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October 30, 2020

Europe

UK/EU: Some form of deadline every week, until mid-November

BY Carsten Nickel

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After another week of future relationship talks in London and Brussels, 3 November emerges as the next iteration in the negotiations between the EU and the UK. By then, the question will be whether both sides have made enough progress in the talks so far to perhaps involve PM Boris Johnson and Commission President Ursula von der Leyen in a final attempt to clear the last hurdles, most importantly on fisheries and the issue of the level playing field/state aid. Given the importance of these issues for EU member states, this might also be the moment for French President Emmanuel Macron and German Chancellor Angela Merkel to get more involved personally.

The progress made this week on state aid and its enforcement appears to be encouraging. Most importantly, both sides are finally working on legal texts now, as the EU has given up its insistence that the UK move further in the bloc’s direction first. Most commentators now also seem to have shifted from warning of the consequences of no-deal to cautioning that the talks could still fail at this stage, despite the progress made lately.

If talks intensify further after 3 November, the next signpost looms a week later, on 9 November when the UK internal market bill will be debated in the House of Lords. Following likely opposition, however, the key question remains whether the Commons will use their power to override the Lords’ concerns. Avoiding this would mean a difficult climb-down for Johnson, but he might be able to justify such a step by pointing to the outcome of the talks so far and to EU concessions. First, the EU would drop its own legal proceedings against the UK. Much more importantly, second, any greater clarity at that stage on a zero tariffs/quotas deal would increase the chance of an outcome that drastically reduces the paperwork required for exports from Northern Ireland (effectively inside the EU single market and customs union) to Great Britain. This, in turn, would decrease the need for some of the thorny provisions around that customs declaration question in the internal market bill.

In principle, the bill’s passages on state aid could be resolved in a similar manner, via greater clarity on the broad outlines and minimal standards of the UK’s future regime in this area. This leaves the question of upfront coordination, i.e., the role of a joint mechanism between the UK and the EU in which potentially conflictive decisions on state aid are scanned, discussed and sanctioned before they get turned into law – with the resulting rules monitored by supervisory authorities. This might be somewhat more difficult to align with the UK desire, expressed in the internal market bill, to reserve the last word over UK state aid decisions with members of the UK government. However, a mixture of elements of joint consultation, monitoring, enforcement and national decision-making power should not be ruled out; it would amount to an institutional fudge reminiscent of the solutions the EU has found internally in many contested policy areas.

If the talks yield enough progress and the issues around the internal market bill can be resolved, the 16 November informal European Council in Berlin would offer an opportunity to the bloc’s leaders to endorse the final text, clearing the way for sign-off in the European Parliament.

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