Statement on Round 2 of UK-EU negotiations

“This was a full and constructive negotiating round, conducted remotely by video conference, and with a full range of discussions across all the issues, on the basis of the extensive legal texts provided by both sides in recent weeks.

“However, limited progress was made in bridging the gaps between us and the EU.

“Our assessment is that there was some promising convergence in the core areas of a Free Trade Agreement, for example on goods and services trade, and related issues such as energy, transport, and civil nuclear cooperation.

“We regret however that the detail of the EU’s offer on goods trade falls well short of recent precedent in FTAs it has agreed with other sovereign countries.

“This considerably reduces the practical value of the zero tariff zero quota aspiration we both share.

“There are also significant differences of principle in other areas. For example we will not make progress on the so called "level playing field" and the governance provisions until the EU drops its insistence on imposing conditions on the UK which are not found in the EU’s other trade agreements and which do not take account of the fact that we have left the EU as an independent state.

“On fisheries, the EU's mandate appears to require us to accept a continuance of the current quotas agreed under the Common Fisheries Policy. We will only be able to make progress here on the basis of the reality that the UK will have the right to control access to its waters at the end of this year.

“We now need to move forward in a constructive fashion. The UK remains committed to a deal with a Free Trade Agreement at its core. We look forward to negotiating constructively in the next Round beginning on 11 May and to finding a balanced overall solution which reflects the political realities on both sides.”

Strictly background- not for quoting

General

There has been a constructive discussion between the two sides over the course of the week. The UK team has set out its proposals to the EU in a range of areas, making clear that we want a Canada-style relationship, based on a comprehensive Free Trade Agreement, supplemented by other separate international agreements.

Through the use of video conferencing technology and flexibility from both sides, we were able to successfully conduct a full negotiating round with technical discussions across all 11 negotiating groups and plenary and political stocktake sessions. Over 100 UK negotiators supported the negotiations, taking part it almost 40 different videoconferences.

Our vision remains that a relationship between sovereign equals, based on free trade and friendly cooperation. This is the vision that was voted for by the British people in the 2019 General Election. It is a vision that is fully compatible with the political declaration and is based on the principles of precedent and reciprocity.

By the end of the year, we will be a fully independent and sovereign country: this means that there will be no alignment with EU law and no jurisdiction of the ECJ. This will happen regardless of what takes place in the negotiations - the question is whether we can agree a Canada-style relationship with the EU by the end of the year, or whether we will trade with the EU on Australia-style terms.

The UK has made clear, including at this negotiating Round, that the transition period will end on 31 December 2020 and that we will not agree to an extension under any circumstances.

State of negotiations

On goods, whilst there is convergence on a range of core provisions related to market access, trade remedies, customs, technical barriers to trade and SPS, even in some of these areas the EU offer falls well below recent precedent and what would be expected of a normal FTA. For example, the EU continues to assert that UK proposals to remove unnecessary technical barriers to trade (e.g. double testing of compliance with international rules) and reduced SPS checks where we have equivalent standards are unacceptable, despite the fact that these measures are supported by businesses in the UK and EU; are commonplace in recent EU agreements; and are economically in the interest of the EU too.

Similarly, the EU has not yet been ready to engage in meaningful discussion on product-specific rules of origin or modern cumulation provisions, which are vital to give practical effect to our zero-tariff, zero-quota aspirations and avoid unnecessary disruption to our shared FTA partners and the poorest developing countries.

On the so-called “LPF”, the EU’s position goes far beyond precedent. No other FTA requires one side to be subject to the rules of another. We have used the negotiations to challenge EU arguments, such as those on geographic proximity, that attempt to justify their demands for extensive obligations in the UK agreement that go further than those in other FTAs. We have made also it clear that EU concerns about UK standards are misplaced and not supported by the evidence. We have a strong track record of high labour and environmental standards.

On Services, there were three full days of constructive exchanges on our respective legal texts. There is a high degree of convergence in a number of key areas, including cross-border trade in services and mode 4. However, there remains disagreement on some key issues, including aspects of financial services and professional qualifications.

On Transport, in aviation and aviation safety there was agreement on areas where it should be possible to make real progress. The scope and operational requirements of an agreement on road haulage and road transport was also discussed.

On fisheries, there has been no substantive progress because of differences over fundamental principles. The UK’s position is reasonable and straightforward. We want a simple, separate fisheries framework agreement which reflects our rights under international law and which provides for annual negotiations over access and sharing opportunities based on the scientific principle of zonal attachment. This is squarely in line with the existing precedent of the EU’s current fisheries agreement with Norway. Conversely, the EU want to tie a fisheries agreement to the wider FTA, wants to maintain the current access provisions it enjoys and rejects zonal attachment as a principle to base future sharing arrangements on. Until the EU is willing to accept reality and to have a science-based discussion about the future, it will be difficult to move forward. We will consider whether a UK legal text could now help us get to the kind of discussion we need here.

On Energy, including civil nuclear, there was encouraging progress on much of the detail with discussions about transfers of technology and arrangements to cooperate on civil nuclear issues. Each side responded constructively to questions and provided a great deal of clarification on their proposals. The UK is simply seeking a Nuclear Cooperation Agreement along precedented lines, which the EU agreed to in the Political Declaration.

On Criminal Justice and Law Enforcement, the EU’s offer is based on existing third country precedents, but coming with unprecedented obligations, including a direct role for the ECJ in dispute settlement – which is unacceptable to the UK. We are offering strong and pragmatic operational cooperation based on third country precedents with some additional and specific practical arrangements, where doing so is of mutual benefit, for example timelines for criminal records exchange or support for Europol. However, the EU has again said it is legally impossible for a non-Schengen third country to be part of, or exchange SIS2 data - this will reduce our collective capacity to exchange real time alerts on missing and wanted persons including criminals, terrorists and sex offenders. The EU also insists that criminal justice cooperation requires a UK commitment never to change our internal legislation implementing the ECHR. Clearly that is also not acceptable.

On governance, the UK’s position is clear, unambiguous and based on appropriate, relevant precedents. The level of cooperation proposed in no way justifies the scale and scope of the governance provisions. In particular, we will not agree to the EU’s proposals which require the UK to accept EU law either in terms of concepts or specific provisions, or give the European Court of Justice a role in deciding disputes between us.