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Is this the final act of the negotiations?
Time has run out and both parties recognize that it is critical to trade and security negotiations with only three weeks left for the UK to leave the single market and the EU customs union. Maybe only 48 hours left for negotiations. The UK negotiating team led by David Frost is locked in the basement of the Department for Business, Innovation and Skills in Whitehall with Michel Barnier and the EU team. Arriving at the department on Friday, Barnier told reporters it was a “very important day.”
Will there be a deal?
Those in the negotiating room don’t know. The UK team claimed on Thursday night that the negotiation had taken a step backwards due to new demands from the EU resulting from French lobbying.
The EU was said to have started pushing for additional and stricter guarantees on the role of a British subsidy or state aid regulator, a claim dismissed by Brussels. But sources admit that the issue remains difficult. The EU wants the national regulator to have the power to approve or block subsidies based on shared EU-UK principles written in the treaty. Failure to comply with the principles by the regulator would give the EU a chance to unilaterally strike back through tariffs on British goods or even suspension of part of the trade deal.
France has said it will not tolerate a deal that provides a potential competitive advantage for UK companies in the European market. Clément Beaune, the French minister for EU affairs, said Paris would be willing to veto the deal if necessary. The agreement will require unanimity among the 27 member states.
And the French are not the only nervous ones. Denmark, the Netherlands, Italy and Belgium are all concerned that Barnier will concede too much for the deal to slip out of line. Meanwhile, Boris Johnson repeats his mantra of being willing to leave the transition period in “Australian terms,” the Kafkaesque phrase he uses to describe a no-deal exit. Australia does not have a trade agreement with the EU.
Is this just a late night theater?
Certainly, one would expect a sudden outburst of stance from both sides when it comes to decisive hours. A tough stance can gain a little more ground in the negotiating room. A crisis could generate an expected “political moment”: an arbitration involving the president of the European Commission, Ursula von der Leyen, and Johnson. But there are real principles at play. Germany holds the renewable presidency of the EU and asked Barnier to address ambassadors in Brussels on Wednesday, as some European capitals were getting nervous about a lack of information on the most contentious parts of the agreement: access to water. UK fisheries and maintaining a level playing field through equivalent subsidy control regimes and rules over time. But it did not calm the nerves. Barnier was warned that he was approaching, if not stepping on, the red lines of his negotiating mandate.
What happens now?
More talks over the weekend. The crunch is expected to come Sunday night or Monday morning. The internal market bill returns to the House of Commons on Monday. The government has said it will return the contentious clauses, removed by the Lords, violating international law by invalidating the clauses on the Northern Ireland protocol in the withdrawal agreement.
The finance bill is expected to be presented on Wednesday, again violating international law by invalidating other clauses of the treaty. If the government follows through with these laws, it will show that all hopes of reaching an agreement are gone. The EU has made clear that it will not accept a deal if Downing Street goes ahead with the unilateral rewrite of the withdrawal agreement.
