Choppy waters ahead as Brexit negotiators fish for a deal

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Following last week’s European Council summit, the UK government has stated that it will not continue trade deal negotiations, having accused the EU of lacking flexibility in its approach and no longer being committed to working ‘intensively’ to achieve a deal. The UK negotiating team has also complained that the onus is being placed solely on the UK to make compromises.

The EU has responded by accusing the UK of talking up a political crisis where there is none and that negotiations will be intensified in the coming weeks. As if to confirm this, Michel Barnier, the EU’s chief negotiator, intends to travel to London this week for further discussions aimed at achieving a breakthrough.

So, is this really the end of talks or is there something fishy going on here?

Well fish, and the extent to which the EU should have access to UK fishing waters, is certainly one of the sticking points that is currently preventing an agreement. The other key issues still to be settled are the nature of the dispute resolution mechanism designed to ensure both parties honour any deal, and the amount of autonomy the UK should have to deviate from EU standards and state aid rules after the transition period ends. As yet, there hasn’t been sufficient progress on these points for a deal to be reached.

In the fallout from the summit deadlock, Boris Johnson announced that the UK government would now devote its time to no-deal preparations. In doing so, the UK is now setting its sights on a fair trade arrangement similar to that which is held between the EU and Australia. Notably, this is not a formal deal like the one that has been sought and frequently promised. But is this just a red herring and a tactic designed to gain leverage at a pivotal moment in the process?

Despite the fractious rhetoric traded between them, neither the EU or the UK seems willing to blink at this point and walk away from negotiations completely. As far as the business community is concerned, this will come as a relief because a deal is regarded as the only way to avoid commercial disruption. Without an agreement, the UK will be operating under WTO terms or something very similar. However, the end of the transition period looms large and, even if common ground can be identified, time is not on the side of those hoping for a successful conclusion.

Both parties continue to cast their nets for a prized deal but questions remain over how determined they will be in their endeavours as the transition deadline approaches.