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The EU and UK have extended make-or-break Brexit talks — again

“We think it is responsible at this point to go the extra mile,” EU and UK leaders said.
Olivier Hoslet/AFP via Getty Images

Olivier Hoslet/AFP via Getty Images

Well, would you look at that: Brexit talks are still on.

Last week, the United Kingdom and the European Union set a Sunday deadline to negotiate the terms of their future relationship. Sunday didn’t bring a deal. But it offered — maybe — some small glimmers that the UK and the EU might just be able to reach a pact by the true deadline of December 31.

So the two sides are going to keep working at it. “Despite the exhaustion after almost a year of negotiations, despite the fact that deadlines have been missed over and over, we think it is responsible at this point to go the extra mile,” British Prime Minister Boris Johnson and President of the European Commission Ursula von der Leyen said in a joint statement, released Sunday.

What this “extra mile” entails is only for the negotiators to know, and whether it will actually lead to some sort of breakthrough is frustratingly unclear. But Michel Barnier, the EU’s chief Brexit negotiator, said Monday that a “good, balanced agreement” is still possible.

“It is our responsibility to give the talks every chance of success,” Barnier tweeted on Monday.

Johnson, on Sunday, said that the UK and the EU were still very far apart on big issues, but “but where there is life, there’s hope, we’re going to keep talking to see what we can do. The UK certainly won’t be walking away from the talks.”

The United Kingdom and the European Union have been trying for months to negotiate an agreement that will define their future partnership after the UK formally left the bloc in January. If they can’t reach a deal by December 31, then the UK and EU will begin trading under World Trade Organization terms, which would mean new tariffs on goods traded across the continent and could mean other disruptions in things like air travel and transport.

Both sides want to avoid this outcome. And maybe, just maybe, the decision to keep talking is a sign that they have something worth talking about.

Did a major sticking point get a little less stickier?

Three big sticking points have held up the Brexit negotiations: fisheries, governance, and state aid and regulations, or the so-called level playing field.

The level playing field is a crucial issue for the European Union, which wants to protect the integrity of its single market. The EU has insisted that if they’re going to grant the UK a very favorable trade deal — zero tariffs, zero quotas — that the UK shouldn’t be able to turn around and undercut the EU by subsidizing industries or businesses, or by lowering environmental or labor standards.

But the UK sees this as the EU trying to get it to follow the rules of the club it just left. Brexit was supposed to give the UK the power to reclaim its sovereignty and reestablish its own trading regime, and so the UK has rejected the notion that it should continue to abide by EU regulations and standards.

The symbolism of the issue has overshadowed some of the practical realities of the debate. The UK has itself admitted it’s unlikely to diverge wildly from EU regulations, but the EU doesn’t fully trust the UK to keep its word. That distrust has held up any sort of compromise.

But that might be changing. According to some reports, both sides have softened their demands slightly and are trying to find a solution that will give the UK the ability to do its own thing, but also give the EU recourse if the UK takes it too far.

They’re trying to do this by establishing a mechanism that would allow either the EU or UK to raise concerns about any divergence in labor, environmental, or other regulations, according to the Financial Times. This would focus less on the actual rules, but on the outcome — basically, if a regulation change actually disadvantaged one side when it came to trade or investment.

The UK now seems to be willing to accept the need for some sort of mechanism to kick in if there are “systemic divergences which distort trade and investment,” Barnier said Monday. And from the UK perspective, it wouldn’t be bound by EU rules automatically, though it knows any dramatic changes aren’t risk-free.

Marlene Wind, director of the Centre for European Politics at the University of Copenhagen, cautioned that we don’t know for sure whether the UK and EU have actually moved closer to an agreement. But she noted that this solution might give Johnson a little more flexibility to sell a Brexit deal at home, by saying it’s up to the UK to decide whether to diverge, even if there are consequences for it.

“If that is something that can be sold easier to the public, maybe that’s where they can meet,” Wind said. “But of course, it will not be frictionless trade in the same sense.”

The little give here might end up going a long way — although now the EU and the UK will need to agree on what constitutes a level playing field violation, and what penalties or solutions exist to remedy the imbalance.

And the EU and the UK are apparently still at an impasse on other issues, most notably fishing rights. The fisheries issue is a relatively minor economic question for both the UK and the EU, but it’s taken on an outsize role in the debate.

Fishing accounts for a very small percentage of the UK economy — as the New York Times reported, Harrods department store contributes more annually to the UK economy — but it’s a politically important industry, and it’s symbolically tied to the Brexit ideal of reclaiming sovereignty, including over UK waters.

But fishing is also a politically important and symbolic industry in some EU member states that want to retain access to UK watersFrench President Emmanuel Macron has insisted that he will not sacrifice France’s fishing industry in any deal.

All of which is to say, this is one heck of an extra mile to go for an agreement. As experts told me last week, either the EU or the UK needed to climb down a bit, which would give the other permission to compromise. That might be what’s happening now. But it might not be enough to get a deal by the December 31 deadline.

And the longer the EU and the UK keep talking, the less time they will have to implement any sort of a deal. Wind told me there will likely be disruptions in trade, as businesses have to adjust quickly to new rules and trade barriers. But the disruptions from a no-deal Brexit would be even more painful. That’s why neither side is willing to walk away just yet.

 

 

Source: Vox

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