The ninth round of negotiations on the future UK-EU relationship, which was held from 29 September to 2 October 2020 ended without agreement.
This was the last scheduled round of trade talks agreed by the UK and the EU in their negotiating plan back in July 2020. The UK has always maintained that there needed to be an agreement on a post Brexit trade treaty between the UK and the EU 27 by the time of the European Council meeting on 15 October 2020 if it is going to be in force by the end of 2020. However, at the end of the ninth round of negotiations significant differences still remained with a successful resolution nowhere in sight.
So, what happens now? Are we heading for a no deal Brexit which will see the UK trade on WTO terms with the EU?
It’s hard to say but probably not. This is a game of political brinkmanship and neither party is willing to walk away from the negotiating table.
Therefore, the UK Prime Minister and the President of the European Communities held an emergency meeting on 3rd October to discuss the state of play in the negotiations. They issued a statement recognising the importance of finding an agreement as a strong basis for a strategic UK-EU relationship. They also said they were encouraged by the assessment of both chief negotiators that significant progress had been made in recent weeks. However they added that that significant gaps remained, notably, but not only, in the areas of fisheries, the level playing field (minimum standards in key areas such as competition and state aid, employment, environment and taxation) and governance (how any free trade agreement will be administered and more importantly enforced). They mandated their negotiators to commence further negotiations as soon as possible to find a workable solution to the outstanding areas. A further round of talks is expected this week.
The likelihood is that in the end some form of accommodation between the parties will be found. The EU cannot afford to have an aggressive free trade UK right on its borders cut adrift entirely from the EU and its system of trade regulation and over which it has no control. On the other hand, the UK needs to reach sensible trading terms with its largest trading partner if it is to maintain a stable trading relationship. However, don’t expect a quick deal. This is going to run to the wire.
