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Brexit: What next for the trade talks between the UK and EU?

Published on: 27 February 2020

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Earlier this week the UK Government and EU each agreed their respective mandates for the negotiations on future trading arrangements.

 

The mandates set out each side’s goal and ambitions for the trade talks to follow. Negotiations are due to start in Brussels on 2 March 2020.

 

The UK's negotiating team will be led by David Frost, whilst the EU delegation will be led by Michel Barnier.

 

What we know at present is that there are some broad similarities. For example, each side agrees that they want a free-trade agreement, with no tariffs.

 

However, there are some clear and key differences, namely each side’s expectations on state aid, workers’ rights and level playing field arrangements. Perhaps unsurprisingly, the EU wants the UK to have close alignment in these areas.

 

Setting out the UK’s mandate, Michael Gove MP, Chancellor of the Duchy of Lancaster and Minister for the Cabinet Office, told the House of Commons the UK would not accept alignment with EU laws. 

 

The UK Government’s mandate was presented to Parliament and is now available to view online. Within the mandate, the UK Government says it will walk away from the talks in June unless there is significant progress. 

 

In recent weeks, Boris Johnson and David Frost have called for Canada style agreement with the EU which would include zero tariffs. These calls have been rejected by Michel Barnier who instead suggested that the geographical closeness of the two sides meant this type of arrangement would not be possible.

 

The general key positions from the EU negotiating mandate are:

  • EU standards should serve as a reference point for any trade deal
  • Any agreement should uphold common high standards and corresponding high standards over time
  • The standards or level playing field arrangements should apply in the areas of state aid, competition, state-owned enterprises, social and employment standards, environmental standards, climate change, relevant tax matters, other regulatory measures and practices in these areas
  • The agreement should be underpinned by robust commitments ensuring a level playing field for open and fair competition
  • The agreement must respect the integrity of the Union’s Single Market and its Customs Union
  • The envisaged partnership should aim at establishing a free trade area ensuring no tariffs, fees, charges having equivalent effect or quantitative restrictions across all sectors provided that a level playing field is ensured

The general key positions from the UK negotiating mandate are:

  • Not to agree to any obligations for UK laws to be aligned with the EU’s, or for the EU’s institutions, including the Court of Justice, to have any jurisdiction in the UK
  • To establish a free trade agreement on the lines of the free trade agreement which has already been agreed by the EU in recent years with Canada
  • Invite contributions from stakeholders on the economic implications of its future relationship with the EU, which will be achieved through a consultation in the spring
  • Ensuring that any agreement provides liberalised market access, ensuing there are no tariffs, fees, charges or quantitative restrictions on trade in manufactured and agricultural goods between the UK and the EU
  • To address and correct regulatory barriers to trade, while preserving each party’s right to regulate in this area
  • Encourage the use of relevant international standards and cooperation between standardising bodies – include labelling requirements to ensure these are applied in a non-discriminatory manner and do not constitute unnecessary obstacles to trade
  • Using a protocol for the mutual recognition of certificates of conformity for marine equipment. This protocol is to facilitate trade in marine equipment and is similar to the EU-US agreement in this area. The UK considers mutual recognition should be provided based on both parties adoption of the relevant international instruments of the International Maritime Organisation (IMO) and the relevant testing standards

If the UK leaves the EU without an agreement both parties will rely on World Trade Organisation (WTO) rules to trade with one another. WTO rules are the terms countries use to determine tariffs when they do not have free-trade deals.

 

British Marine members seeking further advice on Brexit can view the British Marine microsite or contact Brian Clark, Head of Public Affairs, Policy & Research, on bclark@britishmarine.co.uk.