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Poor Start to EU-U.K. Trade Talks With Accusations of Bad Faith

Poor Start to EU-U.K. Trade Talks With Accusations of Bad Faith
imageEconomy1 hour ago (Feb 24, 2020 11:27AM ET)

Poor Start to EU-U.K. Trade Talks With Accusations of Bad Faith

(Bloomberg) — The U.K. and the European Union are increasingly at odds ahead of next week’s trade talks, with each side accusing the other of backing away from past promises.

Regaining political independence and freedom from the EU’s legal system will take priority over securing a trade deal by the Dec. 31 deadline, Prime Minister Boris Johnson’s spokesman, James Slack, told reporters on Monday. And in a move that risks stirring concerns in Dublin, the U.K. is refusing to ask ports to get ready to implement new checks on goods moving between Britain and Northern Ireland, he said.

That position appears to defy the deal that broke the Brexit deadlock last year. Irish Prime Minister Leo Varadkar said “there can be no backsliding” on the Northern Ireland protocol in the Withdrawal Agreement, broadcaster RTE reported on Monday. Varadkar, who is acting as caretaker premier after losing this month’s election, said the withdrawal agreement is an international treaty and “we expect the British government to honor that in full.”

The EU is due to sign off its negotiating mandate for the talks on Tuesday, with the U.K. expected to follow on Thursday. Those documents will set out the parameters for different areas of discussion.

But the background noises are already bad-tempered, and Johnson — who is ideologically committed to Brexit and has a significant majority to rely on in Parliament — is taking a negotiating position that raises the risk that no trade agreement will be reached before the Brexit transition period expires at the end of the years.

The U.K. is also pushing back against the bloc’s insistence that Britain should follow European rules on employment and manufacturing standards if it wants a trade deal. Last week Johnson’s office tweeted a picture of an EU-generated slide suggesting the different kinds of trading arrangement available to the U.K., which concluded that a free-trade deal along the lines of the one done with Canada was the only likely option. “Now they say it’s not on offer after all,” the tweet said. “What’s changed?”

Over the weekend, the U.K. seized on the time it’s taking the 27 member states to agree their joint position, with Johnson’s office accusing the EU of being “hamstrung by indecision and delay due to the competing interests of different member states.” French Europe Minister Amelie de Montchalin did nothing to calm the tension, accusing the U.K. of trying to use “the pressure of blackmail or time” to push a deal through.

While much of this is simply rhetoric, the Irish border issue has been one of the key problems of Brexit for the last three years. Under the Withdrawal Agreement reached by the two sides, goods moving from Northern Ireland to Britain should be largely free from checks — but that’s not the case when goods move in the other direction. In order to avoid a hard border on the island of Ireland after Brexit, the U.K. agreed to apply the European Union’s rules on customs and regulations in Northern Ireland.

In effect, that means customs controls on goods considered at risk of moving into the EU from Great Britain through Northern Ireland, according to the Institute of Government. It also means regulatory checks on goods moving into Northern Ireland from the rest of the U.K. to make sure they meet EU standards.

Although the U.K. is talking tough, its language is slightly different depending on the direction of trade that it’s discussing. Slack said on Monday that goods moving from Northern Ireland to Britain would have “unfettered access.” He declined to say that same about goods moving in the opposite direction.

“We will comply with our obligations,” he said.

After leaving the EU on Jan. 31, Britain has until Dec. 31 to sign a trade deal with the EU — or face crashing out of the bloc and trading on terms set by the World Trade Organization. Johnson has ruled out any extension of this transition period.

In a statement outlining a call between Johnson and Croatian Prime Minister Andrej Plenkovic on Monday afternoon, Johnson’s office underlined that commitment.

“The Prime Minister highlighted that we are not seeking a special or bespoke agreement, but rather one like those the EU has already struck with other friendly countries like Canada,” the readout said. “He emphasized that the U.K. will not extend the transition period or accept any arrangements which subordinate us to EU rules.”

Poor Start to EU-U.K. Trade Talks With Accusations of Bad Faith

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