Tension and uncertainty stalk trade talks | Forum

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xysoom May 29

The next round of talks between David Frost and the EU's Michel Barnier take place next week
  Despite the fear, the misery and the suffocating uncertainty of Covid-19, by now you've no doubt heard on the Brussels-Paris-Berlin-Dublin-Belfast-London grapevine: the post-Brexit trade talks between the EU and the UK are in trouble.To get more news about WikiFX, you can visit WikiFX news official website.
  Sure, there's agreement in basic free trade discussions but clashes on key issues remain. On Tuesday, Ireland's Foreign Minister Simon Coveney said the two sides looked like they were heading for a crisis which, from the Irish perspective, was “very, very serious”.
  So, should we be concerned?
  Ok, I'm being intentionally provocative. I'm hoping you'll peruse this blog on Brexit even though you're drowning in must-reads on coronavirus. But I certainly don't mean to be flippant.
  Image copyrightEuropean Commission
  The fact is: a crisis was always predicted in EU-UK trade talks. They are multi-layered and complicated. The first time ever in trade negotiations that two parties are focused on loosening the ties that bind them (now the UK is no longer an EU member state) rather than creating new and closer bonds.
  What the two sides want
  The UK seeks more than a basic economic relationship with the EU, whatever impression some UK politicians may seek to give.
  For example, the UK government hopes to continue to benefit from EU-wide data sharing arrangements. It wants access to the central intelligence database of the EU's law enforcement agency Europol. Germany is not at all keen on that idea. It says once you've left the club, forget the perks. You can't have your cake and eat it.
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  The two sides want to work together in research and development, transport, chemical waste, law enforcement and judicial co-operation. Then there's the contentious issue of fish: to what extent EU fishermen will be allowed access UK waters.
  Here, the UK turns the tables and accuses Brussels of trying the cake-and-eating-it routine. The EU wants to keep the same fishing quotas as when the UK was a member state. And if there's no agreement on fishing, the EU threatens, there'll be no trade deal at all..
  You get the picture.
  Wrangling over competition rules
  The EU is also deeply concerned about possible unfair competition. UK businesses know the EU market well and have great contacts after more than 40 years of membership.
  Brussels worries that if the UK slashes regulations such as labour, state aid and/or environmental rules in the future, then that will give UK businesses an advantage over European ones in their own single market. So, the EU wants a commitment from the UK to keep in line with its competition regulations long after Brexit. Something the UK says as a sovereign country it cannot and will not do.
  It points out the EU did not impose similar demands on Canada in their zero-tariff, zero-quota trade deal.
The EU response: Canada doesn't have zero tariffs, zero quotas in all areas such as agriculture. UK farmers presumably wouldn't be thrilled, says Brussels, if they were left out in the cold.
  Also, EU leaders, such as Germany's Angela Merkel, view the UK as a far bigger threat on their doorstep. Geographically far closer than Canada; trade volumes far higher.Political intervention is needed on both sides in order to find compromise. But political leaders have more than their hands full with coronavirus at the moment.
  There's also a suspicion in Brussels that the UK is dragging it feet. “Selectively negotiating,” as one influential EU figure put it to me: in other words refusing to engage in areas where it doesn't want to compromise, such as fishing and competition regulations.
  The assumed UK hope is that, later in the year, with time running out and Brussels anxious to avoid a no deal situation, the EU will give in, give up and compromise far more than it had intended to.
  The UK's chief negotiator David Frost denies the UK is doing anything other than negotiating in good faith.

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