TheEconomistFebruary 8th 2020 471I
f brexit-weary britons hoped they
would be able to read about something
other than deadlocked talks once they had
left the eu, they were disappointed this
week. The transition period into which
Britain has gone lasts only until the end of
the year, by which time a trade deal needs
to be done. But when negotiations began
on February 3rd, the differences between
the two sides seemed as wide as ever.
It was Britain’s choice, insisted Michel
Barnier, the eu’s chief negotiator, to have a
more distant relationship than the euhad
wanted. But he said the bloc was ready to
offer a zero-tariff, zero-quota free-trade
deal that is more generous even than Cana-
da’s—with conditions.
The most contentious is a “level play-
ing-field” designed to prevent Britain from
undercutting its largest trading partner.
This, says the eu, will require British obser-
vance of eurules on state aid to companies
and on environmental, workplace and la-
bour standards. The eualso wants to main-
tain its access to British fishing waters. Andit insists on a governance system for set-
tling disputes that maintains a role for the
European Court of Justice (ecj).
Speaking in the old Royal Naval College,
Greenwich, a monument to Britain’s sea-
faring power, Boris Johnson dismissed
these demands in muscular terms. He
wants a free-trade deal like Canada’s. But
just as Canada is not bound by stringent
level-playing-field conditions, Britain
should not be. There was no need for any
deal to involve accepting eurules on com-
petition, subsidies, social protection or the
environment. Instead, he argued, Brussels
should trust his promises to keep to the
highest possible standards. The eu, already
suspicious that Britain may not fulfil its
obligations under the withdrawal treaty to
impose border controls between Northern
Ireland and Great Britain, is reluctant to
rely on trust alone.
As for fish, Mr Johnson declared that the
eumust accept British control of its own
waters. Nor could post-Brexit Britain allow
any ecjjurisdiction over its laws. And if aCanada-style deal cannot be negotiated by
year-end, he concluded, Britain would be
happy to trade like Australia. That is a eu-
phemism for having no-deal and instead
trading on World Trade Organisation terms
(in fact, Australia is trying to get its own
free-trade deal with the eu).
There is only limited time in which to
narrow such differences. That is because,
against the eu’s advice, Mr Johnson is re-
fusing even to consider extending the tran-
sition period beyond the end of the year.
The withdrawal treaty allows him to ask for
this by the end of June. But eulawyers say
that, if he misses this deadline, it will no
longer be possible to get more time.
Yet a free-trade deal that takes in not
only goods but also extras like services,
data rules, public procurement, aviation,
transport and security normally takes sev-
eral years to agree (and more to ratify).
When talks begin in March they will at first
see more posturing than negotiating. eu
diplomats do not expect real horse-trading
to begin until June. As Mujtaba Rahman of
the Eurasia Group consultancy says, the
time-frame with just months left will dic-
tate the terms of any deal, not the other way
round. And that means a bare-bones agree-
ment covering mostly trade in goods.
The big question is whether even this
will now be possible. Much gloomy com-
mentary suggests not; but there is a decent
chance that it might. After all, both sides
prefer a deal to no-deal. As Mr Johnson’sEU-UK negotiationsThere may be trouble ahead
BRUSSELS AND LONDON
Although compromise ought to be possible, the risk of Britain leaving the
European Union at year-end with no trade deal in place is still highBritain
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