16
October 2020

Written by:

Samir Dwesar

Senior Account Manager

Is this the storm before the calm: deal or no deal?

Brexit impasse continues as the Prime Minister today confirmed that the UK must be prepared for no deal once the transition period ends on 31st December. This follows the UK Chief Negotiator David Frost’s tweets last night where he expressed disappointment in the EU Council’s conclusions, adding that he was surprised that the ‘EU is no longer committed to working intensively to reach a future partnership’.

In his remarks, the Prime Minister reaffirmed the UK’s desire for a Canada-style relationship but said the EU’s position following the summit appears to be in stark contrast to this ambition. He accused the EU of refusing to negotiate seriously over the last few months and in light of all this, has concluded that businesses, hauliers and travellers should prepare for no deal. 

The UK set a deadline of 15th October to decide whether to continue talks or walk away. The Prime Minister has said he is prepared to continue talking to the EU if they offer some ‘fundamental change of approach’ and declined to say whether the UK was willing to walk away now. But deadlines are fast approaching. Any draft agreement text must be ready by early November in order for the European Parliament to ratify any agreement by the end of the year. The EU’s Chief Negotiator, Michel Barnier has echoed this saying that fresh intensive talks over the next two weeks should aim to reach a deal by the end of October.

Some hope for a deal remains. Not only has Boris Johnson stopped short of ruling out further talks, but the EU remains open to intensifying the negotiations. EU Commission Vice President, Maroš Šefčovič believes that whilst difficult, a deal remains possible and the Irish Taoiseach, Micheál Martin has suggested that a deal is still possible within the timeframe. The French Government has also expressed support for negotiations to continue into November if the deadlock continues and German Chancellor, Angela Merkel has warned that the EU must be more realistic in accepting the UK’s position.

But significant gaps remain on fisheries and state aid and the question is whether these can be narrowed in the coming days and weeks. Several Member States, including Belgium, France and Denmark have not given Michel Barnier and his negotiating team any flexibility on fisheries and the UK is adamant that it should have full sovereignty over its state aid regime. 

Alongside this, the Internal Market Bill continues to cause controversy with the EU having commenced legal action on the grounds of it violating the Withdrawal Agreement. This all heightens the prospects of a no deal come January 1st and in their written conclusions following European Council this week, the EU gave little away to suggest that they would be willing to compromise. Instead, Charles Michel, the European Council’s President said it was for the UK Government to make concessions, something Johnson may need to do to secure a much-needed political win.

Cavendish Advocacy will be holding a What Next: Future of Europe? towards the end of 2020. Please watch our website for further details.