Negotiators to lock horns in Brussels as EU-UK talks get underway (FT)
- Around 100 British officials are making the trip to Brussels today, as the two sides open negotiations with competing visions of what that relationship should look like — and very little time to reconcile them.
- No fewer than 11 different groups of officials will work in parallel to dive into the details of everything from trade in goods to civil nuclear cooperation and access to fishing waters. The European Commission’s headquarters cannot provide enough meeting rooms, so negotiators will be decamping to a conference centre downtown.
- For the UK, the goal is to secure the maximum market access that is compatible with its overriding goal of pure, unfettered national sovereignty; for the EU, the aim is a relationship that makes market access contingent on deep policy commitments, and binding dispute-settlement.
- The UK has rejected the EU’s demand that Britain stick within the bloc’s state-aid regime, saying such “dynamic alignment” undermines the very raison d’être of Brexit. It has also pushed back against the EU’s call for a broader “level playing field” of regulatory standards that would be backed by penalties if either side breaches its obligations.
- Both sides are already looking to an EU-UK summit in June as a key moment to resolve any impasse; Mr Johnson has threatened to walk away from the negotiations if no progress has been made by then.
- By that stage, only six months will remain until the end of Britain’s post-Brexit transition period, with the prospect that the EU and the UK could be left trading on basic WTO terms.
Business group calls for more customs agents funding (FT)
- The government needs to invest “significant resources” to train customs agents to help UK companies trade after Brexit, according to a submission to the Treasury by the British Chambers of Commerce (the “BCC”).
- The business lobby group said that customs declarations on goods would increase from 55m to 300m a year after Brexit, based on official estimates, and the government last week suggested the paperwork would need to be filled in by tens of thousands of new, trained professionals.
- At an average of £32.50 for each declaration, this also means a multibillion-pound cost in annual transaction fees, which could be passed on to consumers. The BCC warned that there were “currently not nearly enough [customs agents] in the market to meet the potential demand”.
- Last week, Cabinet Office minister Michael Gove agreed with industry estimates that up to 50,000 people will have to be recruited to fill in the customs paperwork under the government’s preferred trade deal with the EU, and this has sparked concerns among businesses about the costs of the red tape after the Brexit transition period ends in December.
- The BCC has called for a series of measures in the Budget to address big upfront costs facing UK businesses — such as business rates and tax compliance — and initiatives to address skills shortages and investment in infrastructure.
UK-EU market-access decisions must be made swiftly through dialogue, UK chancellor says (MLex)
- Decisions on market access for banks and other financial services companies should be concluded “swiftly,” with a dialogue established to smooth the assessment process, the UK chancellor has told the EU financial services chief.
- Meetings should be set up between UK and EU officials to “work efficiently through the issues at hand” regarding equivalence decisions, Rishi Sunak said in a letter to the European Commission financial services vice-president Valdis Dombrovskis
- The UK is committed to meeting a deadline of the end of June, Sunak added, a date baked into the EU-UK political declaration, which sets out the framework for the future relationship between the EU and the UK. That, however, only commits both sides to “endeavour” to conclude assessments before the end of June, rather than make the actual decisions — leaving companies nervous about the level of political commitment and short timeframe
- Equivalence decisions are needed in around 40 areas, but Sunak said reaching them should be an easy task given that the UK is fully aligned with the EU in financial services regulation, after essentially copying all EU law into its statute book in time for 2021
- While policymakers and the private sector have argued that UK law will be completely equivalent to Brussels on day one, over time divergence is expected as a result of the differing nature of both sides’ markets — and at this point either could conclude that the other’s laws are not, strictly speaking, equivalent.
- The UK’s negotiating position calls therefore for an “appropriate consultation and structured processes for the withdrawal of equivalence findings, to facilitate the enduring confidence which underpins trade in financial services.”