BRUSSELS — Another round of trade discussions between the European Union and the U.K. ended Friday — and once again there were no signs of progress ahead of a looming deadline on whether a transition arrangement can be extended.
Following four days of video discussions because of the coronavirus pandemic, the two sides remained at loggerheads on a number of issues, including on regulations for businesses. Their positions on fisheries also remain far apart, with the U.K. adamantly opposed to EU demands for long-term access to British waters.
“The truth is there was no significant progress this week,” the EU chief negotiator Michel Barnier said during a press conference.
His counterpart on the U.K. side also failed to signal any meaningful breakthrough.
“Progress remains limited, but our talks have been positive in tone,” David Front, the U.K.’s chief negotiator, said.
The U.K. left the political institutions of the EU on Jan. 31 but remains inside the EU’s tariff-free economic zone until the end of the year. That so-called transition period can be extended by two years but a request to do so has to be made by July 1. Prime Minister Boris Johnson has repeatedly said he won’t ask for an extension.
The most likely prospect for an imminent breakthrough in talks now rests on a high-level political meeting between Johnson and the EU’s top official, European Commission President Ursula Von der Leyen, scheduled for sometime later this month.
Though that looks set to be another video conference, the hope, particularly on the U.K. side, is that more face-to-face discussions can move things forward in the months ahead.
“We are close to reaching the limits of what we can achieve through the format of remote formal rounds,” Frost said.
If the two sides don’t reach an agreement by the end of the year, tariffs and quotas will be slapped on trade between the two sides. That would represent another economic shock — on top of the pandemic — that most economists think would affect Britain more. Cars exported from one side to the other, for example, would face a 10% levy.
Barnier lambasted the U.K. for trying to distance itself from commitments made in the political declaration that accompanied the Brexit agreement, which dealt with issues related to its departure from the bloc such as citizens’ rights and the value of historic liabilities.
In the political declaration, which is not a legal document in the way the Brexit withdrawal deal is, the two sides laid out their ambitions for the trade talks and the future relationship.
“In all areas, the U.K. continues to backtrack on the commitments it has taken in the political declaration,” he said. “We will not accept this backtracking.”
For its part, the U.K. says the British government and the EU have differing interpretations of the political declaration, notably on issues related to the “level playing field” for business regulations, and denies it is backing away from its commitments.
Fishing rights appear to be the most immediate difficulty as both sides had hoped to have an agreement wrapped up by the end of June.
Barnier criticized what he considered to be the U.K.’s intransigence on the issue.
“They continue to condition access to waters to an annual negotiation, which is not possible for us, not even technically possible,” he said.
The British government previously threatened to walk away from the talks if no progress had been made by the end of June, to give businesses time to get ready for a new “no deal’ outcome that would likely mean tariffs and other regulatory burdens on trade as well as new restrictions on the movement of labor and capital.
It seems that is no longer the case, though whether the U.K. will hang about until October, which appears to be the EU’s deadline for discussions so national parliaments give their approvals, is open to question.
“We need to conclude this negotiation in good time to enable people and businesses to have certainty about the trading terms that will follow the end of the transition period at the end of this year, and, if necessary, to allow ratification of any agreements reached,” Frost said.