In the Political Declaration agreed between the UK and the EU last November both sides committed to holding a high-level meeting in June 2020 in order to take stock of progress and agree the pathway for the remainder of the negotiations.
About halfway through the 13-month negotiating period outlined in the Revised Political Declaration and Revised Withdrawal Agreement and just before the deadline for an extension on 1 July, this meeting was billed early on in the negotiations as the point at which one side may dramatically walk away, or an extension would be agreed. As it turned out the dramatics were kept to a minimum; however, the high-level conference did highlight new and existing tensions between both sides.
An extension to the transition period is extremely unlikely:
Both the UK and the European Commission noted the UK’s decision not to ask for extension to transition at the high-level meeting. This followed the UK’s opposition to an extension through the Joint Committee, the official channel through which an extension is requested, on 12 June. The result of this is that an extension is now very unlikely, meaning that rapid progress in the negotiations is now more important than ever.
Achieving a deal alone is not enough to prevent serious disruptions to business and the economy. Even when a deal is struck Government, business and individuals will need time to familiarise themselves with the new rules, create and issue guidance and adapt business functions and supply chains accordingly.
As, if is common in EU trade negotiations, a deal is not reached until the 11th hour there will only be a few short weeks for these changes to be made. In this event the impacts of moving suddenly from the status quo to the new negotiated outcome would be significant, creating large costs and disruption as businesses on both sides move to adjust.
It is therefore crucial that UK and the EU build a timeframe that allows businesses to adapt to new trading arrangements, potentially by phasing in the new rules over a time limited period once a deal has been reached. The Institute for Government has set out a variety of options for how this could be done.
The UK has already shown flexibility in this regard with a new phased border planning arrangement for 2021. This is a welcome, and this kind of flexibility and pragmatism will help make any new agreement be brought in successfully.
A new schedule for talks:
The UK and the EU agreed a new timetable for negotiations during the summer. This new timetable allows for in person meetings (where these can be done safely), meetings in smaller specialised groups, and creating the space for the Chief Negotiators and their teams to meet bi-laterally.
Negotiating rounds will take place in July, August and in September, with six rounds given set dates, taking place once per week between 29 June and the week of 27 July, with one further round agreed for 17 – 21 August. The two sides have also set out, that if possible, they will try to outline an early understanding on the principles of a deal over the summer.
However, while the UK wants to assess progress in the Summer, the EU has said they will continue to focus on an Autumn deadline. Many in the EU believe this is the earliest Member States are likely to turn their focus to Brexit given the COVID emergency playing out across Europe.
Continuing disagreement on the big issues:
Following the high-level meeting the UK Prime Minister said the EU and the UK were "not that far apart" with regards to the future relationship, but he added that the talks needed "a bit of oomph".
This is certainly true, if you look at both the UK and EU legal texts, across most issues there are only minor differences. However the high-level meeting appears to have done little to resolve the main divergence points that have been central issues throughout these negotiations, those being the so-called level playing field on state aid and competition, the governance structure for the free trade agremenet and fishing rights.
In these negotiations, nothing is agreed until everything is agreed, and therefore progress on these major disagreements over the summer will be of vital importance to identify the landing zone for a final agreement.