EU leaders to discuss contingency plan if UK talks fail by Bloomberg

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© Bloomberg. A line of European Union (EU) flags fly from masts outside the Berlaymont building, which houses the offices of the European Commission, in Brussels, Belgium, Monday, June 8, 2020. British and EU negotiators called on their political leaders to break off stalled negotiations over the two sides’ future relations amid signs that patience is running out. Photographer: Geert Vanden Wijngaert / Bloomberg

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(Bloomberg) – European Union leaders will discuss preparations for a possible collapse in trade talks with the UK when a summit is held later this week after France entered, wondering if she could hold Boris Johnson’s government to a deal.

The bloc’s 27 national leaders will meet in Brussels on Thursday – the same day the prime minister has threatened to step down if he considers a deal unlikely. With a deal at stake, the chiefs will revise their contingency plans, according to officials in Brussels.

They will also consider the need for strong, legally binding dispute settlement mechanisms in any deal after being stung by the UK’s announcement last month that it would unilaterally rewrite parts of the Brexit divorce deal. The move fueled mistrust of Johnson in EU capitals, adding another hurdle to any deal.

“We want to trust the United Kingdom, but what we have seen in recent weeks regarding the withdrawal agreement is extremely worrying,” French Minister for European Affairs, Clément Beaune, told reporters on Monday. “It is about how the UK will be a trusted partner in the years to come.”

As talks continue in the Belgian capital this week, EU chief negotiator Michel Barnier will brief the 27 EU affairs ministers on Tuesday on the state of the proceedings. As the UK pushes the bloc to ease its fishing requirements, the EU demands concessions from Britain, including limits on state aid it will be allowed to provide to businesses.

Negotiate a tactic?

The contingency planning talks are, to some extent, a negotiating tactic to lower expectations and put pressure on both sides to reach an agreement, a senior EU diplomat familiar with the talks said. However, he added that governments are now worried about the possibility of failure and want the European Commission to present emergency measures soon.

Britain’s chief negotiator David Frost said last week that his team will have to continue negotiating with the EU even if it fails to reach a free trade deal. Speaking to a committee of lawmakers in London, he said the two sides should make deals in areas such as flights and road transport.

But the EU is unlikely to agree to a series of sector-by-sector mini-deals, an EU official said. If the talks fail, the bloc would focus on making deals with the UK only where it sees an urgent need and where failing to do so would hurt its economy.

Johnson met with French President Emmanuel Macron and German Chancellor Angela Merkel this weekend to try to break the deadlock. A spokesperson for the prime minister said on Monday that time is running out, but the government has pledged to work hard to overcome its differences with the bloc this week.

No concession

France, however, has not yet indicated that it is ready to offer any concessions on fisheries that would unlock a deal, and has so far repelled attempts by Barnier and other EU countries. to compromise, a second EU official said.

Fish is “a big priority,” Beaune said. “It’s important for the UK and we respect it. But the United Kingdom must respect and understand that this is crucial for France and for the whole EU, ”he added. “We will defend our interests.”

France wants European vessels to enjoy the same access to British waters as they have under the Union’s common fisheries policy. But the UK wants to use a different method of calculating quotas that would leave its fleet with a much larger share of catches. It also wishes to subject access to its waters to annual negotiations.

© 2020 Bloomberg L.P.

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