How the UK and EU have inched closer to an agreement on three key issues

Negotiators must overcome three major sticking points to secure a Brexit trade deal during intensified trade negotiations.

Source - Daily Telegraph 24/10/20

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The UK and EU are locked in intensified negotiations and hope to finalise a Brexit free trade deal in two to three weeks. 

Both sides admit there remain significant differences over the major obstacles of fishing, level  playing field guarantees and the deal’s enforcement. So where did the two sides start on the three issues and where are they going?

Fishing

Where they started

The UK wanted a Norway-style deal with annual negotiations on fishing opportunities with significantly more quota for British fishermen. Opportunities should be calculated on the basis of zonal attachment, a method reflecting where fish are. here are now more fish in UK waters because of climate change. The agreement should be separate from the trade deal. 

The EU wanted reciprocal access to UK waters under existing conditions with fishing opportunities calculated on the Common Fisheries Policy’s historic catch patterns, which disadvantages British fishermen. A fishing agreement is a precondition of trade deal and must be part of the same treaty. 

Where they are going

Fishing is politically difficult but technically feasible. The EU accepts its will have less access but wants a long-term agreement rather than annual talks. A possible solution is to agree multi-annual mini-deals for certain types of fish but yearly negotiations for others. Negotiators will tackle more than 100 shared stocks during the intensified talks. Brussels could accept zonal attachment but wants other factors taken into account. The UK has offered a three year transition period with UK quota increasing over time. 

Level playing field guarantees

Where they started

The EU wanted enforceable commitments to uphold its standards on tax, subsidy law, labour rights and the environment from the UK. On subsidy law, the EU offered “dynamic alignment”, meaning EU state aid law would continue to apply in the UK as it does now. 

The UK said it would only sign up to the unenforceable commitments that are usual inBrussels’ trade deals with countries such as Canada. Non-regression clauses would ensure the UK did not undercut existing standards but these would not change over time.

Where they are going

A combination of some non-regression clauses and an unprecedented system to manage future divergence. The EU accepts the European Court of Justice can have no role and the UK will have a separate subsidy regime.  A joint panel could be set up to allow a side to limit access to its market if new rules or actions constitute dumping or unfair competition. This future-proofs the trade deal but does not tie future UK governments’ hands.  

Governance

Where they started

The EU wanted the deals on fishing, trade, foreign policy and security cooperation covered by a single agreement and enforcement system. Future agreements could be plugged into this umbrella agreement and punitive measure could be taken across sectors if necessary. 

Britain wanted a series of separate agreements with their own dispute resolution mechanisms and no cross-cutting. It said foreign policy cooperation didn’t need a new agreement. 

Where they are going

The UK's Internal Market Bill, which breaks international law, has stiffened the EU’s resolve to secure a tough enforcement system.   Negotiations are expected to be difficult and detailed. The UK has warmed to the umbrella treaty but still wants fishing to be separate.  Britain has signalled a robust governance system is also in its interest, suggesting a deal could be closer.