European Union government envoys unanimously rejected demands to amend Michel Barnier’s mandate and allow the bloc’s chief Brexit negotiator to offer more concessions to the U.K., three officials familiar with a discussion in Brussels said.
“The EU and its 27 Member States stand united behind the EU mandate and Negotiator,” according to a memo circulated to delegations following the discussion and obtained by Bloomberg on Wednesday. The memo depicts a situation of “limited progress” in negotiations so far, accusing the U.K. of a “pick and choose” approach and calling for increased preparedness for the event of a chaotic separation at the end of the year.
The EU’s refusal is a blow to British hopes that Barnier would get more room to compromise, and dims the prospects of an imminent breakthrough. Adding to the bleak picture, two of the officials said that the timing of a high-level call between Prime Minister Boris Johnson and the leaders of EU institutions, supposed to inject momentum in the stalled negotiation, is uncertain, as Britain rejected an offer to hold it on Monday. Talks on the timing of the call continue.
Barnier said the U.K. would crash out of the European single market on Jan. 1 unless the British government scales back opposition to key EU demands. These include the bloc’s insistence that any deal include provisions on fishing rights, fair competition and dispute settlement.
“There are still major hurdles ahead of us,” Barnier told an EU advisory panel on Wednesday in Brussels. “We can find the necessary compromises on the condition that the U.K. changes its approach and accepts a proper balance of rights, benefits, obligations and legally binding constraints.”
Under the terms of the U.K.’s withdrawal from the EU earlier this year, a transition period preserving the economic status quo runs until the end of 2020 and can be prolonged by as long as two years while both sides negotiate a free-trade deal.
A decision to prolong the transition phase would have to be taken before the end of this month. Barnier said the EU would like to extend the transition -- but Johnson has repeatedly ruled out doing that.
“Throughout the negotiations we have been clear that we will not extend the transition period and, if offered an extension from the EU, we won’t accept it,” a Downing Street spokesman said. “Brexit is about economic independence and we gain more by being able to design our own rules to suit the best interests of our businesses and people in future.”
“The problem is one of substance, not of method,” according to the EU memo obtained by Bloomberg. “The U.K. cannot refuse an extension and at the same time hold back progress on key aspects of our future relationship.”
Failure to seal an accord by Dec. 31 without a longer transition would mean the return of tariffs and quotas for EU-U.K. commerce. Those trade barriers would be in addition to extra red tape for businesses that will emerge in any case because Britain will be leaving the European single market.
Michael Clauss, Germany’s ambassador to the EU, signaled last week the push for a free-trade deal with the U.K. would rise to the top of the bloc’s agenda after the summer break.
“This Brexit issue is going to absorb most of the political attention we expect in September and October,” Clauss told a June 4 online event organized by the European Policy Centre.
©2020 Bloomberg L.P.
