Britain, EU agree to intensify post-Brexit trade talks

Negotiators see optimism amid turnaround in talks following weekend blame game

Britain's Chancellor of the Duchy of Lancaster Michael Gove speaks at the House of Commons in London on Oct 19, 2020. PHOTO: REUTERS

LONDON/BRUSSELS • Britain and the European Union yesterday agreed to intensify trade talks and work on legal texts, a breakthrough of sorts after British Prime Minister Boris Johnson said he was walking away from negotiations that had been deadlocked for weeks.

After a weekend of both sides trading blame for the lack of progress and calling on the other to move first, chief negotiators David Frost and Michel Barnier were said to have agreed to a British demand to start working on legal texts.

With just over two months before Britain ends a status quo transition arrangement with the EU, any chance of securing a deal to protect billions of dollars in trade was hanging in the balance.

It seemed that to try to restart the talks, Mr Frost and Mr Barnier decided to jump together, though with both sides far apart on key issues, any deal may still be hard to come by.

"There has been a constructive move on the part of the European Union and... I prefer to look forward in optimism rather than necessarily to look back in anger," Mr Michael Gove, London's point man on the divorce deal, told Parliament.

Mr Gove's new-found optimism was in stark contrast to his tone barely half an hour earlier, when he issued the EU another ultimatum that it must "fundamentally change" its approach if it wanted to rescue trade talks.

Mr Barnier tweeted: "I just spoke to David Frost... I confirmed that the EU remains available to intensify talks in London this week, on all subjects, and based on legal texts."

What looks like the possible resumption of talks comes after a weekend when both sides blamed the other for their all but failure. But it by no means ensures that they will reach an agreement.

Negotiations broke down last Thursday, when the EU demanded Britain give ground, especially over fair competition rules, including state aid, and fisheries.

In turn, Mr Johnson said last Friday that there was no point in continuing talks, adding that Britain would "prosper mightily" without a deal.

That would mean Britain trading on World Trade Organisation (WTO) terms: Tariffs would be imposed under WTO rules, likely causing significant price rises. Such a scenario would throw US$900 billion (S$1.2 trillion) in annual bilateral trade into uncertainty.

Mr Gove, in Parliament, repeated Britain's demands: "We have to be in control of our own borders, our fishing grounds, we have to set our own laws; we have to be free to thrive as an independent free trading nation."

A no-deal finale to Britain's five-year Brexit drama would disrupt the operations of manufacturers, retailers, farmers and nearly every other sector - just as the economic hit from the coronavirus pandemic worsens.

Regardless, Britain is launching a campaign this week urging businesses to step up preparations for a no-deal departure.

"Make no mistake, there are changes coming in just 75 days and time is running out for businesses to act," Mr Gove said in an earlier statement.

More than 70 British business groups representing over seven million workers on Sunday urged politicians to get back to the negotiating table and strike a deal.

REUTERS

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A version of this article appeared in the print edition of The Straits Times on October 20, 2020, with the headline Britain, EU agree to intensify post-Brexit trade talks. Subscribe