Well, would you like to take a look at that: the Brexit talks are still ongoing.
Last week, the United Kingdom and the European Union set a Sunday deadline to negotiate the terms of their future relationship. Sunday didn’t bring a deal. But it offered – perhaps – some small glimpses that the UK and EU might just be able to reach a pact by the real December 31 deadline.
So the two sides will continue to work on it. “Despite the exhaustion after nearly a year of negotiations, despite the fact that deadlines have been missed time and again, we think it is responsible at this point to go one step further,” said British Prime Minister Boris Johnson and Chairman of the European Commission Ursula said von der Leyen in a joint statement released Sunday.
What this “extra mile” entails is only for the negotiators to know, and whether it will actually lead to a breakthrough is frustratingly unclear. But Michel Barnier, the EU’s chief Brexit negotiator, said on Monday that a “good, balanced deal” is still possible.
“It is our responsibility to give the lectures every chance to succeed,” Barnier tweeted Monday.
Johnson said on Sunday that the UK and the EU were still very far apart on major issues, but “but where there is life, there is hope, we will keep talking to see what we can do. The UK will certainly not walk away from the talks. “
The United Kingdom and the European Union have been trying to negotiate an agreement that will determine their future partnership for months after the UK formally left the bloc in January. If they cannot reach an agreement by December 31, the UK and the EU will begin trading under the terms of the World Trade Organization, which would lead to new tariffs on goods traded across the continent and could lead to other disruptions in business as air travel and transportation.
Both parties want to avoid this outcome. And maybe, just maybe, the decision to keep talking is a sign that they have something worth talking about.
Has an important bottleneck become a bit less sticky?
Three major bottlenecks have held up the Brexit negotiations: fisheries, governance and state aid and regulation, or the so-called level playing field.
The level playing field is a crucial issue for the European Union, which wants to protect the integrity of its internal market. The EU has insisted that if they want the UK to negotiate a very favorable trade deal – zero tariffs, zero quotas – that the UK should not be able to turn the EU around and undermine the EU by subsidizing industries or companies, or by environmental or labor standards.
But the UK sees this as the EU trying to get the country to follow the rules of the club that just left it. Brexit was supposed to give the UK the power to reclaim its sovereignty and restore its own trading regime, which is why the UK has rejected the idea that it should continue to adhere to EU rules and standards.
The symbolism of the issue has overshadowed some of the practical realities of the debate. The UK itself has admitted that it is unlikely to deviate greatly from EU regulations, but the EU does not fully trust the UK to keep its word. That mistrust has hindered any kind of compromise.
But that may change. According to some reports, both sides have somewhat toned down their demands and are trying to find a solution that gives the UK the ability to do its own thing, but also appeals to the EU if the UK goes too far.
They are trying to do this by establishing a mechanism through which the EU or the UK can raise concerns about any differences in labor, environmental or other regulations, according to the Financial Times. This would focus less on the actual rules, but on the outcome – in fact, if a change in regulation actually penalizes one side when it comes to trade or investment.
The UK now appears ready to accept the need for some sort of mechanism to kick in if there are “systemic differences disrupting trade and investment,” Barnier said Monday. And from the UK’s perspective, it wouldn’t automatically be bound by EU rules, although it knows that major changes are not without risk.
Marlene Wind, director of the Center for European Politics at the University of Copenhagen, warned that we are not sure whether the UK and the EU have actually moved closer to an agreement. But she noted that this solution could give Johnson a bit more flexibility to sell a Brexit deal at home, saying it’s up to the UK to decide whether to deviate, even if there are consequences.
“If that’s something that can be more easily sold to the public, they might be able to meet there,” said Wind. “But of course it will not be frictionless trading in the same sense.”
The little bit of giving here can go a long way in the end – although now the EU and the UK have to agree on what constitutes a violation of a level playing field and what penalties or remedies there are to fix the imbalance.
And the EU and UK are apparently still deadlocked on other issues, notably fishing rights. The fisheries issue is a relatively minor economic issue for both the UK and the EU, but has taken on an outsized role in the debate.
Fishing makes up a very small percentage of the UK economy – as the New York Times reported, Harrods department store contributes more to the UK economy each year – but it is a politically important industry and symbolically linked to the Brexit ideal of regaining sovereignty , including over UK waters.
But fishing is also a politically important and symbolic industry in some EU Member States that want to maintain access to UK waters. French President Emmanuel Macron has insisted that he will not sacrifice the French fishing industry in any deal.
All this means that this is a big step extra for an agreement. As experts told me last week, the EU or UK had to climb down a bit, which would give the other permission to compromise. That may be what is happening now. But it may not be enough to get a deal before the December 31 deadline.
And the longer the EU and UK keep talking, the less time they will have to implement a deal. Wind told me there are likely to be trade disruptions as companies have to quickly adapt to new rules and trade barriers. But the disruptions from a no-deal Brexit would be even more painful. Therefore, neither side is willing to walk away just yet.