High stakes as Boris Johnson heads to lunchtime showdown in Brussels

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Boris Johnson warned last year that a no-deal Brexit would represent “a failure of government policy for which we are all responsible.” On Wednesday, during a dinner in Brussels, this state art will be put to the ultimate test.

Mr Johnson’s dinner meeting with Ursula von der Leyen, President of the European Commission, is seen as a last chance to save trade talks and solidify UK post-Brexit relations with the EU. The political and economic stakes could hardly be higher.

Before the talks, the two sides surrounded the wagons. Downing Street said Mr Johnson’s cabinet was ‘united’ behind the Prime Minister and his threat, if necessary, to take Britain out of its post-Brexit transition period without a trade deal on January 1.

Meanwhile, Germany, a major exporter of goods to the UK, has demonstrated unity with France, whose President Emmanuel Macron is resuming his familiar role as Brexit tough man.

Detlef Seif, chief Brexit spokesperson for Angela Merkel’s CDU party, said: “It is certainly true that France is more affected by the fisheries issue than Germany, so obviously they have a point. different view.

“But the idea that there are differences between Merkel and Macron on this matter is only the figment of the British imagination.”

The German and French leaders have agreed not to speak individually to Mr Johnson – an idea discussed in Downing Street – but to leave the game to EU chief negotiator Michel Barnier and Ms von der Leyen .

Britain’s attempts to dig a wedge into EU27 unity have been a constant but unsuccessful feature of the Brexit saga.

Katja Leikert, CDU chief spokesperson on Europe, said: “We have to show the UK the red card every time it tries to bilateralize the talks.” A senior French official said: “There is a negotiating team. Complete stop. ”

Mr Johnson met with David Frost, his chief negotiator, in London on Tuesday evening to see if a “landing zone” for a deal could be identified – if both sides were ready to move.

Mr Frost spent Tuesday morning with Mr Barnier identifying outstanding points of disagreement before finally raising them to the political level with Mr Johnson and Ms von der Leyen on Wednesday.

British officials have insisted the talks in Brussels over dinner will be a “real negotiation”, while EU diplomats have said they intend to unblock the talks with details to be later developed by M. Barnier and Lord Frost.

Downing Street insisted detailed negotiations could not last until 2021, although EU officials argued substance rather than timing was key.

Although the issue of fisheries remains unresolved, both parties agree that an agreement on access and quotas is possible. It is the issue of fair competition “a level playing field” – and its enforcement – that remains the biggest problem.

Brussels wants to be sure that it can respond to any significant ambition gap between EU and UK environmental or labor standards by reducing market access for UK products.

He proposed an “evolutionary mechanism” under which the two sides would consult if a side feared that its companies would be at a competitive disadvantage.

What would a no-deal mean?

  • Tariffs on UK exports to the EU of up to 40 percent. Agriculture and fisheries would be particularly affected: (EU tariffs on UK scallops would be 20 percent for example, and 15 percent on sausages).

  • Interruption of cooperation in the fight against terrorism and organized crime because existing arrangements for the exchange of information would lapse.

  • The EU would lose its fishing rights in UK waters, with future access contingent on annual negotiations with the UK under the UN Convention on the Law of the Sea.

  • Trade would be hit by the force of the new customs and veterinary controls at the border and at the company’s premises.

  • Frontier workers would face increased bureaucracy to ensure access to benefits and pension rights.

  • Disruption of trade in civil nuclear materials and the cross-border energy market.

  • Lost opportunities for British scientific researchers to work with their European counterparts.

If it is determined that there is a real problem but talks fail, the disadvantaged party could impose tariffs or other measures to restore the playing field.

The UK insists that, while it is prepared to agree not to weaken existing regulatory standards – a principle known as non-regression – the EU’s plans go far beyond.

“What the EU has proposed is not non-regression but de facto alignment,” a British official said.

Added to this are the EU’s demands – which the UK has also resisted – that either side can punish the other if it breaks its commitments. In such a system, the EU could hit imports from one sector to counterbalance the non-compliance with UK rules affecting another.

The UK considers the idea of ​​cross-retaliation to be disproportionate, arguing that it would lead to an unstable and unpredictable trading relationship.

The two sides also disagree over Brussels’ attempts to exclude spending at the EU level from common state aid commitments. EU negotiators argue that within the Union, funds at EU level, such as its regional aid funds, are exempt from state aid restrictions.

The issue of a level playing field goes to the heart of Mr Johnson’s dilemma – the one he used to pretend Britain would never have to face – that full sovereignty over British rules means a less access to the EU single market.

The economic risks of not reaching a compromise were laid bare last month by the Independent Office for Fiscal Responsibility, which estimated there would be a 2% impact on the UK economy next year if no free trade deal was signed, amounting to £ 40 billion, in addition to previous losses linked to Brexit and coronaviruses.

Businesses have become increasingly alarmed as the days go by without a deal, sparking panic among businesses still lacking the details to plan for border checks between the UK and the EU.

UK Chambers of Commerce said companies still did not have enough official information available in 24 critical areas, hampering their ability to prepare for January 1.

James Sibley, head of international affairs for the Federation of Small Businesses, said it was “deeply concerning that, more than four years after the referendum, small businesses still have so little clarity on what our business relationship will look like. with the EU when the transition period ends in 25 days ”.

Reporting Team: George Parker, Daniel Thomas and Chris Giles in London; Jim Brunsden and Sam Fleming in Brussels; Guy Chazan in Berlin and Victor Mallet in Paris

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