, UK, Monday, February 24, 2020. Photographer: Jason Alden / Bloomberg


(Bloomberg) – Just as the UK’s trade talks with the EU appear to be heading towards a cliff, there is reason to suspect that things may not be as bleak as they appear.

On the surface, the meaning of the split is clear: on Tuesday, the EU dared Boris Johnson to walk away from talks before the October 15 deadline if he saw a deal as impossible. The next day, Johnson’s government said it fully intended to do so, if that is what it concludes.

This follows weeks in which statements from both sides barely went beyond reaffirming the need to keep trying, as the gap between them remains huge. EU Council President Charles Michel on Wednesday urged the UK to “put its cards on the table”.

Yet in private, officials are more optimistic. While politics are inescapable – and may still be final – experienced negotiators know that sometimes the worst times happen shortly before a deal is struck.

They recall Johnson’s phone call with German Chancellor Angela Merkel in October 2018, which prompted a UK government insider to inform that, due to his intransigence, an agreement to withdraw the country from the EU was effectively impossible. One was done nine days later.

The two sides are now trying to reach an agreement not only on their future trade relations, but also on a range of issues ranging from law enforcement cooperation to transport. Failure to reach a deal by the time the UK leaves the single market and EU customs union on December 31 would leave businesses grappling with tariffs, costs and border disruption.


Johnson said if he didn’t see a deal being considered by Oct. 15, he would pull the plug so companies have time to prepare.

The EU, whose leaders will discuss Brexit at a summit on the same day, does not recognize this deadline and plans to continue talking for as long as it takes.

Brussels officials familiar with the negotiations suggest that an elaborate choreography is being worked out, in which, despite some level of divergence, both sides will find a way to continue discussions in the second half of October.

The summit will be just a “stocktaking” exercise, which will not hamper the negotiations.

“Highly achievable”

EU chief negotiator Michel Barnier told a meeting of European ambassadors on Wednesday that he did not expect the UK to step down on October 15, officials said.

Meanwhile, his British counterpart, David Frost, told a parliamentary committee that while there are “some really difficult things to resolve that are not yet resolved” the negotiations have been constructive.

“I think a deal is eminently achievable, and could be reached – but, also, it’s possible that we won’t get there, and we’ll have to see what the next few weeks bring,” Frost said in a statement. hearing alongside Cabinet Minister Michael Gove.

There are also signs that the two sides are moving closer to overcoming some of the biggest hurdles to a deal: what rules limiting state aid the UK will have to follow and what access EU fishing vessels will have. to British waters.

Frost told lawmakers the UK was ready to discuss the terms of business subsidies that go beyond what “you normally do in a free trade agreement.”

And Barnier told the ambassadorial meeting that member states should be prepared to be more flexible on fish, an official said. France has been pushing hard to preserve the bloc’s current access to British waters, which Johnson’s government has declared unacceptable.

EU officials are also increasingly convinced that Johnson will agree to continue to apply the principles of the European Convention on Human Rights – something extremists in his ruling Conservative party have already resisted.

Senior officials in Brussels note that the background music around a negotiation is good when both parties start to speak the same language. Again, there are signs of progress.

After a phone call with Johnson on Wednesday afternoon, Michel tweeted that “the EU prefers a deal, but not at any cost”.

Shortly after, Gove was asked for his assessment. “We are obviously keen to make a deal,” he said, but “we won’t do it at any cost.”

© 2020 Bloomberg L.P.


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