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UK outlines its opening position over EU trade talks

By Philip Smith

Borders, fishing, financial services and competition are major differences as the EU and UK prepare to start trading agreement negotiations

UK cabinet office minister Michael Gove API

The UK has told Brussels it wants a trade deal within four months, or it will ramp up its preparations for there being no deal.

It is the latest salvo in what looks increasingly like a bitter battle of wills between London and the EU as the two sides seek to strike a post-Brexit working agreement.

Following the EU’s stated starting position, outlined earlier this week, the UK has now issued its expectations and it immediately became clear where conflicts would arise.

The current transition phase ends on December 31. If no trade deal is struck by then – unless an extension is agreed, something the UK has repeatedly said it would never seek – the two sides revert to working under World Trade Organisation rules. Talks begin next week and both sides say they want a deal.

The UK government has said the right to self-determination – the bedrock of Brexit – will trump economic concerns. “At the end of the transition period, the UK will fully recover its economic and political independence,” cabinet office minister Michael Gove told Parliament. “We want the best possible trading relationship with the EU, but in pursuit of a deal we will not trade away our sovereignty.”

In effect, the UK will not entertain any demands that ties it into a single market, customs areas or abides by existing rules. This something close to the EU’s heart as it looks to negate the prospect of Britain becoming a major competitor to the bloc by undercutting taxes and regulations.

The issue over the Irish border remains a stumbling block. A hard border between the UK (Northern Ireland) and the EU (Irish Republic) threatens to destabilise the two countries as it undermines the Good Friday peace agreement. A border between NI and Britain is domestically unacceptable.

Fishing is another conflict area. The EU is under pressure from its sea-faring member states to ensure it retains fishing rights in UK waters. The British have stated that, as an independent coastal nation, it will not trade away such fishing rights.

Even so, it is pushing for “legally binding” obligations on access to the EU market for its financial services industry, a major driver of the UK economy.

Usually opening gambits are simply starting positions in negotiations yet the two sides seem so far apart on fundamental points that compromise looks uncertain. Hence PM Boris Johnson’s pledge to prepare for no deal unless the two sides reach a quick resolution.

FURTHER READING: Irish border row puts EU-UK trade deal at risk

FURTHER READING: New EU trade commissioner to seek reset of EU/US trade relations

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