Is the EU summit on Thursday the make-or-break moment for the Brexit negotiations?
Boris Johnson said on 7 September that if there was a lack of agreement by the time EU leaders meet in Brussels on 15 October then he could not see any hope of a deal at all, and both sides should at that stage “accept that and move on”.
That day has come. There is no agreement. Johnson clearly has a decision to make, but his chief negotiator, David Frost, will not be advising him to walk away. Sources close to the negotiation say Frost believes a deal is still possible in the next few weeks. A decision from the prime minister is expected on Friday once the EU leaders have given their assessment of the negotiations.
The UK negotiating team complain that the “intensive” talks of the last few weeks have not really been that intensive. They are looking for the leaders to back daily negotiations with both sides committing ink to paper on a joint legal text.
They also want to avoid a Salzburg moment for Johnson. Theresa May was humiliated by her fellow leaders during a summit in the Austrian city when they lined up to trash her proposals. Downing Street is sensitive to the atmospherics.
What is likely to happen?
It is unlikely that Johnson would ignore Frost, who is a trusted confidante. More talks can be expected. France’s foreign minister, Jean-Yves Le Drian, even suggested this week that the next EU summit, on 15 November, could be the next target date for an agreement.
There is certainly some scepticism in Brussels that another couple of weeks, to the end of October, will provide enough time for the gaps between the two sides to be bridged.
Frost will tell Johnson that there is a good deal to be signed off on a range of issues, covering law enforcement cooperation, aviation, road haulage, social security coordination and access for the UK to EU programmes such as its research and innovation scheme Horizon Europe.
The UK negotiator believes the agreement will be thinner than it could need to be, with less mutually advantageous cooperation. The EU has rejected British demands for mutual recognition agreements, for example, which would allow products approved in the UK to be sold in EU member states without the need for Brussels’ regulators to give their approval.
But for all the talk of the UK prospering with a trading relationship with the EU on “Australian terms” – in other words, a no-deal outcome – Frost evidently believes there will be enough in the agreement for it to be worthwhile.
What are the gaps?
There are three obstacles, and the first of these is how to decide future EU access to British fishing waters. The EU has been insisting on the status quo, with catch quotas staying in line with the common fisheries policy. There are signs, however, of some movement. While France is insisting there is no margin for negotiation on the arrangements in the Channel, where French fishermen catch 84% of the cod quota, there appears to be more flexibility in the Celtic and Scottish seas. But the EU would cut into the British quotas in European waters to make up for any losses.
The second issue, more important to many member states than fisheries, is the so-called level playing field provisions, which the EU wants to ensure neither side can undercut standards or overly subsidise parts of the economy to give its companies a competitive advantage in the market.
Here, again, there is movement. The UK has agreed with non-regression from environmental, social and labour standards as they stand at the end of the transition period. The EU wants more. It wants that baseline to be raised over time as Brussels develops its standards. It is a hard sell to the British, who will not want to be tied to EU law. The two sides are looking at other mutually satisfactory solutions. One senior diplomat likened the process to trying to get a child to eat their greens. “What do you do? Do you force it through? The other option is try and find a way around the issue and mix it with bananas. But in the end, it is the same. He or she will eat their veggies.”
The other level playing issue is state aid, or domestic subsidy control. The two sides are writing up principles for inclusion in the deal that would shape either sides’ state aid rulebook. The UK is concerned that Brussels wants quite lengthy rules, with a lot of sectoral provisions. But talks are ongoing. Downing Street appears willing to establish an independent regulator for state aid, which has been a key EU demand.
And finally …
There is the issue of governance: how either side will be able to keep the other to their word. The EU wants to be able to suspend parts of the trade and security deal if the UK reneges on an obligation in any given part of the deal. Both sides would accept binding rulings from a new body. The UK says it will talk about this, but not until all the other contentious areas are fleshed out.