Trade

Brexit inches forward — just dont mention the tunnel

LONDON — Both sides need to blink — otherwise they might miss it.

Thats the advice for the U.K. and EU from Hilary Benn, chairman of the House of Commons Brexit select committee, ahead of (another) crucial week of free-trade talks.

The last scheduled formal negotiating round kicks off in Brussels Tuesday, with less than 100 days before the Brexit transition period ends, after which a no-trade deal departure and the hard reality of tariffs looms.

Benn, the bookish Labour MP who has scrutinized each step of the Brexit process since 2016, insisted both parties would have to concede to avoid a no-deal. “There has to be movement on both sides,” he told POLITICO in an interview. “Were now coming to the crucial stage because time is running out. There are various deadlines, but if theres going to be an agreement, the negotiators have got to get on with it.”

The former Cabinet minister, and son of the Euroskeptic Labour grandee Tony Benn, is confident there will be a deal to avoid the pain of tariffs. And he said the coronavirus crisis should be a driving force.

“Were facing our worst economic crisis for 300 years,” he said. “Why on earth would any politician on either side of the Channel want to add to that by failing to reach an agreement? It would be extraordinary. It would be a failure of politics.”

Some warn that a legal niggle for one member state could still put a bomb under the deal.

Indeed, the impact of Brexit and the coronavirus crisis are now being considered in the same vein by the civil service, according to Eurasia Groups Managing Director for Europe Mujtaba Rahman and confirmed by a Whitehall official. “Its impossible to look at one without noting the other,” the official said.

But the same official insisted the U.K. government is not being bounced toward agreeing a deal because of the challenges of responding to the coronavirus, despite a sense that preparation on border management is not where it should be.

COVID-19 is just one more pressure against the ticking clock of the Brexit talks. Even if a deal were struck this week, it would be a mammoth task for civil servants to update guidance for businesses and the public, and an uphill struggle for weary Brits to absorb it after months of bombardment with confusing coronavirus messaging.

British MPs meanwhile would have to pass a heap of legislation at breakneck speed, at a time when parliament is already complaining about its powers to scrutinize. “Everyones patience is just wearing really thin,” the official said.

Dont talk about the tunnel

The two sides hope to make significant progress on sticking points this week to allow a move into the so-called “tunnel” — where the legal text of a free-trade agreement is hammered out through intensive talks.

But after optimistic reports at the weekend, officials on both sides of the Channel are working to play down expectations that a breakthrough is imminent. And it seems no one likes to talk about the tunnel. “People get very excited about the idea of a tunnel,” one EU official said. “I think people are getting too excited about it, too obsessed with it.”

Even if intensive talks do begin, the process is far from over. Some warn that a legal niggle for one member state could still put a bomb under the deal.

“I think the tunnel, and the end of the game, is not that productive,” said former Brexit Secretary David Davis. “So Im not sure the tunnel delivers you a great deal, except to waste time.”

Some on the EU side expect efforts to avoid fudges of the kind that were written into the Withdrawal Agreement the two sides agreed last year. After the U.K. sought to override parts of the previous deal through the Internal Market Bill, there is a reluctance to allow Britain room for maneuver.

“The issue of trust is really important,” the same EU official quoted above said. “If on one hand you are negotiating a new relationship with somebody and on the other you are trying to piece a previous agreement back together, its not a great situation.”

But the ticking clock strikes again, allowing little time for caution. There is a matter of weeks to lock in a deal that would usually take years to agree and scrutinize with a fine-tooth comb.

The big outstanding issues continue to be state aid, fish and governance. On the former, EU diplomats insist Brussels needs reassurance that the U.K.s state aid regime will have an independent arbiter and a dispute resolution mechanism with teeth.

On fish, an EU official dismissed recent positive buzz about a breakthrough as Italian spin — a country that has no stakes in a fish deal with the U.K.

Some observers argue the row over the Internal Market Bill was the U.K. making a stink before a concession in the coming weeks. But Davis is not so sure: “At the end of the day, there is not going to be a great deal of British movement on these things.”

Legal wrangle

The extent to which the Internal Market Bill created bad blood will be put to the test this week. Brussels gave the U.K. until Wednesday to delete the offending clauses that override the Withdrawal Agreement. But despite other concessions, Downing Street insisted the legislation would remain in play.

However, the bill is now not expected to make its next move in the U.K. parliament until December, by which point both sides hope to have struck a deal, and so the row may have stabilized itself at an impasse. During a press conference on Monday, European Commission Vice President Maroš Šefčovič refused to spell out wRead More – Source