Brexit talks head for October showdown (again)

 

Brexit talks head for October showdown (again)

 

EU and UK remain a long way apart, making a September deal unlikely.

 

By CHARLIE COOPER 8/21/20, 4:33 PM CET Updated 8/21/20, 4:39 PM CET

https://www.politico.eu/article/brexit-talks-stalemate-october-showdown-again/

 

LONDON — It's all set up for a last-gasp dash for a deal in October. Either that, or no deal at all.

 

The seventh formal round of post-Brexit future relationship talks between the U.K. and the EU wrapped up Friday with the familiar stalemate and mutual blame. So familiar in fact, it was almost a greatest hits album, with EU chief negotiator Michel Barnier dusting off his favorite line about the ticking clock, and even covering the Theresa May classic: "Brexit means Brexit."

 

The British side agrees that "Brexit means Brexit" — and therefore they are deeply frustrated at Barnier's attempt (as they see it) to bind the U.K. to much the same set of rules as EU members in terms of its ability to subsidize industry and control British fishing waters.

 

David Frost, the U.K.'s chief negotiator, said Brussels' position was now that talks could not substantively progress in any area until the U.K. backs down and accepts "continuity with EU state aid and fisheries policy." Downing Street — determined in particular to have leeway on state subsidies to assist the coronavirus recovery — insist they will do no such thing. So talks are frozen. The EU's stance, Frost said "makes it unnecessarily difficult to make progress."

 

Barnier, spelling out the EU's position from the press podium at European Commission HQ, called a level-playing field on state aid and subsidies "a non-negotiable precondition to grant access to our market of 450 million citizens, given the U.K.’s geographic proximity and intensity of our economic exchanges.” He declared himself "disappointed and concerned and surprised" by the state of play.

 

The prediction appears to be that Downing Street will accept that no-deal will hurt them more than it hurts the EU — and cave in.

 

"I see that time is passing by, and that we are starting to take the risk of not being able to ratify the treaty by the end of the year," he said.

 

Both sides are now eyeing October's European Council meeting as a de facto deadline, to allow time to pin the deal down before the transition period ends at 11 p.m. U.K. time on December 31 — the moment Brexit rule changes will actually start to be felt by the businesses and citizens of the U.K. and the EU.

 

Brexit deadlines have come and gone in the past and given the tight timescales and other preoccupations, no-one can rule out that October deadline slipping. But, Barnier added: "This is a long complex task, any delay beyond the end of October, would entail a serious risk as to the successful outcome of this process.”

 

The next formal round of talks will take place in London from September 7. Between now and then, Barnier, Frost and their teams will remain in touch, U.K. officials said. In London, the idea of an accord being struck in September is not ruled out, but given how much distance remains between the two sides, the final run-in to the European Council summit — on October 15 and 16 — looks more likely. If that sounds familiar, it's because it is: The past two fall summits have been dominated by Brexit. Last year's was the historic one at which Boris Johnson clinched the Withdrawal Agreement that underpins the current talks.

 

For now — as so often before in this process — Brussels thinks it holds most of the cards. Brexit talks have never been a negotiation between equals and EU officials believe the U.K. "desperately" needs a deal (as one official put it last week); a fact that will force them to compromise sooner or later.

 

In this light, Barnier's chiding press conference comments and the refusal to engage substantively on other matters until the U.K. has backed down on state aid and fisheries can all be read simply as further means of applying pressure on London. The prediction appears to be that Downing Street will accept that no-deal will hurt them more than it hurts the EU — and cave in.

 

It's a strategy fraught with risk. Boris Johnson is not Theresa May; all along his government has said a deal would be great, but they would walk away if necessary. May said the same, but this time the occupants of Downing Street — such as the architect of Vote Leave Dominic Cummings, a man not averse to creative destruction — are more likely to follow through on that threat. Preparations are underway in the U.K. for disruption at the border that will ensue should there be no deal (and is likely, in fact, even if there is one.)

 

The risk for the EU is that they wait and wait for the U.K. to cave — until it's too late for both sides. That would have consequences. Deal or no deal, there could be disruption but — as trade experts in the U.K. have been pointing out this week — no deal would be worse and also carry the risk of poisoning the well of U.K.-EU relations in the future.

 

"A deal would avoid tariffs, unlock supplementary benefits, allow for EU and U.K. customs co-operation, ensure the Northern Ireland protocol is implemented sustainably and provide a platform on which to build a deeper relationship in the future," wrote Sam Lowe of the Centre for European Reform think tank, summarizing why a deal matters.

 

Reverse all those statements and you get a sense of what no-deal would look like. "The clock is ticking."

 

Giorgio Leali and Barbara Moens contributed reporting for this article.

 

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