The usual approach to an impasse—waiting it out—is a luxury we do not have. Do government ministers quite realise the position the UK is in?by David Henig / April 27, 2020 / Leave a comment
The only eureka moment typically expected during a second round of trade talks is negotiators’ realisation that addressing vast amounts of detail and bridging fundamental differences will take rather longer than the original optimism of politicians implied. Last week’s downbeat statements from the respective EU and UK chief Brexit negotiators, Michel Barnier and David Frost, thus came as little surprise to those with previous experience. Crucially however, the usual solution—for talks to just take longer, probably several more years—is currently being ruled out.
Assuming the UK government continues to maintain 31st December 2020 as the deadline for ending the transition period, and thus alignment with EU regulations and trade, then big decisions must be taken this year. These will determine the rules applying to around 50 per cent of our external trade as well as internal flows between Great Britain and Northern Ireland. They will cover access to UK fishing waters and EU financial services markets. They will shape our international relations for years to come. Yet ministers are still barely discussing these fundamental issues.
There are good reasons why trade talks take time. The World Trade Organisation provides a common baseline of tariffs and rules for access to other countries’ markets for goods and services. Granting access beyond that, such as removing all tariffs, counts as preferential treatment and is therefore subject to extra terms and conditions. Discussions typically cover issues such as what constitutes a domestically-produced good eligible for zero tariffs (criteria called rules of origin), making sure that trade is fair (level playing-field rules such as on environmental, labour or government subsidies), streamlined customs procedures, and related issues such as the terms for data transfer or mutual access to fishing waters.
The aim of such preferential trade talks is to ensure your country’s businesses have the access they need to the other market, while ensuring the access you grant is perceived to be fair by domestic interests. The other party will have its own version, and a deal balances these interests. Based on respective positions, the early rounds of talks focus on identifying areas of common ground and divergence, steadily building agreement on easier areas acceptable to all domestic interests, before leaving politicians to broker a final deal on the…