EU’s Barnier Warns Brexit Deal Is ‘Unlikely’ as Progress Stalls
The European Union and U.K. warned they may not be able to strike a deal on their post-Brexit relationship after a testy week of negotiations that saw little progress. The pound fell.
“At this stage, an agreement between the U.K. and the EU seems unlikely,” the bloc’s chief negotiator Michel Barnier said after talks broke up on Friday. “Too often this week it felt as if we were going backwards more than forwards.”
The two sides are still at loggerheads in several areas, most notably over what rights EU boats will have to fish in British waters and the level playing field -- rules designed to stop the U.K. undercutting the bloc’s economy. Agreement on both those subjects is a precondition for a wider trade deal, meaning businesses and consumers face the return of tariffs and quotas at the year-end if the talks fail.
“We have had useful discussions this week but there has been little progress,” David Frost, the U.K.’s Europe adviser, said in a statement released as Barnier was talking. “Agreement is still possible, and it is still our goal, but it is clear that it will not be easy to achieve.”
The pound retreated 0.4% against the dollar, reversing earlier gains of as much as 0.3%.
The U.K. tried to unlock the deadlock this week by submitting a confidential draft of the final deal, setting out where the major differences remain. Barnier said that although it was “useful” to see the British position, “we can’t have people working on a unilateral basis.”
‘No Progress Whatsoever’
After a slow start as the coronavirus pandemic struck, there was a burst of optimism in June after Prime Minister Boris Johnson convinced the EU side that he was serious about getting a deal. But the positivity has ebbed as the negotiators have been unable to bridge the biggest divides.
On Friday, Barnier said there had been “no progress whatsoever” on fisheries, the two sides are “far from agreement” on the dispute mechanism for any deal and there remain major problems in the area of law-enforcement cooperation where the EU wants to protect any sensitive data it shares with the U.K.
“We still haven’t seen from our British partners any willingness to take on board the EU’s priorities,” Barnier said.
Frost countered by saying that the EU still wasn’t treating the U.K. as an equal sovereign partner and was demanding too much that went beyond a regular trade deal.
“When the EU accepts this reality in all areas of the negotiation, it will be much easier to make progress,” he said.
The U.K. initially wanted a deal by the summer, while the EU has seen a summit of European leaders in mid-October as a hard deadline. But Barnier raised the prospect of negotiations going on longer than that -- even if they were unlikely to succeed.
“Any delay beyond the end of October would put a serious risk onto the outcome of this process,” he said. “I do not understand why we are wasting valuable time.”
The two sides will resume face-to-face discussions in London in the week of Sept. 7.
©2020 Bloomberg L.P.