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UK-EU trade negotiations: They are still playing a game of chicken

Professor Abhinay Muthoo, from the Department of Economics at the University of Warwick comments on the current state of Brexit negotiations, and if we're heading towards a no-deal outcome.

"In the light of the statement from the EU Council Meeting last Thursday, and subsequently the UK Prime Minister Boris Johnson’s statement on Friday, are we now headed for a no-deal outcome? Not at all. On the contrary, a trade deal between the UK and the EU is highly likely to be agreed, but not till next month at the earliest, and probably even not till early December, right close to the deadline.

"It’s typical in many negotiations with a deadline that if an agreement is reached, then it is reached only at the 11th hour – the so-called “deadline effect”. That happened, for example, with the divorce negotiations too, last year.

"Covid has delayed matters yet further since the leaders have been focused on dealing with it, leaving the trade negotiations to their respective teams led by David Frost for the UK and Michel Barnier for the EU. The negotiating teams have already secured agreement on many of the issues, which are not talked about too much in the media, as most have been relatively easy to negotiate and agree upon. But the three substantive issues of fishing rights in UK waters, level playing field conditions (includes state aid) and dispute settlement arrangements are the thorniest of issues to negotiate and agree upon. They were so at the start of these trade negotiations, in February this year, and they remain so today. Breaking the impasse on these three sets of issues will requires compromises of a political nature.

"Indeed, such compromises can only be made at the highest political level. They require political calculations - it is about politics. It will be for Prime Minister Johnson to get involved and decide what, where and when to compromise. Similarly, for EU leaders, to jointly agree amongst themselves on the compromises they will make – which will involve internal negotiations amongst leaders of the key EU countries. In particular, for example, for Chancellor Merkel to persuade President Macron to compromise on his tough stance on fishing rights. We are only now, over this weekend, starting to hear about such talk. It will take a bit more time to pan out; for this game of chicken is not over yet. Concessions will be made, by both sides, absolutely, but probably we won’t hear about these concessions till deep into next month."

ENDS

19 OCTOBER 2020

FOR FURTHER INFORMATION PLEASE CONTACT:

Alice Scott
Media Relations Manager - Science
University of Warwick
Tel: +44 (0) 7920 531 221
E-mail: alice.j.scott@warwick.ac.uk

FOR FURTHER INFORMATION PLEASE CONTACT:

Alice Scott
Media Relations Manager - Science
University of Warwick
Tel: +44 (0) 7920 531 221
E-mail: alice.j.scott@warwick.ac.uk