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Thu, 3 December 2020

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EXPLAINED: Why is the UK already talking about walking away from trade talks with the EU?

EXPLAINED: Why is the UK already talking about walking away from trade talks with the EU?
5 min read

The Goverment has finally published its opening gambit in talks on the UK's future relationship with the EU. But what's it actually pitching? PolHome's Matt Honeycombe-Foster takes a look


If Number 10's aim had been to ruffle a few feathers ahead of talks on Britain's future relationship with Europe, it can probably rest easy.

While the 30-page document spelling out how it plans to approach negotiations, published on Thursday, starts off with a few warm words about "friendly cooperation between sovereign equals", it's not long before we're into fiery talk about storming out of the negotiations and going it alone if necessary.

Right at the top, the document makes clear: "Whatever happens, the Government will not negotiate any arrangement in which the UK does not have control of its own lawsand political life. That means that we will not agree to any obligations for our laws to be aligned with the EU's, or for the EU's institutions, including the Court of Justice, to have any jurisdiction in the UK."

That'll certainly be read with interest in Brussels, where EU negotiators believed the broad sweep of the talks would be shaped by the Political Declaration, agreed by both sides in November last year.

That document talked about an "ambitious, broad, deep and flexible partnership" - but, crucially, it also agreed that both sides would work towards an agreement that is "underpinned  by provisions ensuring a level playing field for open and fair competition".

This, then, is the essential sticking point as the talks kick off: the EU believes Britain has already signed up to continued closeness with the bloc on a range of rules and standards in exchange for access to its markets - but the UK is making clear that, if push comes to shove, it will prize the ability to set its own rules over ease of trade between the two entities.

Number 10 thinks the Prime Minister has been strengthened in effectively shrugging off bits of the Political Declaration by his decisive December election win - but the European Union is unlikely to look favourably on any attempt to move the goalposts.

'RAPIDLY FINALISED'

Once again, the negotiating mandate published on Thursday says a Comprehensive Free Trade Agreement (CFTA) should be at the "core" of future ties between the two entities, with a host of other agreements on fisheries, justice cooperation, transport and energy drawn up alongside it.

However, it again makes clear that Britain does not want to be treated any differently to other countries with which the bloc has signed pacts, saying an agreement should be "on the lines of the FTAs already agreed by the EU in recent years with Canada and with other friendly countries".

The Government has in mind Canada's Comprehensive Economic and Trade Agreement (CETA) with the EU, which came into force in 2017.

This pact, which took eight years to negotiate, scraps tariffs on most types of goods, and has already been talked up by the EU's chief negotiator Michel Barnier as a viable model for the UK given its decision to quit the EU's customs union and single market and end the free movement of people.

But CETA is not a tariff-free panacea, either. It sees some cooperation on standards, limits some food imports into the EU, and maintains a host of barriers in the service sector.

Number 10 on Thursday made clear that if the EU pushes too hard on the alignment front while trying to agree that trade deal, it will be willing to essentially walk away without an agreement.

As the document says: "The Government will work hard to agree arrangements on these lines. However, if it is not possible to negotiate a satisfactory outcome, then the trading relationship with the EU will rest on the 2019 Withdrawal Agreement and will look similar to Australia's."

Australia is currently negotiating a free trade deal with the EU, and is subject to high tariffs in some areas while it trades on World Trade Organisation terms. It would, for businesses, likely represent a much bumpier ride - and, while Downing Street is at pains to avoid the term 'no deal', this type of relationship would bring Britain fairly close to the scenario averted by the 11th-hour divorce deal agreed by the two sides last year.

For the first time, Thursday's document sets out the "speedy and determined" timetable the UK government wants to work towards once talks get underway next week. The clock is already ticking down to the end of 2020, when the current transition period - where the UK stays closely aligned to the EU with the same trading arrangements as it enjoyed during membership - expires.

Boris Johnson now wants to see progress before a "high-level meeting" slated for June - and the mandate says that, by this point, Britain expects "the broad outline of an agreement would be clear and be capable of being rapidly finalised by September".

That leaves just over three months for the two sides to make progress. And, if not, the Government says it will "need to decide whether the UK’s attention should move away from negotiations and focus solely on continuing domestic preparations to exit the transition period in an orderly fashion".

With Whitehall officials already admitting that this would require customs posts to be erected at the UK's border by the end of the year, it's certainly a high-stakes gamble. And we'll soon find out whether Number 10 means business.

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