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The latest round of talks resume in Brussels this week, with both sides remaining confident a free trade agreement (FTA) can be struck over the coming weeks. Both sides have repeatedly lashed out at each other over the lack of progress made, warning time is running out to get a deal over the line in time for it to be ratified by the European Parliament by the end of the Brexit transition period on December 31 UK and EU negotiators are refusing to give ground on several red lines – including fishing access, the level playing field, state aid and the role of the European Court of Justice (ECJ).
Earlier today, the EU warned while it will continue to negotiate in a constructive manner with the UK, a trade deal needs to be agreed by October at the very latest.
An EU official closely involved in talks ahead of this week’s latest round told Politico: “The UK desperately needs this deal. If the clock is ticking, reality will start to sink in in London.
“The UK might not always have behaved rationally in its negotiations with Brussels, but surely the pandemic and the lack of trade alternatives must lead to some reason in London.”
Britain has experienced a series of setbacks in trade negotiations with other countries, which it had hoped would increase the pressure on the EU to compromise on some of its crucial red lines.
The UK and Japan could not announce a trade deal as planned at the beginning of this month, while New Zealand gas indicated British negotiators are unprepared for trade talks.
Negotiations with the US continue will continue during the country’s presidential election season, but it is unlikely Washington will push through a deal before the vote in November.
David Henig, the UK director of the European Centre For International Political Economy, said: “The UK Government’s ambitions for new trade agreements this year always looked unachievable, but this doesn’t mean they will change their approach to EU talks and prioritise a deal.
“The EU doesn’t have a great record in understanding motivations in London. The politics of Brexit having always been more important than the economics.”
It is unlikely this week’s latest negotiating round between the UK and EU will force a major breakthrough, but there has been some progress, predominantly on the issue of governance.
Brussels wants an overarching agreement, where a dispute in one area could lead to repercussions in another, but the UK had previously wanted several mini-deals with their own governance arrangements.
Mr Frost said at the end of last month the UK has “heard the EU’s concerns about a complex Switzerland-style set of agreements and we are ready to consider simpler structures”.
But EU negotiators have also shown signs of compromise, having acknowledged the political sensitivity of the role of the ECJ in the UK, and is looking for legal solutions that will satisfy both sides.
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There is a notable stalemate on fisheries, but a deal on this will probably only be struck towards the end of negotiations.
The EU demanding little change here and wants its vessels to be able to access British waters, but the UK is adamant it will decide who can fish — and how much they can catch — in its waters.
On the issue of the level playing field, Mr Barnier has warned: “The UK wants to regain its regulatory autonomy. OK, we respect that.
“But can the UK use this new regulatory autonomy to distort competition with us? We have to answer this question as we commit to a new economic partnership.”
Reports the EU has been willing to compromise on state aid have been rubbished in Brussels, with officials warning Britain should not necessarily accept future EU state aid rules, they should be more clear on its future subsidy regime.
UK negotiators believe an independent dispute settlement should be enough to secure a deal, which would mean future British state aid plans could have consequences for access to the EU’s single market.
But an EU official warned: “Such an arrangement would cause friction from day one. We don’t have a problem with the UK having its own subsidy regime.
“We just need more clarity on it to ensure a level playing field. The question is whether the U.K. has already decided on its own state aid plans.”
Mr Henig added: “It’s very difficult to reach agreements on major trade deals if you don’t know your policy with regard to state aid, food regulations, devolved powers and much besides.
“There seems to have been a categorical error among ministers in particular, that these deals were about how much we trade with each other, whereas they are actually all about the rules which govern trade.”
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