British Prime Minister Boris Johnson’s Europe adviser David Frost and the EU’s chief Brexit negotiator Michel Barnier met face-to-face for the first time since the coronavirus crisis started on Monday to thrash out a post-Brexit trade deal. The pandemic forced UK and EU negotiators to hold virtual talks.

The meeting comes just a day after it was announced that Mr. Frost would replace Sir Mark Sedwill as national security adviser.

Johnson remains optimistic that a UK-EU free trade deal can be agreed by the end of July, but if the agreement has any hope of being ratified before the end of the year, then all negotiations must be completed by the end of October.

The UK ‘Will Have to Live with the Consequences of Brexit’

There are many reasons to believe that a deal may not happen. On Saturday, the Prime Minister warned German Chancellor Angela Merkel that he is prepared to walk away from EU trade talks after Merkel suggested that the UK will ‘have to live with the consequences of Brexit.’

But Merkel’s upcoming presidency of the EU could be an opportunity for both sides to make some progress towards a trade deal. With the bloc’s most powerful leader occupying its presidency, the Chancellor is likely to adopt a pragmatic stance during the final months of Britain’s transition period.

She told her EU counterparts recently that the autumn deadline to conclude an agreement is fast approaching, which shows that she is keen to ensure that the UK does not quit the bloc without a deal.

Brexit is a ‘Wake Up Call’ for the Rest of the EU

At the start of the year, she also warned that Brexit is a ‘wake up call’ for the rest of the EU as Merkel fears that Britain could become the EU’s main economic competitor on the continent. However, a free trade deal between the UK and the bloc is the lesser of two evils for her, as a no-deal Brexit could devastate the EU’s economy, particularly Germany’s. 800,000 German cars are exported to Britain every year, which equals 14 percent of all vehicles it makes domestically.

Earlier in June, Barnier insisted that he is not asking the UK to follow EU rules after it has completely left the bloc, and that his position was ‘misunderstood.’ Despite this, he did accuse the British Government of attempting to ‘cherry-pick’ staying in parts of the EU’s single market that it has benefited from the most. Either way, it would be wise for Frost’s team to take advantage of the ‘clever compromises’ Barnier has promised, but only if they benefit the UK.

Is a Compromise on Fishing Finally Emerging?

Fishing was once the biggest stumbling block that delayed both Britain and the EU from making progress in the Brexit negotiations, but it appears as if Brussels is doubling down on its fishing stance. Leading Brussels insiders told The Daily Express that Barnier will back down on the EU’s red line on fishing at the last moment. This would represent a substantial blow for French President Emmanuel Macron, who wants both parties to agree to a post-Brexit fishing arrangement that mirrors the Common Fisheries Policy (CFP).

RTE London Correspondent Seán Whelan also told the newspaper that now is not the time for Brussels to shift its position on fishing. This is because they are focused on debating European Commission President Ursula von der Leyen’s post-coronavirus stimulus before they concentrate on Brexit again. This means that the EU may compromise on fishing in September or October before the deadline for an agreement ends. But such an outcome may face hostility in the European Parliament, with French MEP François-Xavier Bellamy stressing that it is vital to France’s fishing industry for French fishermen to continue to access British waters.

Therefore, the tide seems to be turning in Britain’s favor for both sides to reach a post-Brexit trade pact, but such an outcome can only be achieved if the UK and the EU continue to show flexibility during the final months of the transition period.

L'articolo Why is a Brexit Deal Becoming More Likely? proviene da InsideOver.

The coronavirus has shifted European leaders’ attention away from the ongoing Brexit process, but the UK’s withdrawal from the EU continues thanks to negotiations currently taking place to draft a final trade deal.

However, both the UK and the EU have failed to make any progress during the Brexit negotiations so far. The key issue that both sides cannot agree on is fishing. The Guardian reports that the UK’s chief negotiator David Frost believes that his EU counterpart Michel Barnier recognizes the need to budge on this issue. Nonetheless, France, Spain and the Netherlands have imposed a tough line on this matter. They insist that these nations must continue to have access to British waters post-Brexit.

The Deadline to Conclude a Brexit Deal is Approaching

The deadline for a deal is fast approaching. The British Government has always insisted that if they cannot negotiate a successful trade deal with their EU neighbors, then they will quit the bloc with no deal.

Over the last few years, the EU has been ravaged by a whole host of issues: Brexit, Trump’s trade war, the automotive industry’s decline in the face of the bloc’s own CO2 emissions, and now the coronavirus. The latter has been particularly devastating for Europe’s economy as most of the bloc has gone into lockdown, with EU leaders struggling to agree upon a rescue package to mitigate the economic effects being caused by COVID-19. That is why the EU is the most vulnerable party in the midst of its trade talks with Britain and they cannot afford a no-deal Brexit.

According to the IMF, Ireland would suffer an output loss of four percent in the event of a no-deal Brexit. German car imports could be levied by a 10 percent tax under World Trade Organization (WTO) rules, and consultants Oliver Wyman have estimated that France would be the third most affected country by a hard Brexit costing French companies €4 billion a year.

Fishing is the Key to Ending this Deadlock

That is why Whitehall is drafting a legal text, or draft treaty, that will lay bare the stark differences between the two sides on key areas, including the maintenance of the British car industry and its supply chains.

To access EU markets, it would have to be shown that at least 50 percent of a British car’s components were British-manufactured.

Barnier’s team has rejected Britain’s suggestion to reduce the administrative burden of sanitary and physiosanitary checks at borders to protect plant, human and animal life. The legal text is expected to explain how an equivalence between British and EU rules can work.

A Deal is on the Horizon

Therefore, this draft treaty has the potential to avoid a hard Brexit, but it cannot work until both parties can compromise on the key issue of fishing. It would be unacceptable for the British to continue to participate in the EU’s Common Fisheries Policy, which sets quotas to conserve fish stocks. Quota hopping within the EU enables big commercial fisheries from nations like Spain and Denmark to grab British stock to meet their own targets.

Equally, the British fishing industry sells fish to other EU countries. In 2014-15 France, Spain and Ireland bought over 140,000 tons of British fish. That is why both the UK and the EU should clarify how British fish can be sold in the latter’s single market post-Brexit.

The Daily Mail suggests that European diplomats are beginning to get “realistic” about their position on fishing. This is probably what is happening behind closed doors.

Barnier refused to budge on the Withdrawal Agreement up until the end of last year. This proves that EU politicians are notorious for agreeing upon a deal at the last minute. But the situation is worse this time as the EU faces even more external threats than it did last year.

A deal is on the horizon and the draft treaty can make it happen, but it is time for the EU to shift its position on fishing.

L'articolo Will a Draft Treaty Prevent a No-Deal Brexit? proviene da InsideOver.

The coronavirus crisis has ground global economies to a halt. Businesses have been shut, transport links cancelled, and sports tournaments scrapped. But as it stands, one thing appears impervious to the pandemic’s disruption: post-Brexit trade talks.  

Post-Brexit Trade Talks Continue

The negotiations on Britain’s future with the EU have been eclipsed by Covid-19 in the news agenda, but behind closed doors, they are continuing. Given the pressure facing governments across the continent, that’s truly staggering. 

Indeed, the discussions have been blighted by the illness in a very personal way — lead EU negotiator, Michel Barnier, has tested positive for the disease, while his UK counterpart David Frost is said to currently be in self-isolation with virus symptoms. There had been hope that their teams might continue to meet, but, as huge swathes of Europe went into lock-down last week, face-to-face talks were cancelled. Teleconferencing technology was then suggested, but it proved equally unviable: dozens of officials crammed around webcams would have infringed on social distancing rules. 

Diplomatic Void

So now the opposing sides find themselves in a diplomatic void, determined to continue their negotiations but without any obvious means to do so. At the current stage of the talks, that poses little problem — both UK and EU representatives are busy analyzing the other’s legal documents, which amount to well over 400 pages each.

The next leg of the discussions will be harder to navigate. In a strident move last month, British prime minister Boris Johnson said he was willing to walk away from the negotiating table if insufficient progress had been made by July. 

The testiest areas of discussion — security, foreign policy, fishing, and more — must therefore be thrashed out in a little over twelve weeks. Achieving this will require intense and prolonged diplomatic bouts in which the individual officials’ personal relationships will be crucial. Whether genuine progress can be made without physical proximity in these high stakes talks is doubtful, experts say.

Coronavirus Has Led to Many Departments Being Short-Staffed

Negotiators must also be mindful of the situation back home. Facing off with the worst pandemic in a century, governments across Europe are under unprecedented pressure. In the UK, civil servants working for department vital to Brexit preparations — not least the Treasury — are reportedly being drafted into Covid-19 crisis teams. Acknowledging the enormity of the public health emergency, Johnson admitted last week that Brexit was “not a subject that is being regularly discussed” at the moment.        

With that in mind, it seems logical that London would request an extension to the talks. It’s certainly an option at their disposal: under the Withdrawal Agreement signed last year, negotiations can be prolonged for two years to allow for a breakthrough.  

All Eyes on Johnson

But Johnson has staked his legacy on delivering Brexit: any move that delays Britain’s departure from the EU institutions is feared and loathed at No. 10 Downing Street. 

In Europe, on the other hand, an extension is likely to be met with welcome. The UK’s withdrawal from the bloc has left a €65 billion hole in Brussels’ budget — a gap officials are struggling to fill. 

If talks were to be extended while the world wrestles with Covid-19, Britain would be obligated to continue monetary contributions. This would appall the UK government’s fiercely pro-Brexit leadership, but given the historic threat that all nations are facing pragmatism may have to trump ideology. 

Withdrawal Will Have Major Financial Consequences

The economics of Britain’s EU exit must also be considered. Experts are in near-unanimous agreement: withdrawal will have financial consequences. In more stable times, this might’ve amounted to an insignificant economic blip.

But in the current climate, no country can afford a downturn, however minor. Covid-19 has brought European business to its knees, with analysts warning of historically deep recessions in the coming months. Taking this into account, failing to postpone Brexit — and thus delay the economic stress it will likely cause — would appear foolish. 

But in any negotiation, advantage must be seized wherever it is found. Britain entered the crisis in a stronger financial position than the EU: national debt was 7% lower than the continent’s average, with unemployment rates almost half. If, accordingly, the UK can weather the economic storm of Covid-19 better than Europe, its negotiating power would be boosted.

Still, pandemics are unpredictable beasts and there’s no telling who may come out on top when it all blows over. This is perhaps one of the reasons why the British public appears pro-extension: a recent YouGov poll found 55% of Brits favored postponement, with 24% against.  

Whether Johnson — who himself has recently tested positive for the coronavirus — will listen, only time will tell. 

L'articolo Will Post-Brexit Trade Talks be Delayed Because of Coronavirus? proviene da InsideOver.