UK-EU TRADE NEGOTIATIONS: THE LAST FOUR MONTHS William Bain British Retail Consortium www.brc.org.uk
EU-UK NEGOTIATIONS TIMELINE – THE NEXT FEW MONTHS • June 29-July 27 – Current Negotiating Round. • July 1 – Extension provision in Withdrawal Agreement for transition period lapses. Germany takes rotating six-month Presidency of Council of the European Union. • Mid-July – UK Govt launches comms campaign and publishes Border Operating Model. • August 15-19 – Further Negotiating Round. • September/October – Political agreement on main principles? • October 31 – Legal text required to be finalised. • November/December – Ratification at Westminster and in European Parliament (depending on how extensive agreement is possibly at domestic member state level too)
EU-UK TRADE – THE ISSUES AT STAKE • State Aid and the wider level playing field the biggest issue between both sides. For the UK the main concern is one of sovereignty, for the EU it is having EU production undercut by UK state subsidies. • EU opening position is that the UK should remain in lockstep with EU standards on state aid, which may involve a role for the European Court of Justice as the ultimate arbiter of EU rules. • UK position is for a separate subsidies system with notification between both parties every two years. Freeports, Green New Deal? • Could there be common principles and standards instead? • Retaliatory tariffs for breach of common principles on subsidies in dispute resolution process breaks down? • Solution could be found but time remaining the biggest constraint.
EU-UK TRADE – THE ISSUES AT STAKE Tariffs – zero-tariff, zero-quotas deal only possible with LPF and deal on fisheries, governance. European Parliament will not ratify a deal without an LPF. Rules of origin – UK approach for full cumulation with content from both UK and EU FTAs. EU says impossible. Would require re-negotiation of its FTAs. EU offering PEM Convention with more limited cumulation options. Considers UK option could lead it becoming offshore manufacturing hub for EU market. Product certifications and assessments – UK seeking mutual recognition of conformity assessment with the EU. EU not happy with this proposal. Feels UK could take advantage of strong position on EU conformity assessments. Food legislation & organic food – UK seeking third country equivalence model. EU not in favour on either currently. Labour mobility – UK seeking mutual recognition of qualifications, long intra-company transfers and Mode 4 access on supply of services. EU not keen.
EU-UK TRADE – BUSINESS READINESS • Leave Single Market and Customs Union on 1 January. • UK Govt has made some unilateral decisions to apply on a no deal outcome (or to be included within a deal) – phases in payments of customs duties, SPS checks, import VAT easement. • But significant disruption would still occur. These easements do not cover red tape on the EU side in getting goods to GB. Issue of vehicle and driver permits important in BOM. • Having mutually agreed easements or phase—in terms within the final agreement would be preferable. • On some areas have 6 months to get ready – Protocol. On some 9 months – SPS paperwork (inbound to GB). On some 12 months – payment of customs duties. • Preparations required NOW. Role of BRC finish groups important in coming months.
OTHER TRADE NEGOTIATIONS • UK-US negotiations proceeding well. Third round due at end of the month. Market access offer not tabled yet by US. Still doubts over reaching full FTA by time of November 4. • UK-Japan negotiations need to be concluded by end of July for ratification in the Diet. • UK-Australia negotiations due to begin alongside UK-NZL. • Trade continuity not complete. On last briefing half of agreements require rollover by 1 January. Some may need to be adjusted, eg. Norway. • GSP transition requires delegated legislation in September. UK may make some short- term small improvements – are consulting stakeholders informally for views. • Will UK join EU and others in making stand against protectionism? EU Trade Policy Review launched this month. Where is UK equivalent on the big strategic questions?
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