UK & EU trade deal almost certain

UK-EU dissonance disguises the fact that they are really singing from same song sheet

THERE are solid grounds for optimism that the European Union and the United Kingdom will achieve a fair and satisfactory trade deal. Initial documents spelling out their objectives show that the two sides aren’t too far apart. A trade accord with at least the broad outlines negotiated could well be reached by the end of 2020.

UK media have generally ignored documents that spell out the stance of both parties

The EU’s 33-page outline on “negotiating a new partnership with the UK” largely contradicts the negative outpourings of some of the UK media. Some reports have claimed that Prime Minister Boris Johnson is ready to walk away from a deal if the EU foists its regulations on the UK.

A close look at the documents stating the two parties’ positions indicate that these pessimistic conclusions are exaggerated.

Inevitably, as occurs in all negotiations, there will be snags and sturm und drang. But it is evident that ultimately realpolitik is driving the leaders and negotiators, as both the EU and UK need each other.

A few examples from the documents show that both parties are singing from the same song sheet.

The EU states that it is determined to have as close as possible a partnership with the UK. “Such a partnership should cover trade and economic cooperation as well as other areas. In particular (these are) the fight against terrorism and international crime, as well as security, defence and foreign policy.”

In turn the UK government says that it “wishes to see a future relationship based on friendly cooperation between sovereign equals”. UK negotiators “will work hard to achieve a balanced agreement that is in the interests of both sides, reflecting the wide range of shared interests. Any agreement must respect the sovereignty of both parties and the autonomy of our legal orders.”

The UK negotiators add: “This points to a suite of agreements of which the main elements would be a comprehensive free trade agreement covering substantially all trade, an (annual) agreement on fisheries, and an agreement to cooperate in the area of internal security”.

“This would include “a number of more technical agreements covering areas such as aviation or civil nuclear cooperation,” the UK negotiators continue. “These should all have governance and dispute settlement arrangements appropriate to a relationship of sovereign equals”.

Open competition and fishing accord

The EU also states there should be “an ambitious, wide-ranging and balanced economic partnership encompassing a free trade agreement”.

It should include provisions on fisheries and “be underpinned by robust commitments ensuring a level playing field for open and fair competition”. The EU also emphasises that “the economic partnership should ensure that the parties retain their autonomy and the ability to regulate economic activity”.

The UK agrees, stating that Britain should protect its industry from unexpected surges in imports and unfair trading practices. “There should be no tariffs, fees, charges or quantitative restrictions between the UK and the EU,” the UK negotiators state.

Agreement likely on data protection, health and anti-money laundering

The EU adds that both sides should have appropriate levels of protection for public health, animal and plant health and welfare, social services, public education, safety, and the environment. This includes the fight against climate change.

The EU’s document continues that the accord should include public morals, social or consumer protection, privacy, data protection, and promotion and protection of cultural diversity. Both parties should also counter money laundering.

Financial services regulations likely to be similar

The Johnson government states that “the Agreement should require both sides to provide a predictable, transparent, and business-friendly environment for financial services firms”. This would ensure financial stability and provide certainty for both business and regulatory authorities. There would be market access and fair competition.

“Given the depth of the relationship in this area, there should also be enhanced provision for regulatory and supervisory cooperation arrangements with the EU,” the UK states.

The EU concurs: “The envisaged partnership should reaffirm the parties’ commitment to preserving financial stability, market integrity, investor and consumer protection and fair competition”.

These are only a few similarities. There are a lot more. The UK’s friendship with Europe runs deep and vice-versa.

© copyright Neil Behrmann (First published in The Business Times Singapore

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