Source: Socialist Republic of Vietnam
EU chief negotiator Michel Barnier and his UK counterpart David Frost brought bilateral economic and trade cooperation issues back to the negotiating table from September 29. During their four-day talks, the two sides have been discussing the settlement of the existing bottlenecks, such as fair competition rules, fisheries, trade in goods and services, energy and judicial cooperation.
The two sides are still divided on the rules for fair competition between companies. The EU wants the UK to commit and ensure that their regulations in areas such as state aid, standards on society and employment and tax policy are not too different from those of the EU. The EU proposed these requirements because they feared that after Brexit, the UK will loosen the rules in the aforementioned areas, while continuing to exchange goods and services with the EU through a trade deal. This could lead to a “distortion in terms of the market and competition”. However, this view was rejected by London. The UK government stated that such concessions would damage the country’s sovereignty. Another thorny issue of difference between the two sides is the area of fishing. After the UK’s divorce from the EU, the bloc still wants to maintain its current fishery relations with the country, but London wants to hold annual negotiations with EU countries on fishing quotas, as in the newly signed UK-Norway agreement.
By stepping into such an important negotiating round, considered the last chance for a post-Brexit EU-UK trade deal, both sides have announced that they are working towards the same goal – reaching an agreement in late October to allow the parliamentary ratification process to take place in both the UK and the EU.
However, moves from the two sides, especially the UK, show that the negotiation is at risk of continuing to “a dead end”. The UK’s lower house of parliament on September 29 approved the Internal Market Bill aiming to control the domestic market after Brexit, regardless of a threat of legal action by the EU. Recently, bilateral relations have become tense after the UK rejected an EU proposal on the withdrawal of some provisions in the aforementioned bill. The EU set a deadline of September 30 for the UK government to remove some articles from the bill. It could be said that such a move from the UK has “added fuel to fire” in the context of UK-EU relations already being “hot” due to the deadlocked negotiations.
While the ninth round of Brexit negotiations takes place with fragile hopes of a “happy ending”, both the UK and EU business communities are losing optimism about a post-Brexit deal. According to European media, many UK-based banks have had to apply for permission to continue serving customers both within the country and in the EU. If the two sides fail to reach an agreement on time, trade ties between the EU and the UK will be shaped in accordance with the minimum standards of the World Trade Organisation (WTO) with high tariffs and a serious risk of disruption.
The EU and the UK are major economies and leading trading partners of one another, as well as of other countries around the world. Therefore, if the two sides cannot reach a common voice in this ninth round of negotiations, this will be sad news for global trade and economy. In the event of the UK leaving the EU without a reasonable trade agreement, global trade will become more chaotic in the context of all economies currently striving to resume activities after a period of “exhaustion” due to COVID-19.