Cian Hassett, Global Graduate London, Bord Bia - The Irish Food Board
Face-to-face Brexit talks cancelled over coronavirus fears.
The second round of Brexit trade negotiations will not take place in London next week, as the UK and EU explore ways to keep talks going despite increasing travel restrictions resulting from the coronavirus pandemic. In a joint statement on Thursday, London and Brussels said face-to-face negotiations would not take place. More than a hundred trade experts were due to arrive to London from Brussels next week to continue on from the first round of talks that Michel Barnier, the EU’s chief negotiator, said revealed serious divergences between both sides. The two sides had planned to complete five rounds of talks by mid-May, allowing substantial ground to be covered ahead of an EU-UK summit in June. EU officials have state that alternatives such as video conferences, while useful as a last resort, would never be able to replace the face-to-face talks given the need for both sides to be able to work together on legal text.
UK and EU agree to ‘dial down rhetoric’ over Brexit in an effort to open up space for a deal, it has emerged.
Brussels and London are expected to produce legal texts of their negotiating positions next week, with diplomatic sources claiming both sides have agreed to “lower the temperature” to enable the texts to be considered in detail to assess the scale of divergence. While the coronavirus outbreak has pushed Brexit out of the spotlight, negotiators are concerned that behind the scenes efforts must continue if they are to seal the outline of a trade deal before June. Four areas, including fishers and crime and justice have already been identified as the areas of deepest conflict – with little hope of progress in the second round of talks.
On Northern Ireland, the EU has made it clear that the onus is on the UK to come up with a plan to implement the controversial special arrangements, which include a trade barrier down the Irish Sea. The expectation is that the UK will come to the inaugural meeting of the EU-UK joint committee meeting on March 30th with its first such proposals. With the UK vowing not to extend the transition period beyond December 31st, negotiations experts say a row will inevitably be deployed as a tactic, potentially around the much argued fisheries topic.
In its Economic and Fiscal Outlook report, the Office for Budget Responsibility has said that Brexit has led the UK economy to be 2% smaller than it would have been.
Against a backdrop of coronavirus and slowing global growth, the OBR modelled for a 5.2% loss of potential GDP over 15 years if a typical free trade agreement was struck. They said that Britain had already lost 2% of potential output since the 2016 referendum with an additional 3.2% predicted, blaming rising trade friction among other issues. The OBR went on to say that higher trade barriers would cause imports and exports to be about 15% lower after 10 years.
UK hard-line Brexit stance starts to sour relations with UK businesses.
Exporting unfrozen processed meat products such as sausages to the bloc’s single market will require an export health certificate – something which previously did not exist for that type of food. Dairy products such as milk, yoghurt and eggs will need a vet to sign off their provenance, something which could cost from £200-£900 per product. Nick Allen, head of the British Meat Processors Association, warned of the impact on consumers if the UK an EU fail to agree a zero tariff, zero quota trade deal by the end of the year. Dominic Goudie, who is head of international trade at the Food and Drink Federation added that it was quite clear that the needs of business were not always at the forefront of the UK government’s considerations.
Key Dates
18th-19th June 2020: UK/EU summit to discuss progress on trade deal
30th June 2020: Deadline for the UK and EU to extend the transition period
31st December 2020: If a trade deal has been agreed by this date, new relationship with EU starts. Otherwise, the UK exits transition period without a trade deal.
31st December 2022: Last date to which transition period can be extended