U.K. Must ‘Internalize’ What’s Needed for Deal, Barnier Tells EU

Michel Barnier told European Union ambassadors this week that the U.K. has shown no signs of movement on the big issues holding up Brexit talks and Boris Johnson will have to make a political decision to change his stance if he’s to reach an agreement.

The EU’s chief negotiator has made that point directly to his counterpart David Frost, according to a diplomatic note of a meeting that took place on Wednesday. Barnier told the diplomats that his feeling is that London wants a deal but has yet to “internalize” the necessary compromises and concessions that are needed to reach one, the document, seen by Bloomberg, says.

As talks go to the wire after eight months of negotiations, the two sides are still trading accusations, blaming each other for the lack of progress and refusing to back down. If they are to secure a deal it will require one or the other -- or probably both -- to make concessions they’re not comfortable with.

Barnier suggested that the U.K. may be trying to keep the most difficult issues open until the very last moment in the hope of reaching a “grand bargain.” Barnier told the ambassadors that stalling tactics won’t work and warned that member states will need to take a decision on how to proceed unless there is significant progress next week.

British officials say that they think the EU is using exactly the same ploy and one argued on Friday that Barnier’s team hasn’t come to terms with the compromises required on its side either.

Limited Progress

Frost and Johnson have been in contact over recent days before talks resume in London on Sunday in what both sides say will likely be the decisive phase of negotiations. Both sides have said that an agreement must be done by mid-November to allow time for their respective parliaments to scrutinize and approve the deal.

Over the past two weeks, negotiators have made headway on numerous matters and have been working on the text of an agreement, Barnier told the ambassadors. The final agreement is set to run to about 600 pages, one European diplomat said.

But on the three most difficult issues -- ensuring a level playing field for businesses, a system for addressing any disputes once the deal is in force, and how to divide up fishing rights -- the U.K. and the EU remain far apart, Barnier said.

That’s an assessment shared by the British, though one person familiar with the thinking in London said this week that the Europeans are under more time pressure because ratification is more complex for the EU.

No Toolbox

Barnier told the 27 ambassadors that Britain was resisting EU proposals for a “toolbox” covering common state aid principles, a binding dispute resolution mechanism, as well as provisions and criteria for either side to quickly take unilateral action if there’s a breach of the agreement.

The EU’s chief negotiator said the U.K. was also resisting so called “non-regression clauses” -- which make agreed standards enforceable -- and doesn’t want to define stringent commitments on social, environmental, climate, labor and fiscal issues, arguing instead for more generic alignment objectives.

Barnier later noted that the U.K. is publicly saying that it doesn’t want an ambitious agreement on level-playing field provisions, while privately asking for a relationship as close as possible to the status quo in sectors such as energy.

Crucially, Barnier tempered enthusiasm over reports an agreement on fishing arrangements was starting to emerge. He said that the EU could not accept the U.K. proposal for redistributing fishing quotas because it would lead to significant damage to the industry on the continent.

Nevertheless, Barnier spoke of a possible “common sense” compromise. He noted that while the U.K. has leverage granting access to British waters, the EU has leverage when it comes to U.K. companies’ access to European markets in sectors such as energy. He said that would still be difficult for Johnson because he has invested so much political capital in fishing.

During the meeting, the French envoy stressed the importance of continued access to waters 6-12 nautical miles (11-22 kilometers) from Britain’s coast, an arrangement that predates the U.K.’s membership of the EU.

Signs of Progress

Elsewhere, Barnier said that there had been significant progress on mobility, social security coordination, law enforcement, and trade in goods and services. Some details remain to be solved, including on rules of origin and procurement, which the U.K. doesn’t want to include in the agreement, as well as professional qualifications and geographical indications.

He informed the diplomats that the U.K. had provided guarantees on the European Court of Human Rights and the protection of personal data, the EU’s pre-conditions for close cooperation on security. Still, some issues remain to be solved on specific instruments given differences on Passenger Name Records and rules relevant to regulating trusts and combating money laundering. Barnier said the agreement on policing and judicial cooperation would be unprecedented for a third country.

During a roundtable discussion that followed Barnier’s briefing, several member states reaffirmed their opposition to U.K. “cabotage” requests, which would allow British truckers to make trips that start and end inside the EU once the transition period ends. The same group also said that open issues such as geographical indications were key to them.

When several member states, including France, Belgium and Denmark, raised the issue of emergency contingency measures for a no-deal scenario, Barnier urged them to keep their cool. He said that a detailed discussion on such measures now would send the wrong signal to the U.K. with talks still ongoing.

©2020 Bloomberg L.P.

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